Allegiance Mining has advised its shareholders to accept a revised takeover offer from Zinifex valued at A$1.10/share.  The offer is final as to price, in the absence of a superior proposal.

The increased offer represents an attractive premium for Allegiance shareholders:

• Cash offer price A$1.10
• Premium to closing price 55% on December 14, 2007
• Premium to one month volume weighted average price 58%.

Allegiance directors Tony Howland-Rose, David Deitz, Barry Sullivan and Eddie Lee each recommend that all Allegiance shareholders accept the revised offer in the absence of a superior proposal and will accept the revised offer in respect of any Allegiance shares held by them or on their behalf, in the absence of a superior proposal.

Chairman Howland-Rose: “I believe the revised offer better reflects the value of the Avebury project. In the absence of a superior proposal I and the majority of the board intend to accept the $1.10 offer and we recommend that shareholders also accept the revised offer.”

“This recommendation to accept Zinifex’s offer has been made after careful consideration and the decision to recommend it was not taken lightly, particularly in light of the current volatility in world equity markets,” he said.

Zinifex and Allegiance have entered into an agreement, which includes a traditional “no shop” clause, which is subject to the usual fiduciary carve-outs.  This clause requires Allegiance to close its data room immediately.

Allegiance has agreed to appoint Zinifex nominees to Allegiance’s board once Zinifex reaches 50.1% acceptances, at which time the majority of Allegiance directors will resign.  Zinifex has agreed to allow two of the current Allegiance directors (Sullivan and Shi Peirong) to remain on the board of Allegiance, should they choose to do so, until Zinifex acquires a relevant interest in 90% of Allegiance shares.