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ways for zinifex to attain its dream

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    Article from the West Australian. Look at the last line, and think where they might be able to achieve this.

    Higher bid sees Zinifex win campaign for Allegiance

    26th February 2008, 9:00 WST

    Zinifex has partly plugged the production hole that will come with the 2016 end to its mainstay Century zinc mine in Queensland by securing the endorsement of Allegiance Mining for an increased $887 million takeover bid for the emerging Tasmanian nickel miner.

    Cashed up after last year�s sale of its smelting assets, Zinifex now plans to complete plugging the hole by more merger and acquisition activity, a $500 million-plus development (2006 estimate) of the Dugald River base metals deposit in Queensland, a modernisation of its Rosebery mine in Tasmania and a possible development of its recently acquired Canadian base metals projects.

    Zinifex won over the Allegiance board by lifting its bid from $1 to $1.10 a share. Completion of the offer � the attitude of 10.4 per cent shareholder Jinchuan of China is not yet known � will give Zinifex annual nickel production from the new Avebury mine of 8500 tonnes.

    Avebury now has to prove itself as a low-cost producer of nickel at the planned production rate before Zinifex can claim the $887 million acquisition as a success. Zinifex will also be hoping that nickel holds at current levels of more than $US12 a pound after touching $US25/lb last year.

    The Allegiance bid endorsement coincided with Zinifex�s record profit of $1.3 billion for the December half � a result that included a $960.6 million contribution from the sale of the group�s smelter assets to Belgian-based and newly created Nyrstar.

    The contribution from Zinifex�s businesses � the Century and Rosebery mines � fell 43 per cent to $281.1 million. They felt the sting of lower metal prices and the revenue-sapping effects of the stronger dollar in the half year. Cost increases, most noticeably in freight charges, were also a factor.

    Interim dividend has been cut from 70� to 35� a share (fully franked). It is payable on April 21 after a record date of April 7. The ex-dividend date is April 1. Zinifex shares closed 35� higher at $10.50.

    Zinifex�s new managing director, Andrew Michelmore, said that the group was in an �enviable position with more than $2 billion in the bank�.

    Mr Michelmore said Zinifex was a small copper producer but would like copper to end up being about 30 per cent of the portfolio.
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