Zinifex last month made a $775 million bid for Allegiance to gain control of its Avebury nickel mine in Tasmania where output is due to start in March.

The National Australia Bank today denied that it is a direct lender to Allco Finance Group, but has lending relationships with entities associated with the finance house. NAB said it had provided a margin loan facility of about $110 million to Allco Principle Investment, which is one of Allco''s major shareholders.

The bank advised the stock exchange in a statement that the loan did not involve the sale of any shares and that it did not anticipate any material loss at the moment.

NAB said it also had a $95 million fully secured facility with property investor Rubicon Holdings, which was recently acquired by Allco, with $65 million of the $95 million credit facility has been drawn. The bank added that it had other lending relationships to entities in which API or Rubicon-held equity interests.

Allco shares jumped 24% on the news after falling 26% in yesterday’s trading. The shares dropped 26% yesterday after Allco''s largest shareholder, was forced to dump stock by margin calls from two of its lenders. Shares in Allco managed fund, Allco Max Securities and Mortgage Trust fell 18.5% while NAB shares rose by 4.6%.

Australia''s largest independent gold mining company, Newcrest Mining Ltd stock fell 2.6% after the company announced a cut in its full-year output forecast and raised cost estimates at its largest project Telfer by 9%. Telfer is the largest gold mine in Australia.

Newcrest said costs rose to $607 an ounce from $446 per ounce in the previous quarter. Work at the site at the $1.5 billion Telfer project in Western Australia has been hampered by delays and cost overruns.

Company said gold production in fiscal 2008 might be trimmed by 54,000 ounces to between 430,000 ounces and 450,000 ounces on limited trucks and harder variety of ore to process.

Lihir Gold Ltd gained 3.1%.

Australian explosives maker, Orica Ltd, today ruled out making further large acquisitions after spending $2.1 billion since 2005 building its mining services business.

Chief Executive Officer Graeme Liebelt told reporters that they might engage in smaller deals. He said their decision had nothing to do with debt markets or the state of their balance sheet but wanted to focus on consolidating the recently acquired businesses. The company has acquired twelve companies in the last three years.

The acquisitions positioned the company as the main supplier of explosives, chemicals and bolts to large companies including mining giants, Rio Tinto Group and BHP Billiton Ltd.

Mining services now account for Orica''s fastest-growing source of revenue and has grown 82% between the years 2004 and 2007.

Local press in Australia reported that $800 million equivalent ($701 million) revolving loan for Australian investment firm Babcock & Brown Infrastructure Ltd was launched to general syndication today.

The sources said around $414 million of the loan would help fund the company''s 32% share of $2.5 billion acquisition of National Gas Pipeline Company of American. The balance of the loan would be used to refinance an existing bridging facility.

Australia & New Zealand Investment Bank, Commonwealth Bank of Australia, Dresdner Kleinwort and Royal Bank of Scotland were reported to have been mandated lead arrangers and have fully underwritten the facility.

The loan is divided into a US$500 million tranche evenly split into maturities of three and five years, and a $235 million tranche that also divides into three- and five-year maturities.

Potential lenders have been invited to commit $75 million equivalent or $50 million equivalent. Responses are due in early February.

Of the ASX 200 index shares, Centro Retail Group led the gainers with a rise of 38.8% followed by increases in Centro Properties of 35.2%, in Allco Finance Group of 29.4%, in Babcock & Brown of 20.8%, and in Compass Resource of 16.6%.

Of the index stocks, Perilya Ltd led the decliners with a fall of 5.4% followed by losses in Sims Group Ltd of 4.1%, in Transpacific Industries of 4.1%, in Boart Longyear G of 3.9% and in Austar United of 3.2%.