pna - weres brings out the takeover detector Were brings out the...

pna - weres brings out the takeover detector Were brings out the takeover detector
By Barry Fitzgerald
Resources Editor
August 29, 2005

GARIMPEIRO is often accused of talking up the takeover potential of just about every listed mining stock. So this week he leaves it to Goldman Sachs JBWere to do the talking. The broker reckons that consolidation and merger and acquisition activity is alive and well in no less than nine market sectors, including resources and energy.

It argues that slowing revenue growth in 2005-06 has increased the incentive for corporates to "buy" earnings growth. What's more, strong corporate balance sheets and cash flows have arrived at a time of low interest rates.

That means that, despite high equity market ratings, most transactions are earnings accretive. BHP Billiton found that out, even though it waited for "Big" Mick Davis at Xstrata to convince it to pay

$9.2 billion for WMC Resources when the reality was that it could have snapped it up for $5.5 billion barely six months earlier. Goldman has come up with a list of "potential candidates for consolidation on the basis that these companies possess assets that are considered strategically attractive in their own right or in combination with other assets". That's a long way of saying that they are takeover targets.

We're talking about stocks with a combined market capitalisation of $28 billion — $5.7 billion in the energy sector and $22.3 billion in the resources sector.

Energy sector candidates are Australian Wide Exploration (AWE), Oil Search, Roc Oil and Tap Oil.

Resources sector tips are Alumina, Newcrest, Iluka, Macarthur Coal, Jubilee Mines, Lihir Gold, Pan Australian Resources, Bendigo Mining, Perseverance, Zinifex and Oxiana.




ASX ANNOUNCEMENT
30 August 2005
Shareholder Share Purchase Plan raises over $4.4 million
Pan Australian is pleased to report that the Company has received applications under the Shareholder
Share Purchase Plan (the ‘Plan’) for a total amount1 of $4,426,595. Approximately 20,588,920 new
ordinary fully paid shares will be issued in accordance with the Plan.
After the new shares have been issued, Pan Australian will have 751,021,510 shares on issue and nearly
$23 million cash on hand. The funds raised will be directed towards the following:
�� The acquisition from Newmont South East Asia Pte Limited of all of its outstanding interests in Phu
Bia Mining Limited2;
�� The expanded exploration and drilling program in the Company’s Contract Area in Laos. The
exploration and drilling program is being undertaken to add to the gold oxide ore reserve base of the
Phu Bia Gold Mine and to identify further gold and copper-gold resource targets; and
�� Increase the Company’s flexibility to fund its current growth profiles. The Company has recently
received most of the reports for the feasibility study on the Phu Kham Copper-Gold Project and will
report on the key findings following an internal review that will be completed during September.
The funds raised will satisfy working capital requirements until a decision on mine construction is
formally taken in late 2005 or early 2006.
For further information contact:
Mr. Gary Stafford Mr. Joe Walsh
Managing Director General Manager – Corporate Development
Pan Australian Resources Limited
Tel: +61 7 3878 9299
Website: www.panaustralian.com.au
Email: [email protected]
1 Subject to funds clearing.
2 Pan Australian’s interests in Laos are held through Phu Bia Mining Limited, a Lao registered company owned 80% by Pan Australian
and 20% by Newmont South East Asia Pte Limited.