strength — diversity — growth march 2008 · strength — diversity — growth march 2008. page...

1Page

Oxiana and Zinifex merger

Strength — Diversity — Growth

March 2008

2Page

Important notice

The purpose of this material is to provide general information about the proposed transaction between Oxiana Limited (“Oxiana”) and Zinifex Limited (“Zinifex”). This material is not and does not constitute an offer, invitation or recommendation to subscribe for, or purchase any shares. Neither this material nor anything contained in it shall form the basis of any contract or commitment.

Reliance should not be placed on the information or opinions contained in this material. This material does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Any decision to purchase or subscribe for shares should only be made after undertaking an independent assessment and determination as to the information to be contained in the Scheme Booklet to be subsequently issued and after seeking appropriate financial advice.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this material. To the maximum extent permitted by law, Oxiana, Zinifex and their affiliates and related bodies corporate, and their respective officers, directors, employees, agents and advisers disclaim any liability (including, without limitation any liability arising from fault or negligence) for any loss or damage arising from any use of this material or its contents, including any error or omission therefrom, or otherwise arising in connection with it.

Any forecasts and other forward-looking statements set out in this material are based on a number of estimates, assumptions and pro forma adjustments that are subject to business, economic and competitive uncertainties and contingencies, with respect to future business decisions, which are subject to change and in many cases outside the control of Oxiana and Zinifex. Any forecasts contained in this material may vary from actual financial results, and these variations may be material and, accordingly, neither Company nor their Directors can give any assurance that the forecast performance in any forecasts or any forward-looking statement contained in this material will be achieved. Neither Company undertakes to revise the material to reflect any future events or circumstances.

This material may not be lawfully published in some jurisdictions or may only be provided to certain persons and you must not view this material if to do so would be unlawful in your jurisdiction or may otherwise place either Company under obligations which it has not complied with.

All figures are expressed in Australian dollars unless stated otherwise.

3Page

Presenters

Mr Owen Hegarty

Chief Executive Officer and Managing Director

Oxiana

Mr Andrew Michelmore

Chief Executive Officer and Managing Director

Zinifex

4Page

Agenda

1. OPENING REMARKS 5

2. MERGER SUMMARY 6

3. TRANSACTION RATIONALE 7

4. QUESTIONS & ANSWERS

5Page

Building a platform for growth

Combined vision to build a major diversified mining company

A true 50 / 50 “merger of equals”—equal sharing of benefits

Zinifex Scheme of Arrangement—3.1931 Oxiana shares per Zinifex share

Combines two highly complementary asset portfolios, growth profiles, cash flow and balance sheet profiles, market positions and management teams

Strategically positioned to capture continued strong demand growth

Financial strength and management capability to accelerate growth

1

6Page

Merger summary

Merger terms ♦ 3.1931 Oxiana shares for every Zinifex share

Structure ♦ Merger unanimously recommended by both Boards♦ Implemented via Zinifex Scheme of Arrangement♦ Approximately 3,101 million shares outstanding upon completion♦ Mutual break fee of $55 million

Ownership ♦ Oxiana 50% / Zinifex 50%

Company name and headquarters

♦ New name for the combined entity to be determined♦ Corporate headquarters in Melbourne

Conditions ♦ Zinifex shareholder vote (75% of shares voted and 50% of shareholders voting)

♦ Other customary conditions and Court approval

Indicative timetable

♦ Scheme Booklet dispatched—April 2008 / May 2008♦ Zinifex shareholder vote—May 2008 / June 2008

2

7Page

Creating a major diversified mining companyA strong platform to deliver superior growth

Enhanced market position

Complementary portfolios

High quality assets

A diversified company

Strong cash flows and balance sheet

Sustainable demand for commodities

Strategic focus

Strong and complementary development pipeline

Experienced Board and management team

A

B

C

D

E

F

G

H

I

3

8Page

Enhanced market position Top 25 ASX company and 3rd largest Australian diversified mining company

S&P/ASX 200 (Resources companies¹) Global mining peers

A

Source: Bloomberg and Datastream as at 29 February 2008Note:1. * Denotes diversified mining companies

