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for the three months ending 30 september 2007

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for the three months ending 30 september 2007 Powered By Docstoc
					                 for the three months ending 30 September 2007




 Highlights
                                    Sep Qtr 07          YTD
 Gold produced at Sepon             22,355oz        81,793oz           • Group production and costs on track to meet annual forecast.
 Gold produced at Golden Grove      18,671oz        47,040oz
                                                                       • Expansion studies commenced for Golden Grove and Prominent
 Silver produced at Sepon           21,413oz        129,320oz            Hill.
 Silver produced at Golden Grove    1,346,183oz     2,716,103oz
 Average received gold Price        US$687/oz       US$664/oz          • Strong half year financial results with solid revenues and
                                                                         cash-flow.
 Copper produced at Sepon           16,139t         46,237t
 Copper produced at Golden Grove    2,420t          14,447t            • Fully franked interim dividend of 4c per share paid.
 Average LME Cash Copper Price      US$3.50/lb      US$3.22/lb
 Zinc produced at Golden Grove      35,751t         96,940t
 Average LME Cash Zinc Price        US$1.46/lb      US$1.57/lb


                                    Sepon Copper
                                        •      Copper production of 16,139t sees Sepon on schedule to meet annual forecasts.
                                        •  A resource drilling program was completed at the Pha Bing prospect with high grade copper
                                           results including 86.9m at 3.3% copper and 12m at 18.8% copper returned.
                                    Sepon Gold
                                        •      Gold production on schedule to meet annual forecasts.
                                        •   High grade results from a resource drilling program at the recently discovered Houay Yeng
                                            deposit included 21m at 20.4g/t gold and 43.8m at 8.7g/t gold.
                                    Golden Grove
                                        •      Mainly a zinc and precious metals production quarter at Golden Grove with production on
                                               schedule to meet annual forecasts.
                                        •   Studies to extend the mine life at Golden Grove through extensions of the underground mine
                                            and development of an open pit mine commenced.
                                    Prominent Hill
                                        •      Significant copper and gold mineralisation continues to be identified below the currently outlined
                                               open-pit including 87m at 1.2% copper and 21m at 3.7% copper.
                                        •   Following on from significant exploration success, studies to expand the Prominent Hill
                                            operation via underground mining commenced.
                                    Corporate
                                        •      Oxiana’s Half Year Financial Results were announced on 23 August 2007. Interim EBITDA was
                                               A$334.6 million and NPAT was A$173.5 million.
  Owen L. Hegarty                       •      Toro Energy Limited (Oxiana 25%) announced a plan to merge with Nova Energy Limited
  Managing Director and CEO                    (Oxiana 57%). If the bid is successful Oxiana will own approximately 46% of the new company
  23rd October 2007                            which will be one of Australia’s largest uranium exploration and development companies.

Oxiana Limited ABN 40 005 482 824                                                                                                                   1
         7.00                                                                                                                              Sepon Copper Plant Expansion Feasibility
         6.00
                                                                                                                                           Study
                                                                                                                                           The target for eventual copper production
         5.00
                                                                                                                                           capacity at Sepon is of order 100,000t/a. The first
                              TRIFR 12 month rolling                                LTIFR 12 month rolling
         4.00                                                                                                                              stage of the expansion is to take the existing
                                                                                                                                           plant to 75,000t to 80,000t/a, via a
         3.00                                                                                                                              debottlenecking. The main feed source will
                                                                                                                                           continue to be the Khanong orebody, but within 2
         2.00
                                                                                                                                           to 3 years copper ore will also be sourced from
         1.00                                                                                                                              the Thengkham orebodies. Definitive capital and
                                                                                                                                           operating costs and timing for the expansion are
         0.00                                                                                                                              being finalised for approval.
                Oct-06           Dec-06            Feb-07             Apr-07            Jun-07            Aug-07
                                                                                                                                           Meanwhile work continues on the second
                LTIFR – Lost time injury frequency rate                                                                                    autoclave project with orders placed on long lead
                TRIFR – Total recordable injury frequency rate (LTI + medical treatment injuries + restricted work injuries)
                                                                                                                                           equipment. This second autoclave will provide
  Figure 1. Oxiana Limited group safety performance year to date.                                                                          additional reliability and efficiency in the existing
                                                                                                                                           circuit.

