Oxiana extends life of mine ....

On 16 January 2007, Oxiana Limited (ASX:OXR) released new drill results from its Prominent Hill project in South Australia. They show the ore body extends at least twice as far as previously thought, and suggest the $A775 million copper and gold mine is a long-life operation. Because of this Oxiana is considering an expansion of its $A775m Prominent Hill copper and gold project in South Australia. In July 2005, it was thought that Prominent Hill would have a five-year mine life. Oxiana MD, Owen Hegarty, says the group is now confident that figure may be extended to between 10 and 15 years.

Drill results have indicated that the ore deposit extends up to 500 metres below the planned open-pit project, prompting the company to accelerate its drilling program to more accurately define the resource below the pit. A proven underground resource could support development of a deeper open pit as well as an underground mine at Prominent Hill in the medium term.

Meanwhile Deutsche Bank has reduced its share price target for Oxiana from $A3.07 to $A2.86, due to forecast short-term copper and gold price falls and the strengthening Australian dollar.

Oxiana is at a P/E ratio of 8 but the future PEG is not good. This information adds weight to holding Oxiana if you already have it but the current risks of declining copper and gold prices as well as the rising dollar would keep me skeptical on entering a new position.

Good Luck Investing.