Allegiance Directors Advise Shareholders to Take No Action Until Zinifex's Unsolicited Offer Is Evaluated



    SYDNEY, Dec. 18 /CNW/ -

    Dear Shareholder,

    I am writing to advise you that Allegiance Mining NL ("Allegiance") has
received an unsolicited and conditional takeover offer from Zinifex Limited
("Zinifex") for all of the outstanding shares in Allegiance.
    Your Directors are unanimous in their view that you should take no action
and not make any decision in relation to your shareholding until your Board
has had an opportunity to fully evaluate the offer and make its recommendation
to you as a shareholder.
    To assist the Board's evaluation of the offer we have appointed Merrill
Lynch International (Australia) Limited and ANZ Corporate Finance as financial
advisers and Minter Ellison and Schetzer Brott & Appel as legal advisers.
    Zinifex's interest in Allegiance validates your company's strategy. Your
Board notes that the timing of Zinifex's unsolicited offer is opportunistic
and has been made at the beginning of the holiday season.
    The offer has also been made shortly before production is expected to
commence at the company's Avebury Nickel Project in the first quarter 2008.
When production commences, your Board expects the company to be re-rated as a
nickel producer with substantial exploration upside.
    In evaluating the offer, your Board's preliminary view is that the value
placed on Allegiance does not appropriately take into account the future
potential of the Avebury nickel province. Importantly, drilling to date has
been confined to the Avebury deposits, with 90% of drilling being confined to
approximately one square kilometre of Allegiance's nickel province. Our
province has a total area of approximately 100 square kilometres and your
Directors are committed to the continuing evaluation and potential development
of new mining ventures in this new exciting nickel province.
    We are one of a small number of emerging nickel producers globally and
are but only at the beginning of our exciting journey. Our objective is to
maximise the value of your company's extensive tenements in the province, for
the benefit of all our shareholders.
    For those shareholders unfamiliar with the takeover process, we have
included an overview of the key steps in an attachment to this letter.
    We will keep you fully informed of further developments. Once again, we
recommend that you should take no action and not make any decision in relation
to your shareholding with respect to the offer from Zinifex until you have
received the Board's recommendation.
    Your Board wishes you a very safe and relaxing holiday season and we
assure you that we will, as always, continue to act in your best interests.

    With best personal regards,

    TONY HOWLAND-ROSE
    MSc, DIC, FGS, FIMMM, FAusIMM, FAIG, CEng CHAIRMAN


    Latest updates will be available at www.allegiance-mining.com.au
    Register to receive immediate email updates.





For further information:

For further information: Tony Howland-Rose, Chairman: +61 (02)9397 7777
or +61 (0) 418 972 112; David Deitz, Director and CFO: +61 (02)9397 7777 or
+61 (0) 411 858 830

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ALLEGIANCE MINING NL

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