                                                                     Quarterly Copper Production Statistics                                Sepon Copper Exploration
Safety                                                                                                                                     During the quarter drilling focused on resource
                                                                     Table 1
Safety performance for the quarter was                                                                                                     definition programs as exploration outside the
                                                                                                  Units        Sep               YTD       immediate mining areas slowed due to wet
consistent with performance over the previous 12                                                             Qtr 2007
months, as measured by the Total Recordable                                                                                                season conditions.
                                                                       Ore Mined                     t       377,459           1,502,986
Injury Frequency Rate, but remained above the                                                                                              Preparation of an updated resource model
Group target of 4.8.                                                   Grade                        %           4.8               5.1
                                                                                                                                           commenced for the Thengkham North and
Lost Time Injury Frequency Rate was                                    Strip Ratio                 w/o          2.6               2.4      Thengkham South deposits.
approaching the Group target of 0.9.                                   Ore Milled                    t       340,727           940,303
                                                                                                                        The infill and extension resource drilling program
Three serious injuries were sustained; two at                         Grade                 %       5.4         5.5     at Pha Bing was completed. All results indicate
Golden Grove and one at Prominent Hill.                                                                                 good continuity of mineralisation, but also
                                                                      Recovery              %       90.6       90.7
Contractor management and fatigue                                                                                       highlight internal grade variability and complexity.
management procedures were reviewed and                               Production (Stripped) t      16,139     46,237    The deposit is comprised of three small high
strengthened as a result.                                             Cathode Sold          t      16,566     46,381    grade bodies within a broader lower grade halo
                                                                                                                        of copper mineralisation. A resource estimate will
The Sepon construction project team achieved 2                                                                          be available in the annual resource statement in
                                                                     Costs
million man-hours without a Lost Time Injury.                                                                           March. Some of the results received during the
                                                                     Unit costs were steady for the quarter and direct quarter are tabulated below:
                                                                     cash costs are predicted to remain in the forecast
Sepon                                                                65-70c/lb(US) range. Costs for the remainder of Table 3
Sepon - Copper                                                       the year are expected to be slightly higher due to
                                                                     a planned 5 day shutdown for leach plant                                  Hole      From (m)   Interval (m)   Copper (%)
Mining and Production                                                maintenance.                                                            PHB077         42           13           5.5
Mining volumes were down due to wet season                           Quarterly Sepon Copper Costs
conditions.                                                          Table 2                                                                 PHB081         12           25           4.2

Throughput was as scheduled with ore drawn
                                                                                All USc / lb*             Sep Qtr 2007           YTD         PHB081         46           50           2.2
down from stockpiles.
                                                                       Direct Cash Costs                         63               65
Copper production was as planned at 16,139t.                                                                                                 PHB091         42           17           9.4
Copper production guidance for the full year                           Market Premium                           (4)               (4)
remains 60,000t to 63,000t.                                            Royalties                                 16               14         PHB097         26          7.8           17.5

                                                                       Total Cash Costs                          75               75
                                                                                                                                             PHB133        20.3          15           6.1
                                                                       Depreciation & Amortisation               18               17

                                                                       Rehabilitation                            1                 1         PHB134         17           11           6.3

                                                                       Total Production Costs                    94               93
                                                                                                                                           Continued on next page
                                                                      * Figures may not always add due to rounding


Oxiana Limited ABN 40 005 482 824                                                                                                                                                               2
 Figure 2. Sepon gold and copper operation. Location of pits, resources and prospects.


Table 3 continued                                                 Sepon - Gold                                                  Costs

      Hole         From (m)      Interval (m)        Cu (%)       Mining and Production                             Total cash costs for the quarter were on plan at
                                                                                                                    US$499/oz. Lower mining costs were offset by a
                                                                  Mining volumes during the quarter were lower, as
    PHB142             51             14              6.0                                                           draw down in ore stockpiles and a lower silver
                                                                  expected, with access to pits periodically
                                                                                                                    credit. Gold total cash costs are forecast to
                                                                  impeded during the wet season months.
    PHB153            32.6           13.2             5.0                                                           remain steady for the remainder of the year.
                                                                  Lower mining rates were compensated by higher
                                                                                                                    The average gold price received in the quarter
    PHB154             16             21              3.6         utilisation of stockpiled ore and overall milling
                                                                                                                    was US$687/oz.
                                                                  rates were higher for the quarter with a total of
    PHB171             17             25              3.2         22,355oz of gold produced.                        Quarterly Sepon Gold Costs
                                                                                                                    Table 5
    PHB185             14             9.9             13.4        Gold production forecast for the year remains at
                                                                  100,000oz.                                          US$ / oz                  Sep Qtr 2007    YTD
    PHB185            33.3            9.2             20.4        Quarterly Sepon Gold Production Statistics                      Operating (1)                             481           405
                                                                  Table 4
    PHB186             29              6              14.0                                                                        Refining & Transport                       3              4

                                                                                          Units     Sep Qtr 2007      YTD         By Product Credit (2)                     (10)          (20)
    PHB190             17            11.5             5.9
                                                                    Ore Mined                t            159,675   1,181,469     Royalties                                 25             29
    PHB194             32            35.2             3.1
                                                                    Grade                   g/t             1.0        1.8        Total Cash Costs                          499           418
    PHB198             26             23              4.9           Strip Ratio             w/o             0.2        0.9
                                                                                                                                  Depreciation & Amortisation   (3)         264           255
                                                                    Ore Milled               t            550,691   1,509,721
    PHB208             16             12              18.8                                                                        Rehabilitation   (4)                      11             10
                                                                    Gold Grade              g/t             1.6        2.0
                                                                                                                                  Total Production Costs                    774           683
    PHB213             45             11              9.2           Silver Grade            g/t             8.2       10.0

