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Gold/Mining/Energy : ZINC The base metal. News and Views. Symbol Zn -- Ignore unavailable to you. Want to Upgrade?

To: teevee who wrote (1438)	6/19/2006 2:21:07 PM
From: Stephen O	Respond to of 3270

Zinifex Seeks New Mines to Replace Century, Prefers Mergers 2006-06-19 03:48 (New York) By Tan Hwee Ann June 19 (Bloomberg) -- Zinifex Ltd., the world's second- largest zinc producer, favors mergers over acquisitions in order to gain new mines to help replenish ore supplies. Zinifex may use cash generated from high prices for the metal to make a ``significant'' acquisition in 2007, the Melbourne-based company said today in slides presentation to the Australian Stock Exchange. Zinifex more than doubled first-half profit to a record A$227.6 million ($168 million), helped by increased output from its Century mine in Queensland state. Prices for zinc, used to rust-proof steel, have also more than doubled on the London Metal Exchange over the past year. ``Whether it's an acquisition or merger, it's to address the issue that we need to find or replace Century which expires in 10 years time,'' said spokesman Martin McFarlane over the phone. ``A merger is more likely than an acquisition.'' Shares of Zinifex fell 80 cents, or 8 percent, to A$9.24 on the exchange at the 4:15 p.m. close in Sydney. Zinifex would prefer a merger because assets ``seems fully priced,'' for acquisitions, McFarlane said. He was repeating comments made by Paul Fowler, the company's chief operating officer, during a question and answer session at a UBS AG conference today. ``Capacity is available to make a significant acquisition,'' Fowler had said in the slides presentation. ``Cash that can't be invested for the benefit of shareholders will be returned, most likely by fully franked dividends.'' Zinifex is looking for mining assets rather than smelting assets, said McFarlane. Rival Kagara Zinc Ltd., which sells its output to Korea Zinc Co., won't have the assets to replace Century, McFarlane said when asked if Kagara is a possible target. Shares of Kagara Zinc rose 37 cents, or 10 percent, to A$4.07 at the 4:15 p.m. close in Sydney. --Editor: Gosman