have not heard any negative news about ozl, page-38

Ok suppose OZL goes out to buy a company. They will have to bid at least 30-50% premium to current price. And even then that may not be enough.
The target company could have decent management and refuse the approach or heaven forbid they may even let their shareholders vote and the deal will not proceed if those shareholders see it in their best interests.

As for borrowing, I don't see the point in borrowing at perhaps 10-12% rates to buy something while also paying a 30-50% premium unless they have get a world class deposit with long mine life.

If they do try to buy something I'll be happy to bet this will trade under $1 before it trades over $4 again.

Think about it from an independent point of view, where you are looking at all the companies as an outside investor with no holdings. You buy the best stock that you see is most undervalued with least risk.
To me there are only a handful of companies with earnings capacity of $200mill+ a year in that field right now.

Going by that metric
EQN, while cheap does have to tax issues and commissioning to get through. Also First Quantum hold a blocking stake.

SDL, while has huge potential the time frame to construct let alone the infrastructure costs rule it out.

MOL, getting funding is the main issue. Harbinger and Twiggy holding about 25-30% of the stock would also be a blocking stake.
Funding wise, the kitty OZL has would be sufficient to get it constructed. It would bring in a new commodity similiar to nickel, but one with a much better fundamental outlook given energy needs in oil, coal to liquids, oil infrastructure.

Finally
OZL, the only risks are with getting Prominent Hill online on time and on budget. The other risk is the declining zinc price making the ZFX operations loss making.

Now to me, there are two stand out stocks to buy as an outsider.
Surely a buying OZL would be the best option therefore a buy would be better than buying another company and having to pay 30-50% premium.

Also, a buyback will produce better returns in the long run once (if) zinc prices recover towards $1-1.25

So assuming profits get to $1billion in 2011 or so, then the EPS would be 31c a share as it is now, or if 300million is bought back 34.5c.
Using a P/E of 12 that would be a $3.72 share price or a $4.14.
About an extra return of 20% on current prices