                                                                    Gold Recovery           %              80.8       81.6      1) All costs incurred by the site, including inventory changes,
    PHB214             13            86.9             3.3                                                                       corporate charges and realised foreign exchange gains/(losses).
                                                                    Silver Recovery         %              13.2       24.3      Exploration and resource drilling expenditures are not included
Intercepts are weighted averages calculated using a 0.5% copper                                                                 in mine site cash costs.
cut-off grade; maximum internal waste is 2 metres.                  Production                                                  (2) Revenue from silver at spot price.
                                                                                                                                (3) Includes amortisation of the pre-production capital, and
                                                                       Gold                 oz            22,355     81,793
                                                                                                                                depreciation of mine operations capital expenditure, which
Drill results at the Phavat North deposit, including
                                                                       Silver               oz            21,413    129,320     includes exploration, resource drilling and sustaining capital.
2.5m at 6.17% copper, highlight the potential for
                                                                                                                                (4) Provision for final site reclamation in addition to ongoing
small high grade pods of copper mineralisation in                   Gold Sold               oz            17,871     76,727     rehabilitation.
this area. Results including 6m at 3.87% copper,                                                                                Figures may not always add due to rounding.
0.71g/t gold (from 29m) at Thengkham East                         * Production reported is gold poured.
continue to highlight the potential for primary
(including skarn) copper mineralisation in the
district.


Oxiana Limited ABN 40 005 482 824                                                                                                                                                                 3
Sepon Gold Expansion Study                                    Drilling as a part of the primary gold feasibility             Development was lower than in previous quarters
                                                              study continued at Luang with results including                due to lower equipment availability and a
Developing an expanded gold processing plant to
                                                              17m at 9.71g/t gold and 7.4m at 11.62g/t gold.                 temporary shortage of trained operators.
process the primary gold ore at Sepon has been
                                                                                                                             Oxiana’s own training programs are working to
the subject of a feasibility study. To date, major            The initial resource definition program at the
                                                                                                                             rectify this situation.
achievements of the study have been the                       Houay Yeng discovery, ongoing since the start of
identification of a successful process route and              2007, yielded several excellent high grade                     Production for the quarter was as planned and
an extensive drilling program to convert                      results, confirming local extensions to                        production for the year remains as forecast at
resources to reserves and to add to the resource              mineralisation. Best results included:                         140,000t to 150,000t of zinc, 12,000 to 15,000t of
base. While a significant resource base of                                                                                   copper, 50,000oz to 55,000oz of gold, 3 to
                                                              Table 7
2.2Moz has currently been outlined (update to be                                                                             3.5Moz of silver and 10,000t to 13,000t of lead as
provided in annual resource and reserve                             Hole         From (m)      Interval (m)     Gold (g/t)   metal contained in concentrates.
statement), feasibility study work has
                                                                                                                             Quarterly Golden Grove Production Statistics
demonstrated that a higher resource base is                       YNG088             75             21             20.4
                                                                                                                             Table 8
desirable.
                                                                  YNG108            70.3           43.8             8.7
                                                                                                                                                     Units       Sep Qtr      YTD
It is expected that ongoing systematic exploration                                                                                                                2007
                                                                YNG115D1            77.3           2.15            23.9
will continue to identify further resources of
                                                                                                                              Mined Zn Ore             t         298,108    724,740
primary gold; this is now a high priority at Sepon.               YNG116             59             10              5.8
                                                                                                                              Mined Cu Ore             t         54,245     385,363
The Sepon oxide gold plant will operate during                    YNG117            57.8            8.5            11.8
2008 and 2009 on existing gold reserves. Subject                  YNG122             71             25              3.8
                                                                                                                              Grade Zn                 %          13.3        15.3
to the outcome of further exploration, this period                                                                            Grade Cu                 %           3.8         4.1
may be extended.                                                  YNG105            22.9            8.5            18.2
                                                                                                                              Milled Zn Ore            t         291,917    685,746
Infrastructure Studies                                            YNG105            31.9            6.1            14.2
                                                                                                                              Grade Zn                 %          13.3        15.4
Work on the new tailings storage dam facilities                   YNG121            60.6            8.1             7.5
                                                                                                                              Recovery Zn              %          92.5        91.7
progressed well with pipe bridges completed.                  Fire assay, weighted averages of approximate 1 metre sample
                                                                                                                              Milled Cu Ore            t         71,346     391,301
Commissioning of the new TSF will take place                  intervals, 0.5g/t Au lower cut-off, max 2m internal waste.
before the end of the year.                                                                                                   Grade Cu                 %           3.8         4.2
                                                                                                                              Recovery Cu              %          88.4        88.3
Sepon Gold Exploration                                        The initial resource estimate at Houay Yeng is
                                                              due to be completed in the fourth quarter.                      Zn Concentrate           t         70,334     189,723
Resource development drilling at several current
and planned pits delineated additional shallow                Surface exploration continued to provide                        Zn Grade                 %          50.8        51.1

