3:00AM New York, 7:00PM Sydney- ASX 200 index lost 3%

Market Sentiment

ASX 200 index shed 3% or 166.3 to close at 5,405.80

The Preliminary market turnover was 1.43 billion worth $5.82 billion, with 225 stocks moving up, 1,030 trading down and 298 unchanged. Telstra was the most active with 56.7 million shares worth $250.2 million changing hands.

Market Driver

Oxiana Limited and Zinifex Limited today announce to merge their businesses, creating a new major diversified base and precious metals mining company with global capability. The merger worth $6.2 billion between two companies will result in the second world’s second largest zinc producer and would be re-named and will remain headquartered in Melbourne, Australia.

Zinifex shareholders will receive 3.1931 Oxiana shares for each Zinifex share. The offer values Zinifex shares at $12.68 each. The terms reflect a merger of equals with the merged entity to be owned 50% by Oxiana and Zinifex shareholders.

The company said on completion of the merger, Barry Cusack, Chairman of Oxiana would also be the chairman of the new entity and Andrew Michelmore, current chief executive and Zinifex, will be the chief of the merged entity.

Zinifex said it would seek a court order to convene a Zinifex shareholders'' meeting before June 2008, to approve the merger. Subject to receiving other necessary court and other approvals, the merger is expected to be implemented before July 2008. Zinifex said that the proposed merger would not affect its recommended takeover offer for Allegiance Mining NL.

""We are proposing a true merger of equals and the ratio of 3.1931 Oxiana shares for each Zinifex share reflects this,"" said Mr. Cusack and Mr. Mansell, in a joint statement.

""The merger terms reflect our mutual judgment that relative market valuations are the appropriate basis to ensure both groups of shareholders receive equivalent value in the proposed merger. We took into account the volume-weighted average prices of both companies over the period during which the Boards of Oxiana and Zinifex have been actively considering the proposed merger, due diligence and the prospects of each company,"" said in a joint-statemnt issued by both companies. Oxiana''s share 1.8% and Zinifex''s share rose 9.2%.

Gainers and losers

Of the ASX 200 index stocks, Zinifex Limited led the gainers with a rise of 9.2% followed by increases in Lynas Corp Limited of 6%, in Compass Resource of 5.9%, in Sino Gold Mining of 4.2%, and in Newcrest Mining of 4%.

Of the ASX 200 index stocks, Allco Finance GR led the decliners with a fall of 28.7% followed by losses in City Pacific Limited of 21.6%, in APN/UKA European of 12.5%, in Valad Property of 11.4% and in Australian Wealth of 10.4%.

Allco Finance board members resign

Allco Finance Group Ltd today announced the resignation of its chairman David Coe, and executive directors, Gordon Fell and David Turnbull with immediate effect.

Allco''s secretary Tom Lennox said in a statement that with the resignation of the three executive directors the board now has a majority of independent non-executive directors, a situation that suits investors.

Bob Mansfield, the lead independent director and deputy chairman, would chair the meetings of the board.

Today''s announcement continues the implementation of a new corporate governance regime within Allco, which commenced in April 2007 with the appointment of chief executive David Clarke.

Allco, which manages assets including ships, aircraft and ports, is selling some businesses as part of negotiations with banks on $250 million of loans due May 1 and another $900 million of debt.
Allco''s share fell 28.7%.