Oz Minerals, the merged Oxiana and Zinifex, has reassured shareholders of the company’s fundamentals and prospects after a significant drop in the group’s share price.

The share price of the merged company - which legally was Oxiana acquiring the Zinifex business - has dropped more than 67% from $3.90, when the merger was announced in March, to a low of $1.27 earlier this month.

Chairman Barry Cusack and chief executive Andrew Michelmore said in a letter to shareholders today Oz Minerals’ investors must keep in mind the company’s achievements and opportunities.

“We understand that some aspects of our financial results have concerned some investors, but we also believe that many investors have lost sight of Oz Minerals substantial achievements and its undoubted opportunities,” the letter said.

Oz Minerals is the world’s second largest zinc producer, with significant exposure to copper, lead, gold, silver and nickel, with four operations in Australia and Asia.

Rumours of delays to its Prominent Hill copper and gold mine in South Australia were “simply not true” and the project was on track for commissioning in early October, they said.

Goldman Sachs JBWere said in a September 18 client note that the market needed to be convinced on a number of fronts including that Oz Minerals’ zinc assets could generate a profit at current low prices.

The note predicted it would take three to six months for Oz Minerals to “turn momentum around”, with key catalysts being the start-up of Prominent Hill, a value adding acquisition and a rebound in the zinc price.

Oz Minerals said today the outlook demand for all its commodities remained “strong” and it was “very confident” of ongoing growth in demand for many basic commodities.

Mr Cusack and Mr Michelmore said nothing detrimental had happened to Oz Minerals’ assets since the merger and they urged shareholders “not to lose sight of this fact”.

“We are very aware that Oz Minerals recent share price weakness has had a devastating effect on many of our shareholders,” the letter said.

Oz Minerals shares had gained eight cents, or 5%, to $1.68 in late trading.