OXR oxiana limited

RIO may takeover OXR

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    A positive AFR article suggesting RIO Tinto is starting to get excited about the numbers coming out of sepon, and why wouldnt you...........a multi million tonne copper resource, 3.5 million ounces gold, 27 million ounces silver, and explosive exploration potential.The share price in now way reflects the underlying value. Discounted it is, because of the percieved political risk, when in fact the govt and the local community support the project entirely. Its a very good buying chance to participate in an exciting world class project that will be around for years. I think if RIO launched a takeover bid, they would need to pitch it at around 80 cents i would think. Peanuts for a company that size. Anyhow for shareholders, its nice to know the worlds biggest miner thinks they are on a good thing with sepon! Here's the article:

    Oxiana's Laos figures put Rio back in the picture
    Aug 17
    Bruce Hextall

    Oxiana Resources could be heading for interesting times with its Sepon gold and copper project in south-east Laos.

    The company, under Plan A, is completing financing arrangements for a $US30 million ($55 million) debt package provided by the World Bank's International Finance Corp.

    This will fund the development of the project's gold component, with a resource base of 3.5 million ounces plus 1 million ounces in the reserves category.

    Plant commissioning is expected by the end of the year, leading to annual production of 125,000 ounces at a cash cost of about $US150 an ounce.

    Oxiana managing director Owen Hegarty says more ounces are being added to the resources base daily.

    The copper numbers are also getting larger, helped by the discovery of a high-grade deposit in the Thengkhan prospect, 7km west of the Khanong deposit on which the copper component of the project is based.

    Talk has it that the extra gloss on Sepon has revived Rio Tinto's interest in the project. Rio owned the project before selling 80 per cent to Oxiana, with provisions to buy it back should Sepon prove to be world class.

    That may be some way off but Rio is believed to be considering supporting a funding alternative to IFC's package which includes an equity component giving IFC about 8 per cent.



    Rather than being diluted, Rio is considering keeping its 20 per cent, with some suggesting it might even attempt to move to a controlling interest by taking over Oxiana. It would be cheaper than winning the project back through its clawback provisions.

    Hegarty isn't saying much, other than enthusiastically suggesting that Sepon has the hallmarks of being in a substantial mineral field.

    While Laos might be perceived as carrying some political risk, the Government there is fully behind Sepon's development.

    Investors also seem to be supporting the stock - good news for holders of 23 million options exercisable at 25¢ by September 30.

    With Oxiana's share price at 30¢, there's good reason for options to be exercised. If fully taken up, Oxiana would see its coffers topped up with more than $60 million, giving it another funding option.


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Currently unlisted public company.

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