oxiana & mnr prominent hill

Article in todays "The Age" newspaper

http://www.theage.com.au/news/Business/Oxi...9781322100.html

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.