oxide mineralisation.                                         geochemical coverage across the prospect and
                                                                                                                              Cu Concentrate           t         10,907      63,483
                                                              delineate new drill targets.
At Phavat North, a new gold deposit from which                                                                                Cu Grade                 %          22.2        22.8
first mining is due to commence in 2008, results              Final assay results, including 34m at 1.24g/t gold
                                                              (from 14.6m), were received from the Dankoy                     HPM Concentrate          t         10,116      22,268
confirmed extensions exist to the north and south
of the current pit design. Results included 38m at            resource drilling program and resource modelling                Cu Grade                 %           6.5         7.1
9.11g/t gold and 17m at 4.21g/t gold.                         and preliminary optimisation studies commenced.                 Pb Grade                 %          27.7        31.0

Regional drilling around the Phavat North area                Drill planning and surface exploration continued                Au Grade                g/t         55.8        61.3

highlighted areas for follow-up to assess                     at a number of prospects across the Sepon
                                                                                                                              Ag Grade                g/t         3,312      2,734
resource potential. Best results include:                     mineral district.
                                                                                                                              Contained Metal in Concentrates*
Table 6
                                                                                                                              Zn                       t         35,751      96,940
                                                              Golden Grove
     Hole           From         Interval           Gold                                                                      Cu                       t          2,420      14,447
                     (m)            (m)              (g/t)    Mining and Production                                           Au                      oz         18,671      47,040

   PVN507             62             2               25.1     A successful maintenance shutdown was                           Ag                      oz        1,346,183   2,716,103
                                                              completed. Record throughput rates early in the                 Pb                       t          2,798      6,893
   PVN507            109             6                2.6
                                                              quarter ensured production was not affected by
   PVN508             29             14               7.8     the shutdown. Employment of an additional                       * Where there are payable terms
                                                              crusher to pre-crush a portion of the ore was
Fire assay, weighted averages of approximate 1 metre sample                                                                  Costs
                                                              trialled with improved throughput the result.
intervals, 0.5g/t Au lower cut-off, max 2m internal waste.
                                                              Production was from the Hougoumont and                         Operating costs remained steady. The planned
                                                              Catalpa orebodies at Gossan Hill and from the                  increase in zinc production, and lower production
Drilling also indicated that extensions to the                                                                               of copper, saw lower by-product credits for the
                                                              Scuddles mining area which was reopened in the
Discovery East – F Pit were likely with 14m at                                                                               quarter.
                                                              previous quarter.
6.1/t gold and 28m at 4.8g/t gold returned.


