MARKETS

Resource Pacific stands firm

MORE than a week after Xstrata's attack, Resource Pacific has this morning released a letter to shareholders amending one figure from an independent expert's report but stating that this does not alter the company's value.

Christine Feary
Resource Pacific stands firm

InterFinancial, the company responsible for the original report that valued Resource Pacific at $3.82 per share, far above Xstrata's offer of $2.85, contacted Resource Pacific to advise that they had made an error in one part of the report.

The letter reads: "It has been brought to our attention that on page 15 of our Independent Expert's Report dated December 31, 2007 ... we inadvertently used a reserve figure for the Newpac mine of 111.5 million tonnes, which represents 100% of the current mine reserves".

InterFinancial went on to say that as Resource Pacific has only a 90% economic interest in the reserves at the Newpac mine, a figure of 100.4 million tonnes should have been used for the valuation methodology.

However, it said this amendment does not impact the other three valuation methodologies, meaning the original valuation range for Resource Pacific shares, of $3.56 to $4.09, with a preferred valuation of $3.82, is still appropriate.

Resource Pacific has not yet responded to other allegations made by Xstrata, and continues to recommend that shareholders reject the mining giant's offer.

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