Ozl oz minerals

[trader10]

I've bought in this morning at 42c....

I'm pretty confident on Friday's resolution on their finance.....bring it on ! ;)

[Dr_Who]

I bought more this morning also at 45 cents. :)

Hard to see it failing. The alternative is receivership. The banks and govt will not want to see OZL going belly up unless the govt comes out with a bailout package.

Also the govt have ok the other Chinese investments which sets a precedent for OZL T/O... Midwest and Mt Gibson.

[trader10]

Hi Doc,


Debt-laden OZ Minerals Ltd is still in "very positive" talks with its lenders, the miner says, after its shares dived on concerns that its bankers may go ahead and demand repayment of a loan this week, despite an agreed takeover bid.

"We're in very good, productive talks with the banks, with a view to getting the extension we need by Friday," Oz Minerals' executive general manager, Bruce Loveday, told Reuters.

"The discussions are very positive," he said.

The world's second-largest zinc miner, due to repay at least $140 million in loans by Friday, agreed this month to a $1.7 billion takeover from Chinese state-owned metals trader Minmetals, but the deal still needs Australian approvals.

Oz Minerals shares were down 14.52 per cent at 50 cents at 1156 AEDT, well below Minmetals' 82.5 cents offer.

Treasurer Wayne Swan, who has a veto over foreign investment in local firms, said no determination had been made yet on the Minmetals-Oz Minerals deal.

Earlier on Wednesday, Bass Metals Ltd said its exploration partnerships with OZ Minerals had been terminated and OZ Minerals would lose any rights to the joint ventures.

"The termination of the alliance and joint ventures, which covered prospective targets in the Hellyer region, was by mutual agreement but initiated by OZL due to exploration budget constraints," Bass Metals said in a statement.

cheers

T10

[dragonz]

I bought more this morning also at 45 cents. :)

Hard to see it failing. The alternative is receivership. The banks and govt will not want to see OZL going belly up unless the govt comes out with a bailout package.

Also the govt have ok the other Chinese investments which sets a precedent for OZL T/O... Midwest and Mt Gibson.

Agree with your sentiments Dr Who however I sold down my OZL holding and brought into AAX.

If the OZL sale does go through then this will have the same % impact rise on AAX however if sale doesnt at least I'm still left with my shares in a solid company. Hope it all works out for OZL holders

[Dr_Who]

Dragon, tell me more about AAX and its relationship with OZL.

[macduffy]

I bought more this morning also at 45 cents. :)

Hard to see it failing. The alternative is receivership. The banks and govt will not want to see OZL going belly up unless the govt comes out with a bailout package.

Also the govt have ok the other Chinese investments which sets a precedent for OZL T/O... Midwest and Mt Gibson.

The big risk is that the banks refuse funding; the company goes into administration/receivership; the assets are sold to the Chinese anyway ( but without them taking on the debt ); the workers keep their jobs, by and large, but the shareholders miss out.

Disc: Yes, I hold a few!

:(

[Dr_Who]

I read that one of the main reasons the sp got hammered was that a few leveraged houses have removed OZL from the margin lenders list.

I am certain the bankers will want a favourable outcome without any public backlash. If there can be a deal with the bankers, I think the Chinese would have gone to them first and not even need to negotiate with OZL.

Anyway, you do have a point McDuffy. Here's hoping a positive outcome for shareholders come Friday.


http://www.thewest.com.au/default.aspx?MenuID=33&ContentID=126697

I am holding on for the ride. Bring it on.

[dragonz]

Dragon, tell me more about AAX and its relationship with OZL.

Dr. AAX had a great annual result but lost 30% value spp in the last 2 days because 1.5 billion of lost future contracts. One of them being OZL


Ausenco hopeful of mining recoveryJamie Freed
February 24, 2009 - 7:11PM
Engineering group Ausenco has had 30% of its mining work deferred or cancelled as a result of lower metals prices, but it is hopeful of regaining some of the contracts soon.