Oxiana Limited ABN 40 005 482 824                                                                                                                                                       4
Golden Grove Quarterly Costs                                     producing high grade copper and zinc ore at a        Prominent Hill
Table 9                                                          rate of 300,000t/a to 500,000t/a once developed
                                                                                                                      Mine Development
                                                                 and that the Cervantes area is capable of
  All USc / lb*                       Sep Qtr 2007       YTD     producing zinc and copper ore at 200,000t/a to       Mining was ahead of schedule with a total of 33.5
                                                                 300,000t/a for more than ten years.                  Mbcm mined to the end of the quarter. With this
  Operating                                 55             55                                                         increased rate the Prominent Hill orebody will
                                                                 Golden Grove Exploration
                                                                                                                      now be reached in October, two months ahead of
  Realization                               27             28
                                                                 Exploration beneath both the Xantho and              schedule.
  By-product credits                       (58)           (70)   Scuddles Deposits continued as part of mine
                                                                                                                      Process Plant and Infrastructure
                                                                 expansion studies.
  Royalties                                 7              8                                                          Development
                                                                 Results from Xantho Extension suggest a
                                                                                                                      Construction activity increased throughout the
  Total Cash Costs                          31             21    substantial resource of both high grade copper
                                                                                                                      quarter with more than 500 people on site by the
                                                                 and zinc exists. Hole RHDD085D6 at Xantho
  Depreciation & Amortisation               11             12
                                                                                                                      end of the period.
                                                                 Extension intersected 22.4m grading 16.1% Zn
                                                                 and 1.3g/t Au from 1,603.2m, plus 6.8m grading       During the quarter work commenced on
  Rehabilitation                            1              1
                                                                 21.0% Zn from 1,635.4m. This hole                    construction of the tailings dam.
  Total Production Costs                    43             34    demonstrates the vertical continuity of the Xantho   Concrete construction for the processing plant
                                                                 Extension upwards towards the existing Xantho        proceeded well with major pours completed for
* Costs are per lb of zinc produced. Gold, silver, copper and    resource. Further drilling will test the zone        the mill pedestals, crusher, stockpile reclaim
lead are taken as credits.                                       between Xantho and Xantho Extension, the             tunnel, slabs in the concentrate storage area and
                                                                 southern and northern extents of the                 foundations for the flotation area.
Golden Grove Expansion Studies                                   mineralisation and depth potential of the Xantho
                                                                 Extension which remains open.                        The ball mill has been shipped and is due to
During the quarter Oxiana announced the                                                                               arrive on site in the first quarter of 2008.
commencement of studies into expansions of the                   At Cervantes, beneath the Scuddles deposits,
                                                                 drilling tested the southern extent of the deposit   Construction of the powerline from Olympic Dam
Golden Grove operation (Oxiana Limited ASX
                                                                 but did not provide any significant intersections    was ongoing with most of the tower foundations
announcement 02/08/07).
                                                                 during the quarter. Drilling in this area is         completed and construction of the towers
Mining and processing the copper oxide and                                                                            underway.
                                                                 continuing. Cervantes zinc and copper potential
copper sulphide resources which sit above the
                                                                 remains open at depth vertically and at depth to     A comprehensive review of the project’s progress
Gossan Hill mine, via open pit, is the subject of
                                                                 the north.                                           will be presented to Oxiana’s Board before the
ongoing studies. A mining inventory of 3Mt of 2%
                                                                                                                      end of October. Following this a detailed update
copper oxide has already been outlined and
                                                                                                                      on Prominent Hill will be made to the market.
engineering and mine planning have commenced                     Marketing
as part of a feasibility study. Infill and extension                                                                  Prominent Hill Expansion Studies
drilling programs to prove up 8Mt at 2% copper                   The LME copper price ended the period up 5% at
                                                                 US$3.50/lb. Prices benefited from ongoing strike     During the quarter Oxiana announced plans for
sulphide resources is also planned. A work
                                                                 action in Latin America which restricted supply      studies to investigate expanding and extending
program to permit these respective open pit
                                                                 while demand remained solid from most                mine life at Prominent Hill beyond the currently
resources has commenced. This work is targeted
                                                                 consumers despite market concerns over the           defined 10 year pit. (ASX announcement
for completion by the end of 2008 leading to
                                                                 impact of a slowdown in the US housing               02/08/07).
expanded copper production in 2009.
                                                                 market. Tightness in the global copper               A 12 month exploration drilling program has
Gold oxide resources also exist above the                        concentrates market further reduced spot             focused on identifying new resources from the
Gossan Hill mine and a feasibility study has                     treatment charges.                                   western end of the deposit and clearly indicates
indicated that this material could be extracted via
                                                                 Zinc prices eased during the quarter ending the      the mineralisation is more extensive than outlined
a carbon in leach plant. Options for processing
                                                                 period at US$1.47/lb as increased supply             in the June 2006 Resources Statement.
this material are being investigated.
                                                                 appeared to outpace demand growth.                   Following this exploration success, two follow up
Expansion studies are also investigating the                                                                          drilling programs for 2007 will form the basis of
viability of extending the current underground                   Lead prices strengthened considerably, gaining       studies to expand and extend the current mine
mining infrastructure to reach high grade zinc                   nearly 50% due to record low stocks and supply       life through the potential development of a
and copper mineralisation identified below the                   concerns, ending the period at US$1.42/lb.           concurrent underground mining operation
Xantho orebody to the Xantho Extensions area                     Gold prices continued to rally, reaching 27 year     immediately beneath the pit followed by a high
and below the Scuddles mine to the Cervantes                     highs, as concerns over global inflation             tonnage caving operation at depth.
area. Development of drill platforms to infill drill             increased, mine supply remained constant,
these areas has commenced. While studies                         central bank sales met expectations and investor
remain to be completed, based on current                         demand continued to escalate.
encouraging results, it is expected that the
Xantho Extensions area could be capable of


