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Monday, February 20, 2012

OZ Minerals to sell off Cambodian gold assets

OZ MINERALS announced plans yesterday to sell off its gold assets in Cambodia, closing a controversial chapter for the company that was forced to deny allegations of impropriety last year in relation to this business.

The Cambodia Daily newspaper last year alleged relatives of government officials had received hundreds of thousands of dollars after the Australian company bought out its local partner in a goldmining venture.

The newspaper said the trio were appointed in 2006, just before Shin Ha concluded a joint-venture agreement with Oxiana, headed by Owen Hegarty. The company was later named OZ Minerals after merging with Zinifex.

OZ Minerals and the Cambodian government denied any impropriety. A company spokeswoman said in July last year that an internal investigation could find no evidence of wrongdoing.

Last week this newspaper reported that documents released by the federal Attorney-General's Department under freedom of information laws showed that officials in the financial crime section were last year taking a keen interest in the allegations.

OZ Minerals has had the Cambodian business under review since April last year when it became clear that the gold exploration program was not going to yield the 2 million ounce resource the company needed to make it a starter project.

The company sold off its rights to Renaissance Minerals yesterday for $17.8 million in cash, shares and options with a further $22.5 million due if project milestones are achieved from the deposits with estimated gold reserves of 729,000 ounces.

''We have concluded that this project does not fit within OZ Minerals' strategy with regard to scale in relation to the commodity and our overall preference for mid-tier copper projects,'' said OZ Minerals chief executive Terry Burgess.

OZ Minerals sold all its operating mines, except Prominent Hill, to China Minmetals in June 2009 for $US1.39 billion after it failed to reach an agreement with its banks to repay debt.

It only survived as a separate company when the Treasurer, Wayne Swan, blocked the sale of Prominent Hill, a copper and gold mine in South Australia.

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