The company reported a record net profit of $56.3 million, up from $41.5 million the previous year, and declared a 13.5 cents fully-franked dividend, but its shares plunged 45 cents to $2.08 on worries about its outlook given it had traded strongly ahead of the results.

''There are tough operating conditions, but we are still of the view that Ausenco is better positioned than most to ride it out,'' said an ABN Amro Morgans analyst, Roger Leaning.

Ausenco's chief executive, Zimi Meka, said its minerals contracting book had reduced to $US3.5 billion from $US5 billion by the end of the year as companies like OZ Minerals and Rio Tinto deferred or cancelled projects.

Ausenco is hopeful of regaining the contracts on OZ's Martabe operation set to be sold and its Sepon expansion, which could be resumed by China's Minmetals, the company seeking to take over OZ Minerals. Ausenco already has a contract with Minmetals on a copper project in Peru.

Vale recently bought the Corumba iron ore project previously owned by Rio and may decide to resume the expansion in light of the high-quality lump ore at the site.

Ausenco also has contracts with Newmont Mining, Barrick Gold and Newcrest Mining in the gold sector, which is outperforming other minerals.

Its minerals division overshadows its smaller infrastructure, environmental, energy and oil and gas divisions, but Mr Meka said his company was looking to reduce its dependence on mining, possibly through acquisitions.

Meanwhile, mining plant builder Sedgman reported a $7.1 million statutory half-year loss after writedowns on its Intermet business but its earnings before interest, taxes, depreciation and amortisation were $21 million. It declared a fully-franked interim of 3 cents per share.

It said it was well positioned to secure new coal contracts on major projects in Australia and overseas.

SMH

[Dr_Who]

Ok, had another look into OZL tonight.

On a worst case scenario, if the banks wont roll over the debt and goes into receivership, thus sells all the OZL asset to the Chinese for $2.6 billion and pay off debt there will still be $1.4 billion left for shareholders.

$2.6b - $1.2b (bank debt) = $1.4 billion shareholders

$1.4 billion = 45 cents per share

This is the worst case scenario if OZL do go into receivership, shareholders should receive around 45 cents. I cant see it happening when the best outcome is for the bank and govt to have the Chinese buy it out.

Buying at 50 cents is worth a punt when your downside risks is 5 cents with upside potential of 32.5 cents.

Mcduffy and others, your thoughts?

[Huang Chung]

Sold out this week after holding them through their 3 month suspension.

You Kiwis should google 'Inside Business' and watch the interview Alan Kohler did with Michelmore for last weeks show.

[Dr_Who]

Go ozzie ozzie go! :)

[trader10]

Sold out at 0.55c.... happy with the profit... ;))


I am almost certain the banks will back this one up as it's a massive miner....but I will not risk my money on gambling on luck....

Good luck to all... cheers :wink:

[shasta]

Sold out at 0.55c.... happy with the profit... ;))


I am almost certain the banks will back this one up as it's a massive miner....but I will not risk my money on gambling on luck....

Good luck to all... cheers :wink:

I'm kinda surprised BHP didnt snap them up for the PH project :rolleyes:

Or at least try & buy there best mines

[macduffy]

I'm kinda surprised BHP didnt snap them up for the PH project :rolleyes:

Or at least try & buy there best mines

They may yet if the Chinalco deal falls through. And the price will accordingly be lower.
It doesn't please me to contemplate this as I still hold a few.

:(

[shasta]

They may yet if the Chinalco deal falls through. And the price will accordingly be lower.
It doesn't please me to contemplate this as I still hold a few.

:(

It's times like these when i'm glad i got stopped out of OZL at $2.00 :rolleyes:

BHP will be looking at "distressed" companies with decent projects, i'm sure of it.

[macduffy]

Mcduffy, if you are so convinced that the deal wont go through why dont you sell your shares? I am more positive than you on this one and think there is a very good chance it will go through.

I'm not convinced about anything, doc!

