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To: craig crawford who wrote (577)	7/23/2001 2:29:33 AM
From: craig crawford	Read Replies (1) \| Respond to of 1643

Monday 23 July 1:42 PM Pasminco shares sink on mine sale risks au.dailynews.yahoo.com By Sonali Paul MELBOURNE, July 23 (Reuters) - Shares in embattled Pasminco Ltd, the world's largest integrated zinc and lead producer, sank on Monday after a brief surge last Friday after it took the drastic step of putting its prized Century mine on the block. Credit Suisse First Boston told clients to sell the stock on the back of the company's plan to get out of mining, lowering its recommendation from a hold. Pasminco shares hit a low of 17.5 cents on Monday and at 1:00 p.m. were trading down 14 percent or three cents at 18.5 cents, giving the group a market value of A$208 million, a far cry from its A$3 billion value just four years ago. Analysts saw several risks in Pasminco's plan to quit mining, the key being whether it would fetch enough in selling its mines to be able to slash its A$1.4 billion in debt and close out currency options, valued at a loss of A$867 million. Other risks to Pasminco's plan were that the company's management would become distracted from their cost cutting programme, currently running ahead of schedule, and that zinc prices might not recover enough next year from today's levels below 40 U.S. cents a pound to pull the company out of the red. "It's going to be tough to get the right price to reduce enough of the liabilities to give it reasonable breathing space," said an analyst who declined to be named. He estimated the company needed around A$1.5 billion to A$1.6 billion from the sale of the four mines to emerge comfortably, but added that the remaining company would end up with a capitalisation of around A$250 million. "The bottom line is if they came out with those numbers, you'd end up with a pretty small entity which probably would not have a lot of appeal to the institutional market," he said. The Century mine in Queensland is the largest by far of the four mines up for sale, and could fetch between A$850 million and A$1.5 billion, depending on what assumptions the buyer used for zinc prices and exchange rates. "Our primary concern remains that the level of liabilities post asset sales (mining) will still be relatively high for a specialist smelting group," Morgan Stanley Dean Witter said in a research report, holding its recommendation at "neutral".