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Refinancing of Ashton`s current long-term debt facility

Document date:  Wed 20 May 1998
Published:  Wed 20 May 1998 00:00:00
Document No:  137528
Document part:  A
Market Flag:  N

ASHTON MINING LIMITED                         1998-05-20  ASX-SIGNAL-G

HOMEX - Melbourne                                                     

Ashton Mining Limited (Ashton) today announced its intention to raise
approximately $70 million to fund its three diamond development
projects. The $70 million will be raised through a combination of a
10% Placement to institutional investors and a 1 for 10 Rights Issue.

Ashton's major shareholder, Malaysia Mining Corporation Berhad (MMC),
has agreed to take up its pro rata share of both the Placement and
Rights Issue (in total approximately $33 million). The balance of the
Rights Issue has been underwritten by ANZ Securities Limited and the
Placement jointly and severally underwritten by ANZ Securities
Limited and Merrill Lynch International (Australia) Limited.

The renounceable Rights Issue comprises 1 New Share for every 10
Ordinary Shares at $1.15 per share. Rights trading will commence on
25 May 1998 and the last day of Rights trading is 22 June 1998. The
Books closing date to determine entitlement to New Shares is 2 June
1998. The Prospectus will be mailed to all eligible shareholders in
early June.

The Placement of approximately 28 million Ordinary Shares took place
on 19 May 1998 and was at $1.23 per share, raising $34.4 million.

The funds are to be used for Ashton's three diamond development
projects: Cuargo in Angola, Merlin in Australia and Cempaka in
Indonesia. These projects are expected to establish Ashton as a mine
operator and further consolidate the Company as a major participant
in the global diamond industry.

The Company's current operating cash flow is expected to be drawn
upon for future development at Argyle (Ashton 40.1%). Alternatives to
extend the operation of the Argyle mine are, under active review.
Based on studies to date, a three million tonnes per annum
underground mine, employing sub level caving and producing some 12 to
15 million carats per annum, appears to be the probable outcome. Such
a development is expected to require a total project capital
investment in the order of $115 million. A possible pushback of the
open pit remains to be determined and could supplement future
underground production.

Ashton's Chief Executive, John Robinson, said, "In its twenty year
history, Ashton has never before been at the stage of having three
diamond projects all nearing production at the one time. The funds
raised will support project development and allow all three projects
to be in production by early next year."

The Cuango River project (Ashton 33.3%) in north-eastern Angola is the
country's largest diamond Concession, The high quality gem diamonds
are worth an average US$250 per carat. Production is expected to
commence early in the second half and to steadily build over the next
few years to around one million carats a year.

Merlin (Ashton 77.4%) in the Northern Territory is planned to be
Australia's second hardrock diamond mine. A staged development will
see construction of a 700,000 tonnes per annum plant, with ore
sourced from a combination of open pit extraction from previously
sampled pipes and bulk samples from those not yet tested among the 12
kimberlite pipes identified to date. An average diamond value of
US$70 per carat has been ascertained from bulk sampling of four of
the pipes. Plant construction is expected to commence at mid year
with plant commissioning in early January 1999.

Cempaka (Ashton 48%) is an alluvial diamond project in south-eastern
Kalimantan, Indonesia. Two channels are estimated to contain a
dredgeable resource of some 260 million cubic metres containing high
quality gem diamonds. The project is scheduled for trial mining,
designed to confirm diamond grades indicated by drilling and limited
bulk sampling, and to recover diamonds for valuation and sale. A
bucketline dredge capable of a throughput of 2.5 million cubic metres
per annum dredge is to be re-assembled on site and fitted with a
diamond recovery plant during the second half of the year.

With the development of these exciting opportunities Ashton will
become a multi-source diamond product wet) positioned for further

Ashton also confirmed today that its current long-term debt facility
is being refinanced through an underwritten offer through Australia
and New Zealand Banking Group Limited. The new maturity date is June
2001. The facility size is US$195 million, which is the drawn amount
of the current facility. The new facility is expected to be fully
syndicated and finalised by July 1998.

For further information please contact:

John Robinson 

Ashton Mining Limited 
4th Floor, 441 St Kilda Road 
Melbourne, Vic 3004 
Telephone: +61 3 9828 4200 
Facsimile: +61 3 9828 4211