OZ Minerals Ltd., Australia’s third-biggest copper producer by value, may target companies including Ivanhoe Australia Ltd. and Intrepid Mines Ltd., Austock Group Ltd. said.
OZ Minerals, which had a cash balance of A$908 million ($953 million) as of June 30 and has agreed terms for a $180 million loan, may “wave as carrot” cash of around A$950 million to companies caught in general market volatility, Anna Kassianos, an Austock resources analyst, said in an e-mailed report today.
Marengo Mining Ltd. and Highlands Pacific Ltd. may also be targets as Melbourne-based OZ Minerals seeks companies with a copper resource of more than 1 million metric tons and who operate in “palatable” jurisdictions, Kassianos said. OZ Minerals spokeswoman Natalie Worley was unavailable for comment when contacted by phone.
“Given market volatility” due to concerns over sovereign debt levels in the U.S. and Europe, companies may be more willing to agree to a cash deal, Kassianos, who has a ‘buy’ rating on OZ Minerals, said.
OZ Minerals, which owns the A$1.2 billion Prominent Hill mine in South Australia, reiterated on Aug. 15 it has set aside A$750 million in cash for potential acquisitions. The company bought the Carrapateena project in South Australia in May for $250 million and last year acquired about 19 percent of copper developer Sandfire Resources Ltd. for A$100 million.
OZ Minerals fell 2.6 percent to A$11.86 at the 4:10 p.m. close of Sydney trading. The stock has declined 4.7 percent over the past 12 months.