Oz Minerals says it can can finance its future development projects without having to access financial markets and it has apologised for the poor performance on the company’s shares since the merged company started trading on July 1.
"We have a strong balance sheet, no net borrowings and the ability to generate healthy cash flows," Oz Minerals chairman, Barry Cusack and CEO Andrew Michelmore said in the letter to shareholders.
Oxiana Limited (OXR) is an Australian based copper and gold miner and exploration company. The company’s operations are located in Laos, Australia, Cyprus and the Philippines. OXR is focused on the operation and development of the Sepon copper and gold project in South East Laos, the Golden Grove copper/zinc mine in Western Australia and development of the Prominent Hill copper/gold deposit in South Australia.
"At a time when the world’s financial system is in so much turmoil, this is an enviable position to be in."
"We have a very strong pipeline of growth projects stretching out over the next decade, and we have the financial capability to finance the pipeline without being beholden to the financial markets.
"The outlook for demand for all the commodities we produce remains strong and, although there will be some volatility from one period to the next, we are very confident of ongoing growth in demand for many basic commodities," shareholders were told.
The company is in the process of completing the $1 billion-plus first sage of the Prominent Hill multi-metal mine in South Australia. It is due to come on stream in the next few weeks.
"OZ Minerals’ share price has fallen substantially in recent months.
“While part of the fall can be explained by general share market conditions, lower metal prices and higher costs, our share price performance has been worse than would have been predicted by these external factors alone.
"We are very aware that OZ Minerals’ recent share price weakness has had a devastating effect on many of our shareholders. We remind shareholders that the indicated valuation of $3.80 -$4.40 per share determined by Grant Samuel & Associates in May 2008 is substantially higher than the current share price.
"We can assure shareholders that nothing detrimental has happened to those assets over the past 4 months and we implore you not to lose sight of this fact."
"Whilst the current global economic uncertainties have prompted some investors, including hedge funds, to exit their commodity and basic materials share investments, we have recently seen a number of major, long-term investing institutions take up positions in OZ Minerals," they said in the statement.
"Operationally, OZ Minerals is performing very well; production levels are in line with our plans, and the integration of the old Oxiana and Zinifex businesses is on track.
Firmer metal prices helped as copper and zinc rose and the US dollar fell.
Latest 5 Announcements
Prominent Hill Increase in Resource Base
Letter to Shareholders
Golden Grove Zinc Production Cut