A big week next week for shareholders in OZ Minerals.
They meet on June 11 to vote on the sale of most of its assets for $1.46 billion to a Chinese Government controlled company.
And this morning there’s media talk of another deal floating to the surface to be put to the OZ board today.
It is coming from a group of banks and involves, from what the reports say, in replacing the $1 billion or so in debt that OZ still owes, with debt and other securities.
It’s claimed some shareholders (big institutions) have put money into this new deal, but for smaller shareholders it will be a question of, why remain in debt when it nearly brought the company down late last year.
But for now all Chinese government approvals required to meet the transaction have now been received, leaving the final decision to shareholders next week, Oz Minerals told the ASX yesterday.
China Minmetals Non-Ferrous Metals Company’s (Minmetals) bid to buy most of OZ Minerals assets was approved by Federal Treasurer Wayne Swan in April.
That was at the second go; the federal Government has refused to approve it because the Prominent Hill mine of Oz Minerals was said to be too close to the Woomera weapons range.
It was excised from the deal and will be retained by Oz Minerals; a decision in retrospect that is looking better for OZ every day as metals prices improve.
Oz said yesterday that China’s National Development and Reform Commission signed-off on the proposal on May 18, and other agencies in China have now also given it the OK.
"With all other conditions precedent now met, we now look forward to putting this vote to shareholders at our AGM (annual general meeting next week,” Mr Cusack said.
OZ Minerals needs the funds from the asset sales to repay debt of about $1 billion, due to be repaid by June 30.
"The Minmetals offer provides a complete solution to our refinancing issues,” Mr Cusack said.
"It is timely and allows OZ Minerals to repay all of its debt.
"It also sees the company retain the Prominent Hill operation and exploration projects and following the transaction will have approximately $500 million cash with which to continue to develop Prominent Hill and pursue other activities.”
Meanwhile, OZ Minerals’ planned sale of its Martabe gold mine in Indonesia has also drawn closer to completion.
OZ Minerals said it had received consent from all of its requisite lenders for the $US211 million ($A257.03 million) sale of the project to China-SciTech Holdings.
China-SciTech shareholders’ approval is the only hurdle left to that deal going ahead.
The company conducted an analyst’s tour of Prominent Hill mine and its facilities in South Australia this week. It filed this presentation with the ASX yesterday
In a summary of an upbeat presentation OZ Minerals said:
"Resource inventory growth continues to be achieved at low cost by industry standards
"Prominent Hill deposit remains open in most directions, and intensive drilling continues to extend known mineralisation and discover new zones e.g. Western Copper
"Outstanding potential exists to further increase the resource base via extension drilling, conversion of near mine exploration results and ongoing regional testing in the Mt Woods Inlier."
OZ Minerals shares eased 4 cents to 90 cents in yesterday’s strong market. That was a fall of 4% when the market rose 1.6%.
And, it’s probably not a big deal, but the Foreign Investment Review Board (FIRB) has approved a plan by another Chinese state controlled firm to become the largest shareholder in an Australian miner.
We have had the Minmetals deal approved (minus Prominent Hill), Chinese control and investment in iron groups like Midwest, Murchison and Mount Gibson, plus small metal miners like Perilya, Golden West and of course Fortescue. Metals.
And then there’s the 9.7% stake Chinalco has in Rio Tinto and wants to lift it to 18%.
China’s fourth largest steelmaker Shougang has a 40% stake in Mt Gibson Iron – an iron ore miner in Western Australia.
Yesterday zinc miner Terramin Australia’s new biggest shareholder won federal approval.
And the way is now clear for China NonFerrous Metals Industry’s Foreign Engineering and Construction Co (NFC) to take an 11.1% stake in Terramin for $10 million.
NFC required FIRB approval because the Chinese Government owns 33% of the company, which develops overseas mineral resources to meet Chinese demand for nonferrous metals.
NFC has also received approval for the transaction from China’s National Development and Reform Commission.
Approvals from China’s State Administration of Foreign Exchange and Ministry of Commerce are expected soon, Terramin said in a statement to the ASX yesterday.
NFC is the largest Chinese contractor for foreign industrial projects in the nonferrous metals sector.