2.6

3.5

3.6

4.5

5.3

5.4

6.1

6.8

11.6

13.4

17.0

18.6

19.3

0 5 10 15 20 25

HudBay

Equinox

Lundin

Inmet

Ivanhoe

Zinifex

Oxiana

First Quantum

Combined

Vedanta

Antofagasta

Teck Cominco

Grupo Mexico

(A$ billion market capitalisation)

22.0

17.3

11.6

8.3

7.3

6.1

5.4

4.2

3.8

2.8

1.1

1.1

209.3

160.5

0 10 20 30 40 50 60 70

* BHP Billiton

* Rio Tinto

Fortescue Metals

Newcrest

* Combined

Lihir Gold

Alumina

Oxiana

Zinifex

Aquarius Platinum

Paladin Energy

Mount Gibson

Kagara Zinc

Independence

(A$ billion market capitalisation)

150 200 250

9Page

Complementary portfoliosComplementary asset portfolios with leverage to continued global growth

Oxiana assets

Zinifex assets

Oxiana exploration focus

Zinifex exploration focus

B

Operations

Project pipeline

Australia

1. Century (zinc/lead)2. Golden Grove (zinc/copper/gold/silver)3. Rosebery (zinc/lead/copper/gold/silver)

Laos

4. Sepon Copper (copper)5. Sepon Gold (gold)

Australia

9. Dugald River (zinc/lead/silver)

Canada

10. High Lake (zinc/copper)11. Izok Lake (zinc/copper)

Laos

12. Sepon Gold expansion (gold)

4

1

2

3

9

10 11

512

Projects under development

Australia

6. Prominent Hill (copper/gold)

Indonesia

7. Martabe (gold/silver)

Laos

8. Sepon Copper expansion (copper)6

7

8

10Page

High quality assets

Significant scale

– World’s second largest zinc producer by mine production

– 200kt pa copper producer post Prominent Hill

High grade mines

– High quality / low impurities concentrate

– Copper cathode production at Sepon

Long mine life

– Significant reserve and resource base

– Further exploration upside

Cost competitive

– Large scale zinc and copper producer with competitive cost position

CDiversified portfolio with attractive asset characteristics

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Laos55%

Australia45%

Laos22%

Australia78%

Zinc63%

Lead6%

Gold5%

Silver4%

Copper23%

Zinc87%

Lead7%

Gold1%

Silver4%

Copper1%Zinc

30%

Lead4%

Gold10%Silver

4%

Copper53%

Australia100%

20071 gross revenue by metal2

20071 gross revenue by geography

A diversified companyBroader operational and geographic footprint provides stability

ZinifexOxiana Combined

+

+

=

=Note:1. Pro forma for the year ended 31 December 20072. Zinifex revenue split based on production for the year ended 31 December 2007 multiplied by average London Metal

Exchange and Comex metals prices for the equivalent period

D

Prominent Hill development

Indonesia and Canada

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Strong cash flows and balance sheetFinancial strength to support growth strategy

Source: Company financial reportsNote:1. For the year ended 31 December 2007. Based on continuing operations for Zinifex

Combined pro forma EBITDA of $1,666 million for 2007¹

Combined pro forma NPAT of $918 million for 2007¹

Combined cash on hand of $2,474 million as at 31 December 2007

Combined interest-bearing debt of $539 million as at 31 December 2007

Combined net cash balance of $1,935 million as at 31 December 2007

E

13Page

Source: Broker research

Comparative zinc intensity

0

2

4

6

8

10

12

1998 2006

kg/c

apita

/ann

um

Japan Korea China

Comparative copper intensity

Source: Broker research

0

2

4

6

8

10

12

1998 2006kg

/cap

ita/a

nnum

Japan Korea China

Well positioned to capture continued strong global growth in demand

Market fundamentals remain attractive

Growth in China remains robust

– Supported by increasing growth from India, Brazil, Russia and the rest of Asia

F Sustainable demand for commodities

14Page

Pursue the shared vision of becoming a major global diversified mining company, with growing, competitive and sustainable operations