I just think there is a fair chance the deal will fall over for one reason or another and if it does then the pieces will be picked up for a sum total smaller than the Chinese deal. By the way, it's Minmetals that's involved, not Chinalco who are after the RIO assets/shareholding. My mistake.:rolleyes:
If I had a bigger holding I might play it safe and sell but as it is.............

[Huang Chung]

My broker hooked into Michelmore's conference call yesterday arvo. Overall, he said Michelmore was relatively upbeat. Broker is quietly confident refinancing will get done (but probably only for a month before they have to go through the process again).

Problem with refinancing seems to be as a result of bickering in the syndicate. There would nearly be agreeance, and then one bank inevitably would want to pull out, which lead to a round of 'well, if they pull out, we pull pull out' garbage. Then the lead banker would get them all pretty much back in line and then it would start all over again. Problems are mainly with the foreign banks, because of the need to repatriate funs back to head office.

Good luck to holders.

[Dr_Who]

Oh well, if it does fall then we are all in the same sinking boat.

Hope you are wearing a lifejacket. :p

[macduffy]

So far so good!

Today's credit deadline has been extended to 31 March. ( Good info, HC!)

Still some life in the old OX!

:)

[Dr_Who]

I dont want to be a 5 yr old, but.....

.... I TOLD YOU SO! :p

[macduffy]

I dont want to be a 5 yr old, but.....

.... I TOLD YOU SO! :p

Well done, doc!

Now, are you taking your profit or hanging in for Minmetals' big offer?

;)

[Dr_Who]

Already took half profit and holding the other half.

I fear the Aussie govt approval is a 50/50 chance. The aussie public might have foreign phobia with "Aliens" coming in buying up the local assets. Also June is a long way away and anything can happen between then and now.

[Huang Chung]

Personally, I think the refi was the biggest hurdle. I don't think FIRB and Treasurer approval will be too much of an issue, but you never know I guess.

One line of thought is that they will approve the Oz deal (essentially tier 2 assets, with the possible exception of PH) but knock back/restrict the Rio/Chinalco deal (largely tier 1 assets).

Have to let something though so that we don't look completely xenophobic to the Chinese.....;)

[beacon]

Ditto 2 that...

[trader10]

OZ posts $2.5B loss, gets debt extension
--------------------------------------------------------------------------------
Friday, 27 February 2009

OZ MINERALS has reported a $A2.5 billion full-year net loss after tax, while China Minmetals’ $2.6 billion bid for the embattled diversified miner moved a step closer after OZ was given an extension to its loan facilities.

The Melbourne-based miner said its financiers had approved an interim extension of the financing date for its loan facilities from today’s deadline until March 31, subject to documentation.

OZ managing director and chief executive officer Andrew Michelmore said during a teleconference this morning that today’s extension was important as it was one of the remaining preconditions to the scheme implementation agreement the company had with Minmetals.

He also said the extension to the company’s debt facilities now allowed it to focus on obtaining regulatory approvals, including Australia’s Foreign Investment Review Board approval.

“[The extension now] enables us to proceed to securing regulatory approvals and satisfy the other conditions precedent to the scheme,” Michelmore said.

“We still have a lot of work to do and the obtaining of all necessary regulatory approvals is a key focus for us and is a very important next step for us in securing our future.

“We are also delighted to achieve this agreement ahead of the deadline which is a first for us in recent months.”

OZ will continue work with its financiers to secure their consent, by April 1, to extend the financing facilities until after implementation of the scheme of arrangement.

Earlier this month, Minmetals offered 82.5c per share for OZ under a scheme of arrangement and to take on OZ’s outstanding debt facilities and convertible bonds with the OZ board throwing its support behind the offer.

To meet its debt obligations, and hopefully refinance a lower amount of debt, OZ is also trying to sell off assets including the Martabe project and Golden Grove.

Michelmore said today that the asset sale negotiations were very close to being completed.