Oxiana Limited ABN 40 005 482 824                                                                                                                                        5
Program One – Concurrent Underground mining           Deep extensions of thick, mineralised hematite
                                                      breccias characteristic of the Prominent Hill
Early work on the studies has suggested that                                                                              Table 12
                                                      Shear Zone mineralisation and adjacent ore
development of the underground mine could
                                                      domains have continued to produce significant                          Hole       From      Interval    Gold     Silver
commence as early as the last quarter of 2008
                                                      results throughout the quarter. Grade continuity                                   (m)        (m)       (g/t)     (g/t)
with a 1-2Mtpa underground operation producing
                                                      has been demonstrated within these domains.
from late 2011. This material will supplement the                                                                          APSD466       81.7       14.3       2.8      5.4
8Mt/a open pit and add to copper and gold             Mineralisation has been confirmed over a vertical                    APSD471       80.6       9.4        2.2      9.4
production.                                           extent greater than 1km.
                                                                                                                           APSD473       65.5       17.0       3.9      10.3
These early estimates are based on drilling to the    Highlights of significant results received during
western end of the currently planned pit. Drilling    the quarter are:                                                     APSD480       70          6         2.5      2.83
beneath the eastern end of the pit is the focus for                                                                        APSD500       56.5       23.5       2.1      2.77
                                                      Table 10
the second half of 2007.
                                                           Hole #         From       Interval      Copper        Gold      APSD505       102        19.0       2.6      2.68
Program Two-Underground Mine Life Extension
                                                                           (m)         (m)            (%)         (g/t)
Drilling beneath the western end of the currently
                                                        PH07D310          3038          12             -          8.3     A detailed review of the district scale geophysical
planned pit has now reached depths of
approximately 1200m below the surface.                  PH07D314          517.8        13.2          12.6           -     and geochemical datasets has identified a
                                                                                                                          number of high priority gold and copper-gold
This early stage drilling has identified an             PH07D320           572          16             -          5.7
                                                                                                                          targets for immediate follow up.
extensive zone of predominantly gold                    PH07D320           694          87            1.2         0.5
mineralisation, with copper, which appears to
thicken with depth.                                     PH07D322           580          21            3.7           -
                                                                                                                          Regional Exploration
These results have indicated the potential for a      * True mineralised widths are approximately 0.6 times down hole     Australia
bulk caving operation which could extend mine         interval. Sampling and assaying protocols for Prominent Hill are
                                                                                                                          Minotaur – Oxiana Generative Alliance
life out to 2030.                                     included in the Prominent Hill Resource Statement for 30 June
                                                      2006. Refer Oxiana website.                                         Drill testing of a gravity anomaly at the Trumpeter
Drilling in the second half of 2007 on Program
                                                                                                                          prospect, 40km to the NE of Prominent Hill,
Two is designed to identify an Inferred Resource
                                                                                                                          intersected basement at 1045m. Drilling is
over a vertical extent of 500m and a strike length    Martabe Gold Project                                                continuing.
of 600m.
                                                      Martabe Feasibility Study                                           Drilling of various gravity and magnetic targets at
Prominent Hill and Regional Exploration
                                                      Resource development drilling continued in Pit 1                    Deception Hill, approximately 100km to the SW
Four holes have tested areas several hundred          of the main deposit at Martabe, the Purnama                         of Prominent Hill, did not intersect any significant
metres immediately west of the Prominent Hill         deposit, in order to increase volumes of material                   mineralisation. All targets have been tested and
deposit beneath broad intervals of anomalous          in the ‘measured’ JORC resource category.                           assay results are pending.
copper and narrow high grade gold intersected in
                                                      Work on the definitive feasibility study was well                   Drill testing of the Naraku (Mt Isa district)
previous drilling. Mineralisation has been
                                                      advanced with technical reviews of the geology,                     Thompson (north of Cobar) and Bulgunnia (near
encountered. Assay results are pending.
                                                      mining, metallurgy, process design and tailings                     Deception Hill) targets is scheduled to
Drilling has commenced progressive testing of 25      storage facility. Operating and capital cost                        commence in the next quarter.
high priority regional targets generated from         reviews are underway. The Feasibility Study will                    Queensland
detailed data compilation and review. The first of    be competed by the end of the year.
these targets at the Neptune and Caliban                                                                                  Woolgar (Strategic Minerals Corp JV - Oxiana
prospects intersected altered and brecciated          Long-lead items including the Semi Autogenous                       earning up to 70%)
volcanics containing widespread low tenor             Grind (SAG) and the Ball Mill were ordered.
                                                                                                                          Final assay results were received from the most
chalcopyrite and pyrite. Results are pending.         Martabe Exploration                                                 recent program testing deeper structures in the
Prominent Hill Resource Development                   Resource definition drilling at Berani, close to the                Woolgar epithermal field with a best result of 10m
Exploration                                           planned Purnama pit continued and the resource                      at 1.26g/t gold received from the Hillview
                                                      model for this deposit is being progressively                       structure. A full review of the drilling completed is
Development drilling programs focussed on
                                                      updated to reflect a number of new results,                         in progress.
improved definition of the Resource below the
current pit to support studies into concurrent        including:                                           Warroo (Queensland Gold and Minerals JV -
underground mining at Prominent Hill discussed                                                             Oxiana earning up to 80%)
above. Phase one of the definition drilling is
                                                                                                                          Programs were completed at Warroo and all data
complete and the results are currently being used
                                                                                                                          compiled and reviewed. Although some gold
to re-estimate the Resource for underground
                                                                                                                          results of interest were received, prospectivity for
mining evaluation
                                                                                                                          a large intrusion-related gold system was