Maintain and grow the core base and precious metals businesses and increasingly diversify the operations across different commodities and geographies

Leverage the combined financial strength and management capability to capture the opportunity set presented in the global commodities market

Generate superior sustainable growth in shareholder value

Maintain the highest standards for health, safety, environment and community

G Strategic focus

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The combined company is well positioned to deliver superior growth

2008 2009 2010 2011 2012 2013 2014 2015

Prominent HillCopper / gold project

High LakeZinc / copper

Dugald RiverZinc / lead / silver

Izok LakeZinc / copper

MartabeGold / silverproject

Prominent HillUG expansion Stage 1

Golden GroveCopper sulphidepit

Golden GroveOxide pit

Sepon GoldPrimary gold project

Sepon CopperCopper expansion

2016 2017

Prominent HillUG expansion Stage 2

Selective acquisition strategy to accelerate growth

Oxiana project Zinifex project

Strong and complementary development pipelineH

RoseberyUpgrade

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Experienced Board and management team

Highly experienced Board

Innovative and experienced management team

Extensive global and domestic mining expertise

Proven track record in operating global assets and implementing development projects

A history of delivering long term growth

All Oxiana and Zinifex directors invited to join the Board

Senior management will be drawn from existing management teams

– Limited overlap of roles given complementary operations

I

Board of Directors and CEO

Senior management

Barry Cusack, Chairman

Andrew Michelmore, Chief Executive Officer and Managing Director

Combination of two individual Boards

“Resourced to grow”

Owen Hegarty, Non-Executive Director and Chairman of the Board Integration Committee

Andrew Michelmore, Chief Executive Officer and Managing Director

17Page

Oxiana and Zinifex merger

Strength — Diversity — Growth

18Page

APPENDIX A

Pro-forma overview1

Note:1. Excludes impact of Allegiance

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Notes:1. 100% basis, contained metal2. Resources are inclusive of reserves

17,807.616,611.41,196.2Zinc (Kt)

47.0

2,599.1

620.0

407.8

16.0

4,815.7

Combined

47.0

130.8

620.0

153.2

14.3

4,002.6

Oxiana

-Cobalt (Kt)

2,468.3Lead (Kt)

-Nickel (Kt)

254.6Silver (Moz)

1.7Gold (Moz)

813.1Copper (Kt)

Zinifex

Resources 1, 2

6,235.05,629.0606.0Zinc (Kt)

-

696.4

-

103.4

4.3

1,878.0

Combined

-

66.0

-

52.1

4.1

1,862.7

Oxiana

-Cobalt (Kt)

630.4Lead (Kt)

-Nickel (Kt)

51.3Silver (Moz)

0.2Gold (Moz)

15.3Copper (Kt)

Zinifex

Reserves1

Pro forma reserves & resources

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Pro forma financials & production

CombinedZinifexOxiana

73.465.38.1Lead (Kt)

10,261.26,951.23,310.0Silver (Koz)

183.031.8151.2Gold (Koz)

79.61.777.9Copper (Kt)

743.0611.0132.0Zinc (Kt)

Pro forma production (2007 calendar year)1

538.9118.1420.8Interest-bearing debt ($m)

CombinedZinifex1Oxiana

918.0612.2305.8NPAT ($m)

2,474.12,228.0246.1Cash on hand ($m)

1,666.51,071.4595.1EBITDA ($m)

2,834.81,638.51,196.3Gross revenue ($m)

Pro forma financials (2007 calendar year)

Note:1. 100% basis

Notes:1. Sum of reported results for second half 2006/7 and first half 2007/8 based on continuing operations

21Page

APPENDIX B

Asset overviews

22Page

Century (Zinifex)