“I would have certainly thought one [of the asset sales] was within days and maybe the other [asset sale was] within a week," he said.

In its full-year financial results also released today, OZ reported a $2.5 billion full-year net loss after tax on the back of $2.3 billion in write-downs of its assets and decline in commodity prices.

“This result was impacted by falls in prices across our major commodities, significant impairment of assets and other asset write downs, a number of one-off costs associated with the acquisition of Zinifex by Oxiana to form OZ Minerals and restructuring costs,” Michelmore said.

“The result does not reflect the sound operating performance of our operations which consistently met production forecasts.”

Full-year revenue was $1.2 billion, up from $1.1 billion in 2007, with the largest contributor to revenue being the Sepon copper operation, which contributed $504 million.

OZ’s Century operation contributed $267.5 million in revenue for the six months it was part of OZ, while Golden Grove’s revenue was significantly lower at $266.2 million for the year.

The Rosebery operation contributed $73 million revenue, while the Avebury operation contributed $12.9 million revenue before it was placed on care and maintenance.

Production cash costs were lower across all company operations, except for Rosebery, due to a decline in energy prices and margin improvement programs.

Cash on hand has risen from $118.8 million as at December 31 to $149.6 million as at February 26.

Following a review of capital and operating expenditure in November, OZ decided to defer $495 million of future capital expenditure with the suspension of development at Martabe, the Sepon copper expansion, capital works at Rosebery and the Golden Grove open pit.

Operating expenditure was reduced by $185 million across all operations.

OZ said capital expenditure in 2009 would be lower with a greater proportion of expenditure committed in the first half of the year, while major costs in 2009 include the continued pre-strip at Century and final development costs at Prominent Hill.

No further dividend was declared for the second half of 2008 due to the negative earnings results for the year.

Shares in OZ have gained 8c to 64c in morning trade.

http://www.miningnewspremium.net

[Dr_Who]

OUCH!

More, please: OZ asks for extra funding

OZ MINERALS is seeking additional funding from its banking syndicate beyond the $1.3 billion that has already been extended

http://business.smh.com.au/business/more-please-oz-asks-for-extra-funding-20090316-8zy0.html

[Dr_Who]

If OZL drops anymore I am going back in.

:eek::eek:

[Dr_Who]

Bought some OZL today at 54 cents. :)

Where are you McDuffy?

[macduffy]

Bought some OZL today at 54 cents. :)

Where are you McDuffy?

Hi doc.

I'm sitting back admiring your steely constitution!

For what it's worth I've added recently to my CPB position.


I should add that I'm not yet convinced that this represents the bear's bottom so caution still prevails.


;)

[Dr_Who]

Looks like OZL sp is gonna get hammer today.

Opportunity to buy more.

[Dr_Who]

OZL trading halt.

Waiting for govt approval. It is all or nothing!

[Huang Chung]

Actually, Doc, if I were a betting man, I'd say that the FIRB will throw up a road block in the form of wanting more time or something similar.....I don't think it will be a straight 'yes' or a straight 'no'. I base this on the FIRB wanting an extra 30 days to consider the proposed Chinese stake in Fortescue (around 17%).

I noticed that OZL mentioned the word 'status' rather than 'outcome' in today's release as well.

[shasta]

Actually, Doc, if I were a betting man, I'd say that the FIRB will throw up a road block in the form of wanting more time or something similar.....I don't think it will be a straight 'yes' or a straight 'no'. I base this on the FIRB wanting an extra 30 days to consider the proposed Chinese stake in Fortescue (around 17%).

I noticed that OZL mentioned the word 'status' rather than 'outcome' in today's release as well.

The Chinese are on the buy, thats for sure RIO, Fortescue, OZL, & others.

This could really open up the doors should the approval be given

[macduffy]

Yes, a decision now could set the scene for other deals which are pending.
The recent re-submission of the Ansteel/GBG deal has also been interpreted as giving the FIRB ( aka the Australian govt) more time to work out a comprehensive response to the issue of increasing foreign ownership of Australia's mining/resource companies.

