Ann: Launch of 2010 Share Purchase Plan , page-2

Miner after $323m in unsteady float climate.

Richard Gluyas From: The Australian April 14, 2010

MINERAL Deposits has joined a number of vendors planning an initial public offering in the second half, outlining a potential $US300 million ($323m) float of its Grande Cote mineral sands project. The Melbourne-based miner said yesterday it was best for shareholders to fund the expected $US400m project via an IPO so Mineral could focus on its Sabodala gold mine, also in Senegal.

Chief financial officer Rick Sharp said Mineral would look to raise at least 50 per cent of the project's cost through equity.

"One is market conditions, but two is we've just started on this journey," he said of the IPO size.

"Of course, investment banks rule the world and they have their own views and we'll very much be guided by their thinking as well."

Mr Sharp said Mineral would sell more than 50 per cent into the IPO but retain a "reasonable" stake in the new entity.

"We certainly wouldn't sell completely out of it," he said.

"I'd imagine it would be sub-50 per cent, how low below that I don't know."

The IPO market has had a slow start to 2010, with Miclyn Express Offshore's $285m float the sole substantial listing.

Miclyn's underwhelming performance -- the stock yesterday closed 6 per cent below its issue price -- has put increasing pressure on IPO pricing before a flurry of potential listings in the second half, including Aston Resources and Bilfinger Berger's Australian asssets.

Mr Sharp said the board never planned to fund the Grande Cote project within Mineral because its US institutional investors in particular, which hold about 25 per cent of the company, are invested for its gold assets.

"From our shareholders' perspective, they do not want Grande Cote funded within Mineral to dilute both projects and particularly dilute the gold project because that's got its own expansion opportunities which need to be funded," he said.

The company, which is also listed on the Toronto Stock Exchange, expects the project to produce 75,000 to 80,000 tonnes of zircon a year when completed in 2013. Mineral's shares closed 1c higher at $1.05.