OXR oxiana limited

oxiana & mnr prominent hill

  1. 679 Posts.
    Article in todays "The Age" newspaper


    Oxiana to get more Prominent with Minotaur deal
    By Barry FitzGerald
    Resources Editor
    November 9, 2004

    Owen Hegarty's fast-moving Oxiana Resources is to move to full ownership of the big Prominent Hill copper/gold discovery in South Australia's arid north in a deal to be confirmed today.

    Oxiana is expected to announce it will acquire the 35 per cent of the project held by Derek Carter's Minotaur Resources in a friendly deal worth $60-$80 million and one possibly satisfied by a distribution of Oxiana shares to Minotaur shareholders.

    Prominent Hill is the subject of a joint-venture agreement under which Oxiana is earning a 65 per cent interest by fully funding $34 million on resource definition and mine feasibility.

    The $60-$80 million valuation range does not include any adjustment for Oxiana's remaining earn-in obligations.

    Both Oxiana and Minotaur were placed in a trading halt yesterday. Oxiana's last sale price was $1.02 a share for a market value of $1.2 billion. Minotaur last traded at $1.79 ($86 million).

    Whispers about a pending deal between the two first surfaced at a recent mining conference in Brisbane. The whispers pushed Minotaur's share price up from the $1.50 levels before the conference.

    Minotaur is the Adelaide-based group that made the original Prominent Hill discovery in 2001. The discovery is in gibber country 650 kilometres north-west of Adelaide, halfway between WMC Resources' Olympic Dam copper/gold/uranium operation and the opal town of Coober Pedy.

    While there was some speculation yesterday that Oxiana would take over its junior partner, the more likely outcome is a deal on Minotaur's Prominent Hill stake alone.

    Mr Carter is an avowed explorationist, believing that most value in mineral deposits is made with their discovery. A sale of the Prominent Hill stake to Oxiana would allow Minotaur to return to the hunt.

    Prominent Hill itself has proved to have been a big discovery. An initial resource estimate in August ranked it as containing 1.5 million tonnes of copper and 1.6 million ounces of gold.

    Early planning is under way for a $300-$350 million development producing about 90,000 tonnes of copper a year.

    Life after Prominent Hill for Minotaur would still be full of action. Apart from a complete portfolio of new exploration opportunities, the group is well cashed up with $8.7 million.

    Minotaur also holds 42 per cent of geothermal energy explorer Petratherm and 19.7 per cent of nickel explorer Mithril Resources.

    The reporter owns Oxiana shares.
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