""In relation to Zinifex Australia Limited''s off-market takeover offer for all the ordinary shares in Allegiance Mining, we attach a formal notice of variation which was lodged with ASIC and Allegiance today and which will also be sent to Allegiance shareholders that extends the Offer period, together with an accompanying letter sent to Allegiance shareholders,"" read the statement.

Allegiance is set to open its nickel mine on Tasmania''s West Coast soon.

Midwest rejects Sinosteel offer

Australian prospector Midwest Corp, buoyed by a big jump in iron ore prices this year, rejected a $1 billion-plus takeover proposal from its major shareholder, the Chinese commodity trader, Sinosteel.

Midwest''s chief executive, Bryan Oliver said Midwest had been unable reach an agreement with Sinosteel over its offer of $5.60 a share and valuing the company at $1.19 billion.

This is the second rejection of a suitor by Midwest, which believes its potential to capture a sizeable chunk of booming sales of iron ore to Asian steel makers is not fully appreciated.

Iron prices are likely to continue rising after this weeks agreement between Japan''s four largest steelmakers, POSCO of South Korea and Brazilian mining giant Vale to pay 65% more for iron ore in 2008.

Oliver told Reuters today that the agreement with Vale was at the top end of forecasts and the price could be even better for Australian ore.

""That gives us a lot of confidence there are still a lot of legs in the next couple of years in terms of our share price,"" Oliver said.

Shares in Midwest lost 7%.