Century

7+ yearsEstimated mine life

527 Kt Zn

44 Kt Pb

4 Moz Ag

CY2007A production

54.6Mt @ 12.5% Zn, 1.4% Pb, 34.1g/t Ag Resources1

46.2Mt @ 11.2% Zn, 1.1% Pb, 25.0g/t AgReserves

100%Ownership

Queensland, AustraliaLocation

Overview

Note:1. Measured, indicated and inferred

Location

23Page

Golden Grove

Location


132 Kt Zn

15 Kt Cu

8 Kt Pb

49 Koz Au

3 Moz Ag

CY2007A production

29.8Mt @ 1.9% Cu, 4.0% Zn, 0.4% Pb, 0.8g/t Au,

40.6g/t Ag

Resources1

9.9Mt @ 2.0% Cu, 6.1% Zn, 0.7% Pb, 0.9g/t Au,

46.2g/t Ag

Reserves

100%Ownership

Western Australia, AustraliaLocation

Overview


Golden Grove (Oxiana)

24Page

Rosebery (Zinifex)

Rosebery


84 Kt Zn

22 Kt Pb

3 Moz Ag

31 Koz Au

2 Kt Cu

CY2007A production

12.8Mt @ 12.1% Zn, 3.6% Pb, 135.2g/t Ag, 1.8g/t Au, 0.4% Cu

Resources1


Reserves

100%Ownership

Tasmania, AustraliaLocation

OverviewLocation


25Page

Sepon, Laos

Location

Sepon Gold: 2+ years

Sepon Copper: 10+ years

Estimated mine life

102 Koz Au

145 Koz Ag

63 Kt Cu

CY2007A production

Sepon Gold: 60.2Mt @ 1.8g/t Au, 6.4g/t Ag

Sepon Copper: 67.5Mt @ 2.4% Cu, 12.0g/t Ag

Resources2

Sepon Gold: 3.9Mt @ 1.6g/t Au, 2.8g/t Ag

Sepon Copper: 17.1Mt @ 4.6% Cu

Reserves

90%Ownership¹

Sepon, LaosLocation

Overview

Notes:1. 10% owned by Government of Laos; figures shown on 100% basis2. Measured, indicated and inferred

Sepon (Oxiana)

26Page

Prominent Hill

Copper/Gold: 152.8Mt @ 1.2% Cu, 0.5g/t Au, 2.9g/t Ag

Gold Only: 38.2Mt @ 1.1g/t Au, 1.2 g/t Ag

Resources1

25 Kt Cu

15 Koz Au

75 Koz Ag

CY2008E production

$1.1 billionEstimated capital costs

10 years for Stage 1 open pit. Underground expansion capable of supporting significant additional mine life

Estimated mine life

117 Kt Cu

86 Koz Au

390 Koz Ag

CY2009E production

Second half 2008Expected first production

68.8Mt @ 1.3% Cu, 0.6g/ Au, 3.2g/t AgReserves

100%Ownership

South Australia, AustraliaLocation

OverviewLocation


Prominent Hill (Oxiana)

27Page

Martabe,Indonesia

Location

US$310 millionEstimated capital costs

2010Expected first production

ApprovedProject status

9 year initial mine lifeEstimated mine life

200 Koz Au

2 Moz Ag

Estimated production

138.2Mt @ 1.3g/t Au, 13.5g/t AgResources2

37.7Mt @ 1.9g/t Au, 24.9g/t AgReserves

100%1Ownership

North Sumatra, IndonesiaLocation

Overview

Notes:1. 5% held in trust for local Indonesian stakeholders; figures shown on

100% basis2. Measured, indicated, inferred

Martabe (Oxiana)

28Page

Dugald River (Zinifex)

Dugald River



DevelopmentProject status

47.9Mt @ 12.1% Zn, 2.1% Pb, 44.0g/t AgResources1

naReserves

100%Ownership

Queensland, AustraliaLocation

OverviewLocation


29Page

High Lake (Zinifex)

High Lake





Resources1

naReserves

100%Ownership

Nunavut, CanadaLocation

OverviewLocation


30Page

Izok Lake (Zinifex)

Izok Lake




14.8Mt @ 12.7% Zn, 1.3% Pb, 70.5g/t Ag, 2.5% CuResources1

naReserves

100%Ownership

Nunavut, CanadaLocation

OverviewLocation


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