24 October 2007
MIDWEST REITERATES TAKE NO
ACTION ADVICE
The Board of Midwest Corporation
Limited (“Midwest”) reiterates its
advice to shareholders to take no action in relation to the unsolicited offer
from Murchison Metals Limited (“Murchison”).
Murchison lodged its Bidder’s
Statement with Midwest and the Australian
Stock Exchange on 19 October 2007.
Midwest Chief Executive Officer Mr
Bryan Oliver said “When comparing Midwest’s and Murchison’s
portfolio of assets, Midwest offers a much larger resource, a greater number of
projects, a larger area of exploration tenements, same timing for targeted
production start-up and identical infrastructure risks. Despite these facts,
Murchison’s offer values Midwest’s
assets at approximately half the value of its own assets.”
“The Midwest
management team and Board are very confident in our ability to deliver a future
standalone iron ore producer of scale that will deliver significant long term
value to our shareholders. We have a number of projects at various stages of
development, creating a pipeline with significant growth potential, which we
believe over time, will command a premium valuation. In no circumstance is Midwest’s future success dependent on a deal with
Murchison,” Mr Oliver said.
The Midwest Directors express
concerns about the lack of information in Murchison’s Bidder’s
Statement in relation to a number of key issues, including:
- The
value and achievability of potential synergies. The Bidder’s
Statement fails to quantify the potential value of any synergies. It also
does not provide sufficient information about the risks involved in
achieving the synergies under different ownership structures
- The
limited disclosure provided in the Bidder’s Statement about the
Mitsubishi Agreement and how Murchison plans to integrate Midwest into
Crosslands Resources Ltd (“Crosslands”) or otherwise. The
current information provided in the Bidder’s Statement raises more
questions than it answers and fails to disclose how Murchison is planning
to integrate Midwest into Crosslands and
the numerous risks involved.
Following this initial review of the
Bidder’s Statement, the Midwest Directors reiterates their unanimous advice
to shareholders that they TAKE NO ACTION
in relation to Murchison’s offer. The Midwest Board will make its formal
recommendation to shareholders in due course, once the offer has been fully
reviewed and considered.
- Ends -
For further information contact:
Martin Debelle, Cannings Warrick
Hazeldine, Purple Communications
Ph: + 61 2 9252 0622 Ph:
+ 61 8 9485 1254
Mob: + 61 409 911 189 Mob:
+ 61 417 944 616
About Midwest
Corporation Limited
Midwest is an ASX listed company (MIS) in the iron ore industry
which generated its maiden profit in 2006. The assets of Midwest are all
in the Mid West region of Western
Australia and include:
1)
Koolanooka / Blue
Hills Projects – a Direct Shipping Operation (DSO) commenced
in 2006 from the existing stockpiles of haematite iron ore at 1 million tonnes
per annum (mtpa) which will move to a hard rock mining programme in early 2008
and ramp up towards a 2 mtpa rate in 2008.
2)
Weld Range and Koolanooka Magnetite Projects – studies
projects, together with its joint venture partner Sinosteel Corporation,
commenced in early 2006 for these two projects. The anticipated tonnage for the
Weld Range project is up to 20 mtpa and for
Koolanooka Magnetite at a minimum 6 mtpa. The studies project for Weld Range
is expected to be completed in early 2009 when a decision will be made by Midwest on whether to move this project into an
operational phase.
3)
Jack Hills Project – highly encouraging haematite project of up
to 10 mtpa. This project is expected to commence after the infrastructure
for Weld Range
and Jack Hills has been established.
4)
Robinson Range Project – a prospective
exploration project for haematite located in the same region as Weld Range
and Jack Hills. An intensive exploration
drilling campaign is scheduled to commence in early 2008.
Midwest Corporation
Projects
***
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