interesting

August 28, 2007 12:00am
ZINC and lead miner Zinifex yesterday reported a 24 per cent jump in full-year profit to $1.33 billion and is keen to expand by acquisition.

The group, which said the fundamentals made it confident that the good times would continue to roll, has struck a hiccup in the acquisition program, revealing it was unwinding a $199.5 million investment in a mystery target.

Zinifex's net profit for the year to June 30 was up from $1.08 billion on the back of higher zinc and lead prices, which more than offset 5 per cent lower production, to lift sales to a record at $4.61 billion.

And the market was impressed, with the group's shares finishing up 45 at $17.20, after Zinifex declared a final dividend of 70 fully franked, making total payout for the year $1.40, a rise of 75 per cent. The dividend is payable on November 16 and the record date is November 5.

Zinifex is spinning off its smelting assets into a new group called Nyrstar and intends to sell its stake into a public float, possibly as early as October, which some analysts estimate could raise $2-$3 billion for its war chest.

Acting chief executive Tony Barnes said Zinifex's focus over the next four years would be on acquisitions of already producing or near-producing assets, while it also pushed development of its recently purchased Canadian interests and the Dugald River zinc and lead deposit, under feasibility study in northwest Queensland.

When analysts noted the $199.5 million investment in Zinifex's figures yesterday, the market quickly pushed copper-gold producer Oxiana's shares sharply higher.

They hit a high of $3.57 at one point.

But Mr Barnes later told analysts: "We are currently in the process of liquidating (that) holding. It was an opportunity that we saw. Things changed."

Oxiana shares finished up 6 per cent, or 19, at $3.39.

Mr Barnes indicated the group's interest in copper and nickel assets had increased, though analysts wondered whether Oxiana -- long speculated as a Zinifex merger partner -- was too fully priced at present.