Oxiana Limited ABN 40 005 482 824                                                                                                                                               6
downgraded. QGM was advised of Oxiana’s                While minor base metal mineralisation including        Ongoing project generation activities continued to
intention to withdraw from the Joint Venture.          8.4m at 3.9% zinc has been intersected, the            assess new areas of interest and potential joint
                                                       potential for a significant polymetallic deposit has   venture opportunities.
Laos
                                                       been downgraded. The source of most
                                                                                                              Indonesia
Exploration under the AngloGold Ashanti JV             geophysical anomalies is iron sulphide in footwall
continued to evaluate priority areas in the            units and faults. Drilling is continuing to test the   Kalimantan Gold Agreement (Oxiana earning
Truongson and Luang Prabang Belts. Follow up           last remaining targets.                                66.67%)
field work and sampling continued to concentrate
                                                       China Project Generation                               Drilling continued at various prospects on the
on priority target areas as defined by the stream
                                                                                                              Kalimantan Gold Corp JV in central Kalimantan,
sediment sampling reconnaissance program.              As a result of the recent nickel project generation
                                                                                                              testing a suite of copper-gold targets.
Results from this program are yet to identify          program, joint venture negotiations are underway
significant mineralisation. Further targets are yet    with two separate parties to explore for nickel        At Beruang Kanan prospect, weak quartz-
to be evaluated but will be the focus of the JV        sulphide deposits in districts that host operating     chalcopyrite veining was intersected in two holes
over the coming months.                                nickel mines. Geological assessment of the             completed. No significant results were received
                                                       districts has recognised an opportunity to apply       from a hole testing a Molybdenum soil anomaly
Thailand
                                                       modern exploration techniques and drilling on          associated with hydrothermal alteration. Recent
Thai Goldfields Joint Venture
                                                       several priority targets.                              drilling has targeted an eastern extension to the
(Oxiana earning 75%)
                                                                                                              main mineralised zone, and a strong copper soil
                                                       Several base and precious metal opportunities
Drilling programs testing epithermal vein systems                                                             geochemical anomaly. Final results are pending.
                                                       were identified and advanced as a part of
in the Chatree district were completed. Data
                                                       Oxiana’s current JV projects and ongoing project       Drilling continued at Beruang Tengah testing for
compilation and review to determine the next
                                                       generation efforts across China.                       a high-grade core to the previously identified
stage for this project is nearing completion.
                                                                                                              porphyry copper-molybdenum mineralisation.
Significant results received from the Central          Cambodia
                                                                                                              Well developed porphyry alteration and weak to
Ridge prospect include:
                                                       Shin Ha JV (Oxiana 80%)                                moderate porphyry-copper style veining was
Table 11                                                                                                      intersected over several hundred metres. Results
                                                       Surface exploration at Okvau – Oput in eastern
                                                                                                              are being compiled and a geological review is
                                                       Cambodia has defined an extensive mineralised
    Hole       From (m)    Interval (m)   Gold (g/t)                                                          underway.
                                                       zone associated with diorite intrusions. Twenty-
  CNR007         82.9          9.5           2.2       five rock chip samples collected from the zone         The first two holes at Mansur prospect, testing a
                                                       average 6.0 g/t gold and 83 g/t silver. Ongoing        surface geochemical anomaly at the margin of
  Including      89.3          3.1           5.2       regional geochemical sampling has also                 the porphyry intrusion, failed to intersect
                                                       highlighted a number of multi-element                  significant copper mineralisation. Drilling is
  CNR010         100           7.3           3.7       geochemical anomalies for follow-up.                   continuing to test a buried IP anomaly.
                                                       At Phnom Chi, to the north-east of Phnom Penh,         New Project Generation
  CNR012         178            10           1.6
                                                       ongoing diamond drilling at the Snongon
                                                                                                              New project generation activities continued
                                                       prospect intersected sparse alteration and
  Including      183            4            2.9                                                              across the Asia-Pacific and Australian regions.
                                                       veining with minor visible gold in most holes.
                                                                                                              Several project reviews and joint venture offers
                                                       Initial results include 1m at 115g/t gold. Further
                                                                                                              were assessed in both regions and some of
                                                       results are pending, with a comprehensive
                                                                                                              these opportunities are being further progressed
Evaluation of geophysical data is ongoing over         geological review to follow.
                                                                                                              with detailed technical review and field
areas considered prospective for VHMS                  Diamond drilling 7km to the south at Bo Opau           evaluation.
mineralisation in NW Thailand. Field work is           targeted a zone of outcropping quartz-
scheduled to commence in the coming Quarter.           molybdenite veins coincident with a gold-in-soil
Project generation programs across Thailand            anomaly. No significant results were returned          Corporate
have identified a number of opportunities of           from the first hole, with assay results from           Sale of Wiluna Operation
interest that will be progressed during the            remaining holes awaited.
                                                                                                              The sale of the Wiluna operation to Apex
upcoming field season.                                 Drilling to the SE at the Rolous prospect              Minerals NL was competed on the 11th of
China                                                  intersected several discrete zones of quartz-          October.
                                                       carbonate veining and some low grade gold
Rexing JV (Oxiana earning up to 80%)                   mineralisation.                                        Toro and Nova Energy Merger Proposal
The ongoing drilling program at the Laoxuzhai          An MOI was signed with a private Cambodian             On 6 August the Boards of Toro Energy Limited
project in Yunnan province continued to test for       exploration company covering an area                   (owned 25% by Oxiana) and Nova Energy
VHMS style base metal mineralisation, mainly           considered prospective for sediment hosted             Limited (owned 57% by Oxiana) agreed to a
targeting geochemical and/or geophysical               copper mineralization. Initial rock samples report     recommended merger by way of a scrip take-
anomalies.                                             up to 8.8% copper with highly anomalous silver         over offer by Toro for Nova. The offer terms are
                                                       and uranium.                                           5.5 Toro shares for each Nova share and if
                                                                                                              successful will result in Oxiana holding about

