OXR (ASX) michelmore agreed the miner was a target

INTERVIEW: Oxiana To Chase Larger Deals After Merger - CEO

Thursday, July 03, 2008; Posted: 04:31 AM 7 Stocks You Need To Know For Tomorrow -- Free Newsletter

MELBOURNE, Jul 03, 2008 (Dow Jones Commodities News Select via Comtex) - OXFLF By Alex Wilson Of DOW JONES NEWSWIRES

Oxiana Ltd. (OXR.AU) Chief Executive Andrew Michelmore said Thursday the miner can begin to chase larger scale acquisitions now it has completed its merger with Zinifex, but is also more of a target itself as M&A continues apace in the resources sector.

Michelmore told Dow Jones Newswires the company currently has a "number of things under review" on the M&A front and can now look at bigger deals. He declined to elaborate.

"Our business development section ... will be running the ruler over the two groups' projects that they have been looking at and also identify the things that we would have liked to have been able to do and couldn't before, but can now," he said.

Mining shares were sold off heavily on the Australian market Thursday and Michelmore said any ongoing weakness could create opportunities.

"With the heat coming out of the market, some people's aspirations of what they think their companies have been worth may be adjusted," he said.

Analysts say the combined Oxiana/Zinifex is likely to be more of target for mining majors than the individual companies were, and Michelmore agreed the miner was a target but said there had been no approaches so far.

"The combination, for all the reasons we put it together, is a more attractive entity," he said.

Oxiana Thursday announced a memorandum of understanding with PT Aneka Tambang (ANTM.JK) which will see the pair cooperate in the hunt for mining projects in Indonesia, with Antam to buy an initial 10% stake in the Martabe mine for US$66.5 million.

Michelmore said the partnership with Antam gives Oxiana a reputable local partner and a chance to chase nickel and copper projects in Indonesia.

"Our geologists believe that Indonesia is probably the most prospective are for nickel and copper deposits, both of which we are extremely interested in," he said.

But Oxiana was unlikely to look to take a stake in existing Antam operations, with the focus on new projects.

The Melbourne-based miner would be looking for local partners in other countries as well, to spread the risk and win access to local expertise and land holdings, he said.

While equity markets are looking bearish, Michelmore said the fundamentals for commodity markets remain intact, with very strong demand and tight supply.

-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4313; [email protected]

(END) Dow Jones Newswires

07-03-08 0430ET