I'm picking that this will be another deferral.

;)

[Huang Chung]

Boy, you need balls of steel to be riding OZL.....

[Xerof]

Price action was a 5 cent drop to 59 cents into the HALT.

If it's been delayed, the Board, if it's worth it's salt, would surely want to (try to) firm up the bank extension before releasing that sort of news to the market

[Huang Chung]

Well, pretty obviously, they have no agreement in place with the banking syndicate to extend beyond the end of this month, otherwise something would have been announced.

Ball now well and truely back in the banker's court, but now it seems pretty clear that they will have to agree to a 3 month extension rather than just one month.

Question is, when will the bank's patience be exhausted?

[Xerof]

they have no agreement in place with the banking syndicate to extend beyond the end of this month

Precisely, so they should be using the period of the trading halt to firm that up (or not), so they can announce tomorrow.

As you say HC, "status", not "outcome", which strongly suggests a delay by FIRB

As I say, any Board worth it's salt cannot simply announce that without also giving direction on status of the funding, hence they should be burning midnight oil to sort that out.

It would be suicide to announce a delay by FIRB without also providing status of the funding

I disagree that the banks will have to extend

[macduffy]

FIRB has extended for 90 days.


http://www.asx.com.au/asxpdf/20090323/pdf/31gqrbrpx0m7ls.pdf


;)

[Xerof]

suicide it is then......:cool::cool:

[macduffy]

Maybe not.

http://www.businessspectator.com.au/bs.nsf/Article/UPDATE-1-OZ-Minerals-lenders-seen-likely-to-extend-QF83Y?OpenDocument&src=tnb

;)

[Huang Chung]

Strange that the banks are all of a sudden feeling benevolent towards Oz. Until now, it's been touch and go whether the bank's would extend by one more month, let alone three. Sure, commodity prices are rising, but the European bank's in the syndicate must be under more pressure than ever to repatriate funds back home, and the Foreign Investment Review Board is making it very clear that they are not going to pull the 'approved' stamp out of the bottom draw quite as readily as we might have expected.

[macduffy]

Just a guess, but perhaps they're getting indications that the deal will be approved once all the other ducks are in a line politically - Rio, GBG/Ansteel, Fortescue etc.
It will be a lot cleaner for the banks to be paid out in a takeover of OZL, rather than have to go through the process of administration and piecemeal selling of assets.
As noted, the slightly firmer tone to commodities prices adds some confidence to this course of action.

[Xerof]

Could be the case Macduffy....tend to agree the Banks would probably rather gouge another 3mths of fees out of them and sit and wait as well....but as for being a shareholder, as HC said.... balls of steel required....its going to be either 82.5 or <30 on the FIRB announcement

discl - not holding and not for me thanks

[shasta]

Just a guess, but perhaps they're getting indications that the deal will be approved once all the other ducks are in a line politically - Rio, GBG/Ansteel, Fortescue etc.
It will be a lot cleaner for the banks to be paid out in a takeover of OZL, rather than have to go through the process of administration and piecemeal selling of assets.
As noted, the slightly firmer tone to commodities prices adds some confidence to this course of action.

This sounds promising

http://www.stocknessmonster.com/news-item?S=RIO&E=ASX&N=315765

[Dr_Who]

I am surprise OZL sp is so firm.

Maybe a positive announcement on financing is in the wing?

[Huang Chung]

I don't really think the price is being driven by people 'in the know'. Take late last week for example....price got driven a lot higher just a day before the 90 day extension of time by the FIRB was announced. There has been an article doing the rounds quoting an unnamed banker in the syndicate suggesting the bank's should approve the extension. Price seems to have jumped on the back of that.

[macduffy]

OZL in a trading halt........again.

Getting rather tiresome, isn't it?