Oxiana Limited ABN 40 005 482 824                                                                                                                                 7
46% of the merged company on an undiluted              Corporate Information                           Registered & Principal Office
basis. At 19 October 2007 Toro had received            Board Members                                   Oxiana Limited
acceptances to the offer equal to 85.77% of            Barry Cusack       Chairman                     ABN 40 005 482 824
Nova, with the offer now unconditional, and
                                                       Owen Hegarty       Managing Director and CEO    Level 9, 31 Queen Street
extended to 26 October 2007.
                                                       Ronald Beevor      Non Executive Director
Oxiana is supportive of the transaction and has                                                        Melbourne, Victoria, Australia 3000
                                                       Peter Cassidy      Non Executive Director
accepted into the offer. If successful, the new                                                        Tel:         +61 (0)3 8623 2200
                                                       Michael Eager      Non Executive Director
company will be one of the largest listed
Australian uranium exploration and development         Brian Jamieson     Non Executive Director       Fax:         +61 (0)3 8623 2222
companies and Oxiana’s interest in the new             Senior Management                               Email:       admin@oxiana.com.au
company will strengthen our investment in the          Owen Hegarty       Managing Director and CEO
                                                                                                       Website: www.oxiana.com.au
uranium sector.                                        Peter Albert       EGM Asia
                                                                                                       Investor enquires contact: Richard Hedstrom
Dividend                                               David Forsyth      Company Secretary
                                                                                                       Media enquiries contact: Natalie Worley
An interim dividend of 4 cents per share, fully        Russell Griffin    GM Marketing
franked was declared. The dividend was paid on         Peter Lester       EGM Corporate
the 4th of October.                                                       Development
                                                       Antony Manini      EGM Exploration &            Within this statement references to Resources and exploration
Those shareholders participating in the Dividend                          Resources                    results have been approved for release by Mr A. Manini
Reinvestment Plan received shares at $3.6758
                                                       Stephen Mullen     GM Human Resources           BSc(Hons), FAusIMM who is a Competent Person as defined by
per share.                                                                                             the JORC Code (2004). He has consented to the inclusion of the
                                                       John Nitschke         EGM Australia             material in the form and context in which it appears.
Half Year Financial Results
                                                       Jeff Sells            Chief Financial Officer
Oxiana’s half year financial results were released
on the 23rd of August. Earnings before interest,
tax, depreciation and amortisation were $334.6         Issued Share Capital
million and net profit after tax was $173.5 million.
                                                       At October 22, 2007
While still solid results for Oxiana these were
down on the previous corresponding period due          Ordinary shares 1,543,727,293
to provisional pricing adjustments and currency        Unlisted options 28,200,000
movements. Normalising for these effects,
Oxiana’s underlying financial performance was          US$105,000,000 of convertible bonds
ahead of the first half of 2006. At the end of the     outstanding, which currently converts to
                                                       109,717,868 shares to be issued.
period Oxiana’s cash position of $502.3 million
had increased 27% on the first half of 2006 but
had decreased from the position at the end of          Share Price Activity for the September
2006 mainly due to increased expenditure on the        Quarter
Prominent Hill development.
                                                        High $4.02
Share Registry                                          Low $2.93
Link Market Services                                    Last $3.67 (22 October 2007)
Level 9, 333 Collins Street                             Average daily volume 16.806 million shares
MELBOURNE VIC 3000
Telephone:
Australia: 1300 55 44 74
International: +61 2 8280 7111
Facsimile: (02) 9287 0303
Email: registrars@linkmarketservices.com.au




Oxiana Limited ABN 40 005 482 824                                                                                                                                       8

				
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