bidding war, page-6

This story may be of interest to the forum. Quite interesting that the broker seems to think AUM is good value at current prices.


http://finance.news.com.au/story/0,10166,19692298-31037,00.html
Miner in halt on Xstrata rumours
From: AAP
July 05, 2006
AUSTRALIAN Mining Investments has been placed in a trading halt amid feverish speculation about a major copper discovery and possible takeover offer from Swiss-based mining giant Xstrata.

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The mining explorer requested a trading halt in its shares today pending an announcement around an hour after the Australian stock market opened, following a dramatic share price spike in recent days. AMI last traded at $7.11, up $1.86 on yesterday's close, after hitting a high of $10.00 this morning. That compares to a closing price of $2.24 on June 29, when AMI released an update on its Rocklands Group Copper Project in north-west Queensland. AMI said in the update that the project had an inferred mineral resource of 59 million tonnes at a 2.04 per cent copper equivalent. It had drilled 106 holes at the project, yet to be analysed, all having visible mineralisation between 60 metres and 155 metres. The results have not only fuelled market confidence that the project will reach 100,000 tonnes, but also speculation that Xstrata will launch a takeover offer to obtain extra resources for its nearby Ernst Henry mine. Stock Resource analyst Steve Bartrop said the project was "extremely significant". "It is a substantial resource and that is the main value contributor to the market capitalisation which is reflected in the share price increase," he said. "Others are speculating that Xstrata has a very hungry mill at Ernst Henry, which mills between 9 to 10 million tonnes per annum and runs out of resources around 2010." However, it is unlikely that Xstrata will acquire AMI in the near-term given the potential of the project. "AMI would probably want to continue their exploration interests to further define what they actually have before they look into any sort of transaction," Mr Bartrop said. "One of the opportunities is building their own plant." Mr Bartrop said the share price would probably not reach $25, as some brokers had speculated, but could be good value at current level. "The current share price may not be expensive because of the tight capital structure but it really depends on what the ultimate resource," he said. AMI may have requested a trading halt ahead of an equity raising to further fund its exploration program, Mr Bartrop said.