:rolleyes:

[Xerof]

some speculation surrounding the Company wording in the announcement .... "the Company's position in relation to the takeover offer from Minmetals"


pulling out
another bid coming in (BHP suggested due to recent bond issue)
imminent asset sales which might see them through
none of the above
take your pick.....

[Dr_Who]

It is more likely an announcement that the banks will extend finance on a monthly basis with no extra credit. Thats my guess.

BHP will not be interest as it is only a tier two resource. There is a possibility the Chinese can pull out and said to themselves, too hard. Aust is not the only country with natural resources. The Aussies fail to realise this to their peril.

I sold all my OZL at 58 cents prior to the trading halt and the announcement of the govt decision to extend for 90 days. Got too nervous and bailed. Always knew it would not be a smooth process.

[winner69]

The Chinese can't buy Prominent Hill because it is too close to some weapons testing area area and its puts Australia security at risk .... yeah right

Without Prominent deal off I say ,,, what next?

[Balance]

Ouch!

20 cents on Monday?

[Huang Chung]

That the Treasurer would kill the current deal within a week of the FIRB saying they needed up to another 90 days...and just 4 days before the debt to the banking syndicate has to be repaid, or rolled over, is just incredulous.

Prominent Hill didn't move into the weapons range last week you know.....

Seems politically inept, especially if it forces Oz into administration, with its likely impact on jobs.

Why do I feel there might be a 'Plan B' waiting in the wings......

[Balance]

That the Treasurer would kill the current deal within a week of the FIRB saying they needed up to another 90 days...and just 4 days before the debt to the banking syndicate has to be repaid, or rolled over, is just incredulous.

Prominent Hill didn't move into the weapons range last week you know.....

Seems politically inept, especially if it forces Oz into administration, with its likely impact on jobs.

Why do I feel there might be a 'Plan B' waiting in the wings......

Plan 'B' is for BHP or RIO to pick up OZL assets really cheap when it goes into liquidation. Shareholders will get nothing.

This was always a risk with a politically sensitive takeover.

[Dr_Who]

Yep, it is all over for OZL.

I feel very bad for the shareholders. This decision is complete BS. What do you expect from a bloody Labour govt. It is now the responsibility of the Aust govt to come out with a bailout plan. The sole responsibility should be fully placed on the aussie govt's shoulders. A complete disgrace. :confused::mad:

The Australians are making the same mistakes now as they did when the Jap in the 80s. This will scare Chinese and other funds out of Aust, which the Aussie's badly need. The Chinese will now put their money in South America, Africa and other parts of the world.

[Dr_Who]

Hold on tight, there maybe life after death. Negotiations are still going on in the background to resuscitate OZL.

[Dr_Who]

Did a great trade on OZL today. Bought below 50 cents. Looks like OZL will live to see another day, thanks to the Chinese coming to the party in such short notice. :)

[macduffy]

Did a great trade on OZL today. Bought below 50 cents. Looks like OZL will live to see another day, thanks to the Chinese coming to the party in such short notice. :)

Sounds good, doc.

What did you sell them at?

;)

[Dr_Who]

Sounds good, doc.

What did you sell them at?

;)

55 cents. Just pure luck getting the top of the market for that day.

[macduffy]

55 cents. Just pure luck getting the top of the market for that day.

Yes, a nice trade!

:cool:

If all goes according to plan ( and still a big IF about that ) OZL will end up being the (almost) pure copper stock - with a bit of gold - that you were looking for!

;)

[macduffy]

Those with an interest in OZL will have noticed that the price of copper has retained its upward trend lately, particularly when expressed in AUD.

If all goes according to plan, the "new" OZL will end up an almost pure Cu play.

:cool:

[Dr_Who]

Those with an interest in OZL will have noticed that the price of copper has retained its upward trend lately, particularly when expressed in AUD.

If all goes according to plan, the "new" OZL will end up an almost pure Cu play.

:cool:


To be honest, I hope the OZL management team sell all the assets and distribute cash back to sh. I have no confidences in the current management. Either that or replace with new management team if they to retain Prominent Hill.

