Official Oz Minerals Release 19/12/08

In light of current market conditions and its stated intention to review the profitability of all its operations, OZ Minerals today announced that it will put the Avebury nickel mine on care and maintenance until further notice.

With current nickel prices at around US$4.40 per pound CEO Andrew Michelmore said the Avebury operation was just not profitable.

“In nine months we’ve seen the nickel price drop by 68 per cent – an unprecedented fall in such a valuable commodity. This has severely tested the economics of many nickel projects worldwide, and Avebury is no exception. At these prices, it is simply more economical to keep
this metal in the ground and resume production when prices improve.

“Obviously, this is a disappointing decision to make as the mine had just recently commenced production and is particularly hard for the team on site who have achieved such great results in getting this mine commissioned and ramped up. But the reality is we had to make hard decisions about the viability of the site given the current financial challenges facing our business,” he said.

This decision will unfortunately result in the loss of 189 jobs from the operation. OZ Minerals currently has 64 employees at Avebury and also utilises the services of 125 mostly Barminco contractors. OZ Minerals will work with its employees where possible to identify alternate roles within the OZ Minerals group and will provide outplacement assistance and counselling services to any employees for whom there are no suitable alternative roles.

Notice periods will apply with the aim of completing ore haulage and processing by the end of January. Some support and management personnel will remain on site until approximately the end February to ensure a successful move to care and maintenance.

Nickel sulphide concentrate sales from Avebury are contracted to the Jinchuan Group, a Chinese non-ferrous metallurgical and chemical engineering company. We are discussing the impacts with Jinchuan and we expect the life of mine supply agreements will continue when production resumes.

The Avebury mine was commissioned in August and has produced 10,381 tonnes of nickel concentrates to date this year. Underground ore that has already been drilled will now be blasted and transported to the surface for processing together with current surface stockpiles.

The Avebury mine is located 10 kilometres west of Zeehan on the West Coast of Tasmania and produces nickel sulphide concentrates. It currently has nickel reserves of 5.85 million tonnes and resources of 18.18 million tonnes.

Released 18/12/08   Re-financing update
At its scheduled December meeting, the Board of OZ Minerals reviewed the Company’s financial position and considered the alternatives available to it. The Board’s utmost concern is that OZ Minerals’ financial position be resolved as quickly as possible such that trading in its shares can resume.

Negotiations with the Company’s banks continue and OZ Minerals will make a further announcement as soon as possible. However, a number of conditions have to be met before this can occur, and discussions are continuing.

The Chairman of OZ Minerals, Mr Barry Cusack, said “We appreciate fully the difficulties caused by the suspension of OZ Minerals’ shares, and the Company is working to address these issues.

“As explained in the release of 4 December, the Company is examining expressions of interest for a number of its assets, and Gryphon Partners is assisting in this process.

“OZ Minerals has resolved to expedite all avenues available to address its short term liquidity position, and as such will consider approaches in respect of the acquisition of interests (including controlling interests) in any of its assets, or approaches from parties wishing to acquire some or all of the Company’s shares.

“We are also examining all options available for the issuance of new equity.”
Goldman Sachs JBWere is advising OZ Minerals in relation to its present position and the development of options for the Company going forward.

Coober Pedy Regional Times