Zinifex`s Offer for Allegiance pays for upside
Zinifex Limited (ASX: ZFX.AX) (“Zinifex”) notes Allegiance Mining NL’s (ASX: AGM.AX) (“Allegiance”) announcement earlier today increasing the resources at the Avebury nickel project.
Zinifex’s Offer recognises that the Avebury area is prospective for nickel and that Allegiance had previously foreshadowed the announced increases to its resources.
In formulating the valuation behind Zinifex’s Offer, Zinifex assumed that sufficient resources would be discovered to increase the mine life beyond its current 9-year life, and expand the processing plant beyond its current 900,000 tonnes per annum design capacity. These expansions and extensions will also require considerably more capital to be invested in exploration and development in the area. Zinifex has also assumed that Avebury will be successfully commissioned in March 2008.
Zinifex’s offer is compelling for Allegiance shareholders, providing an immediate opportunity to realise a substantial all-cash premium for their investment. This is particularly so when shareholders take into consideration the current volatile and uncertain market conditions.
Zinifex is offering Allegiance shareholders $0.90 cash per share increasing to $1.00 cash per share for all Allegiance shareholders if Zinifex obtains a relevant interest of more than 30% of Allegiance shares, or if the Allegiance Board of Directors recommends the offer.
For more information contact:
Matthew Foran
Manager – Stakeholder Relations
Zinifex
Direct telephone: +61 (3) 9288 0456
Mobile: +61 (0) 409 313 637
Email: matthew.foran@zinifex.com
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