[macduffy]

:cool:Australian Treasurer has approved the Minmetals deal.

http://www.businessspectator.com.au/bs.nsf/Article/Swan-approves-revised-OZ-Minerals-Minmetal-deal-pd20090423-RDAB7?OpenDocument

:cool:

[shasta]

:cool:Australian Treasurer has approved the Minmetals deal.

http://www.businessspectator.com.au/bs.nsf/Article/Swan-approves-revised-OZ-Minerals-Minmetal-deal-pd20090423-RDAB7?OpenDocument

:cool:

That should open the doors up to the Chinese, like a boxing day sale :D

[moimoi]

agree with the good Dr...

the management team have been abysmal!!

avoid.

[macduffy]

Martabe project sold to a Chinese company for USD211m.

;)

[macduffy]

More on the Martabe sale.

http://www.theaustralian.news.com.au/business/story/0,28124,25381924-643,00.html

It looks like a good deal for OZL but of course reduces their exposure to any gold upside.

[Dr_Who]

Thank God for the Chinese or this company would be history.

I still would like to see them sell everything and return cash to sh or change top level management and keep existing asset.

[macduffy]

Thank God for the Chinese or this company would be history.

I still would like to see them sell everything and return cash to sh or change top level management and keep existing asset.

Well, the rumour mill in Aust says that Michelmore will go to Minmetals with the sale to that company. So it looks like you'll get your wish, doc!

;)

[macduffy]

OZL having a nice little run today.

Looks like confidence is gradually building that the Minmetals deal will go through and that Prominent Hill will ensure some sort of future for the OZL rump.

;)

[macduffy]

OK, I was a bit premature there!

:o

Lost most of the day's gain, now only up a half cent.

[macduffy]

BHP says it's not interested in Prominent Hill.

http://www.theaustralian.news.com.au/business/story/0,28124,25429314-643,00.html

.......but then they would, wouldn't they?

;)

[macduffy]

OZL chief Michelmore to go to Minmetals as part of the package deal.
No surprise there!

http://business.smh.com.au/business/oz-minerals-chief-defects-to-suitor-20090505-at56.html

[Dr_Who]

OZL chief Michelmore to go to Minmetals as part of the package deal.
No surprise there!

http://business.smh.com.au/business/oz-minerals-chief-defects-to-suitor-20090505-at56.html

This tells me that OZL will sell all their assets and distribute cash back to sh.

[macduffy]

This tells me that OZL will sell all their assets and distribute cash back to sh.

Why do you say that, doc?

OZL is still a substantial company after the Minmetals deal. It's current market cap is in excess of $2.5b, keeping it firmly in the middle rank of miners after the majors such as BHP,RIO,Newcrest,Lihir etc. True, it will really only have Prominent Hill plus cash and a handful of prospects but PH is a significant asset, despite what BHP may think of it, with a lot of potential for expansion at the right time.

Michelmore was always going to go with the sale to Minmetals and clearly the slimmed down company doesn't need the full-sized board that resulted from the OXR/Zinifex merger, nor the present management numbers.
A lot of the current board are "tainted" by recent history and are best dispensed with, as I'm sure they realise.

After a period of reorganisation I don't see any reason why OZL shouldn't have a future as a substantial (mainly) copper miner. The market seems to think so in valuing the shares at 80-82c.

But I'd be interested in other views.

:)

[Huang Chung]

Eureka report is saying that Oz has now run a bit too far to offer value. Not saying their right, but you might take the view that the majority of the near term gains have already been made.

[macduffy]

Here's an article rather supportive of Andrew Michelmore and the OZL board.
I'm inclined to agree.

http://www.businessspectator.com.au/bs.nsf/Article/Saving-face-at-Oz-pd20090505-RR4RV?OpenDocument&src=kgb

[macduffy]

Well, it didn't seem likely a couple of months ago when the SP hit 45c but OZL has now doubled, trading at 90c.
All to do with the price of copper of course, and a rather better outlook generally.
You still in there doc?

