Australian Miner Targets Iranian Zinc Deposit Australian miner,...

Australian Miner Targets Iranian Zinc Deposit


Australian miner, Union Resources Ltd is targeting a controlling share in the massive Mehdiabad zinc deposit in central Iran, by greater investment in the up-front costs of establishing the project.

The Managing Director of Union Resources, Mr Rob Murdoch, said the project is expected to generate $US15 billion in sales over 30 years, mainly of zinc at an estimated production cost of US$600 per tonne, as well as lead and silver concentrates.

“As the operating cost is only half current revenues the project is expected to provide a very substantial cash flow to the company for a long time,” Mr Murdoch said.

According to Mr Murdoch the company and its private Iranian partner Itok GmbH, were spending a total of $US 10 million to earn a 50% combined interest in the project and the shareholding of local operating company Mehdiabad Zinc Company.

“Union Resources is providing the bulk of the funds and will have the bulk of the equity as a result.”

Union Resources' total project expenditure to the end of March 2005 was $US 6.25 million. The company expects its equity in the project to exceed 40% by the end of the Bankable Feasibility Study, which is now well underway, and the completion of the $US 10 million Earn-in also expected to be completed at the same time.

After the Bankable Feasibility Study the parties then have to contribute pro rata or dilute their percentage interest.

By continued differential spending relative to the other parties, the agreements allow Union Resources to ultimately hold a substantial majority position in the project.

- 02 May 2005

------------------------------------

http://www.minebox.com/story.asp?articleId=5750