urgent letter to ozl directors, page-38

All, hi!

I have sent the below letter to [email protected] last night which was sent to AM last week. Ian wishes to print the below letter on the newswire.

Would the original author have any problem with Ian printing this letter?As I didn’t originally write this letter I don’t wont to step on any ones toes and cause any problem with my fellow poster.
I will mention to Ian that the original letter was from a Hotcopper poster.


Wally

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Dear Andrew

Following constant press speculation on alternative funding offers for OZL I urge you to seriously consider them taking into account the following:

Circumstances have changed so much since directors were forced into the sale process, which was understandable at that time, but everywhere we are seeing changes to deals done. Rio/ Chinalco is the obvious but capital raisings in the resource sector are becoming easier with other examples Pan Australian and First Quantum Minerals. Now is the time for Oz Minerals to consider alternatives and a changed deal.

The offer price US$1,206 million was worth A$1,726 million on the 1st April when the offer was made. Today it is worth A$1,504 million, a drop of $222 million due to the appreciation of the Australian dollar.

The Independent Experts Report has valued the assets to be sold at between A$1,979 million and A$2,286 million, far above the offer price by Minmetals but justified because of a lack of an alternative. Today we appear to have more than one alternative.

The break fee, 1% of US$1,206, US$12.06 million is inconsequential compared to the value being lost by shareholders.

Metal prices have risen considerably since the initial takeover offer and all projects should be cash flow positive. Sepon Copper, producing at last quarters production rate and costs , cash flows at US$3,000 per tonne or over US$200 million per annum. Our share of this asset alone is worth more than Minmetals total offer price using a conservative multiplier.

Taking into account these changes could you please answer the following questions:

Even in the Independent Experts Report there is confirmation that we are sellers at the absolute bottom of the cycle. Is the sale now absolutely necessary and have discussions been held with the banking syndicate putting to them the alternatives and seeking their opinion?

Have the offers been put to all directors in detail with independent advice?

Have directors with vested interests been excluded from consideration of the alternative offers?

As a shareholder presently I have two choices, to vote for or against the Minmetals offer. In the light of the changed circumstances could you provide all shareholders with details of the funding offer and the banking syndicates' position regarding those offers so that I can cast my vote, fully informed?

Yours faithfully.



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