;)

[Dr_Who]

Yeah, I only got a few shares left. Sold about 80% of my holding. What an incredible bounce. I am happy with my profit and left abit for others. :)

[Dr_Who]

Hey Mcduffy, you must be pls you held onto OZL. Minmetal have increase their offer. :)

[macduffy]

Hey Mcduffy, you must be pls you held onto OZL. Minmetal have increase their offer. :)

Yes, now we need to wait for the vote this arvo and hope that it's a "Yes". As suspected, the Macquarie "proposal" was all hot air and opportunism.
Hate to think of the outcome of an administration which is the most likely result of a "No" vote.

:cool:

[trader10]

After today's news.... OZL MINERALS DEBT FREE, I think it's time that many managed funds and investors will start buying OZL.... trend is up from here IMHO.....base and precious metals prices are another story all together....we are talking a aussie company story that went totally wrong to a recovery......

OZ Minerals retires debt after completing sale to Minmetals

June 17 2009, 7:10PM
OZ Minerals Ltd has wiped out its crippling $1 billion plus debt after settling its major asset sale to China Minmetals Non-Ferrous Metals Co Ltd (Minmetals).

The miner now has a substantial kitty of more than $700 million, soon to be bolstered to $1 billion, to help restart exploration projects.

OZ Minerals was once Australia's third largest diversified miner but the sale of most of its assets to Minmetals leaves it a sole-asset company, focused on the Prominent Hill gold and copper mine in South Australia.
The company confirmed on Wednesday the divestment of the assets to Minmetals had raised $US1.354 billion ($A1.69 billion) after settlement adjustments.

OZ Minerals had been teetering on the brink of administration since it ran into trouble refinancing about $1.2 billion in debt facilities late last year.

But its financiers extended the expiry date of debt facilities several times to allow the Minmetals deal to proceed.

OZ Minerals chairman Barry Cusack said the completion of the deal meant all the company's bank loan facilities had been repaid.

The miner was left with a cash balance of more than $US575 million ($A727 million).

This is expected to be bolstered by a further $US211 million ($A264.8 million) from the cash sale of its Martabe gold project in Indonesia to another Chinese party, China Sci-Tech Holdings Ltd, pending the approval of that company's shareholders.

"We have now retired all of our bank loan facilities, which has been a critical issue for the company for more than six months," Mr Cusack said.

"OZ Minerals is now smaller and more focused in terms of its operations but is in a significantly enhanced financial position.

"We have ... a rejuvenated balance sheet with a substantial cash balance and we are now also beginning to accrue revenue from the Prominent Hill mine."

The miner says it will now focus on restarting exploration projects and development studies that were suspended last year.

The company says it has $US105 million ($A131.8 million) of convertible bonds and fully secured bank letters of credit of about $A20 million principally to meet its mining regulatory obligations.

Now the the sale has been completed, Andrew Michelmore has resigned as managing director, and will head up Minmetals in Australia.

Bruce Loveday is OZ Minerals' acting chief executive until Terry Burgess commences the job in early August.

State One Stockbroking resource analyst Sam Berridge told AAP that it was quite likely that OZ Minerals would pursue acquisitions, but could face stiff competition from other cashed-up miners and Chinese parties.

"OZ is not alone in having a fair bit of cash in the kitty and they're going to be competing with the Chinese for securing top-tier assets," Mr Berridge said.

"Metal prices are still a long way below where they were earlier last year, therefore you'd assume that base metal assets should be cheap.

"But what I'm hearing ... is that asset prices haven't really come back that far.

"People are probably still unrealistic about the value of less than optimal projects that could be developed at some point.

"It has to be reasonable otherwise it ruins the economics of the project.

"OZ will probably run into the problem."

Prominent Hill began producing in February.

OZ Minerals shares closed up 5.5 cents at 96.5 cents on Wednesday.