agm not the only game in town, page-2

13 February 2008
Zinifex seeks full disclosure of Allegiance losses
Zinifex Australia Limited (“Zinifex”) (ASX:ZFX) has sought assurances from the
directors of Allegiance Mining NL (“Allegiance”) (ASX:AGM) that leveraged
speculative share trading by the company has ceased and all losses have been
disclosed to the ASX, as per the attached letter.
Zinifex CEO Mr Andrew Michelmore said Zinifex’s interest in the reported
Allegiance share trading losses was justified given that Zinifex had made an
unconditional Offer for all Allegiance shares.
“Zinifex is legitimately concerned to know if there are additional losses, real or
potential, beyond the $7.9 million dollars already reported to the ASX”, Mr
Michelmore said.
“Allegiance directors are yet to confirm that the company is no longer exposed
to speculative share trading, leveraged or not.
“We believe all Allegiance shareholders should be advised of the extent of the
share trading positions that Allegiance have taken, whether any of these
positions remain in place, who exactly authorised this highly speculative trading,
how exactly these positions are financed and what relationship the company
and directors have to the companies invested in.
“Zinifex is seeking full disclosure of the recently revealed share trading activities
as it may impact the future of its Offer for Allegiance.
“Zinifex is disappointed that Allegiance’s share trading activities were not
disclosed in the Target’s Statement and that disclosure thus far has been
limited to a one line entry in its Quarterly Report.
“In the event that Allegiance is facing additional potential losses in the current
volatile market or fails to provide adequate disclosure, Zinifex reserves the right
to allow its Offer for Allegiance shares to lapse on the scheduled closing date of
Friday 22 February 2008.
“Allegiance is not the only game in town. We have other opportunities we are
assessing”, Mr Michelmore said.
For more information contact:
Martin McFarlane
Group Manager – Investor & Community Relations
Zinifex Limited
Direct telephone: +61 (3) 9288 0479
Mobile: +61 (0) 417 543 638
Email: [email protected]
13 February 2008
Tony Howland-Rose
Chairman
Allegiance Mining NL
Level 11
49 – 51 York Street
Sydney NSW 2000
By facsimile/email
Dear Tony
Allegiance share trading activities
I have read the press reports about share trading activities which have caused
losses to Allegiance. However, apart from a brief email message from your
lawyers to Freehills last week, there has been little released by the company
which sheds any real light on the extent of the activities or how the company is
now dealing with these issues.
The press reports contain alarming information about the companies in which
the investments were made and the reasons for those investments.
We are not aware of Allegiance’s present position regarding any remaining
investments and whether there are any further losses expected or possible.
In light of this, can you please provide the following information:
1. details of the share investments and equity derivative positions (i.e.
CFDs etc.) that Allegiance now holds (identifying company, number of
shares held, prices paid and, in the case of derivatives, the number of
reference securities and reference prices);
2. who exactly authorised this highly speculative trading, how exactly these
positions are financed and what relationship the company and directors
have to the companies invested in; and
3. details of Allegiance’s current share trading and derivatives policy.
Your response to us should be copied to the ASX so all shareholders have
equal information or you may choose to address the issue in a stand-alone
release.
Please contact me if you have any queries in relation to the issues outlined in
this letter.
Yours sincerely
Andrew Michelmore
Chief Executive Officer