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Terramin Australia Ltd has revised the capital estimate down by 25% to $US266 million ($A376 million) for a sub-level caving development at the Tala Hamza zinc project in Algeria, in a prefeasibility study by Bateman Engineering, Golder and Terramin.
Operating costs are estimated at $US30 per tonne milled for sub-level caving and $US25 per tonne for block caving.
Life of mine C1 cash costs are estimated at US42c per pound, payable zinc after allowance for lead by products, based on long term price forecasts of US80c per pound of zinc and US60c per pound of lead with a zinc treatment charge of $US229 per dmt.
C1 cash costs under current spot prices and treatment charges are estimated at US38c per pound.
Life of mine is estimated at 13 years at production of 24.07 million tonnes per year.
There is considerable upside potential to add to reserves and resources.
Executive chairman Dr Kevin Moriarty said Tala Hamza is proving to be a low cost, world class project that is getting cheaper to mine the more we study it. The study has concluded even at the current low commodity prices the deposit can be developed successfully as a technically and financially viable long term mine.
The company has received expressions of interest to finance the project from within and outside Algeria, while offtake agreements for 240,000tpa of concentrate further underpin financing.
Terramin is aiming to start up production in late 2011 to replace production lost as older and less cost efficient mines close.
as for angas its a 7 year mine life
.
Probable Reserves of 2.41 million tonnes at 9.7% Pb+Zn are sufficient for an initial seven year operation. Situated in prospective ground in an historical mining belt, strong exploration prospects on the Company's tenements could potentially lead to an increase in production and an extension of mine life.
Location The Angas Zinc Mine is located 2km from the town of Strathalbyn, 60km from Adelaide, the capital city of South Australia, and 70km from Port Adelaide.
Aerial view of Angas Zinc Mine- click to enlarge the image
Status The 400,000 tonnes per annum (tpa) operation was commissioned in July 2008 at a cost of A$64.2 million with low start up costs aided by the proximity of infrastructure such as mains power.
Scope Ore Reserves are 2.41 million tonnes grading 9.7% Pb+Zn; 31 g/t Ag and 0.5 g/t Au sufficient for an initial 7 year operation. Additional Inferred and Indicated Resources total 0.59 million tonnes at 7.0% Pb + Zn.
The mine has excellent potential for further reserves and resources and exploration drilling is planned to test these targets. Terramin also has 1,160 square km of exploration titles in the area and an active exploration programme.
The mine will treat 400,000 tonnes per annum(tpa) of ore to produce 60,000 tpa zinc concentrate at a grade of 52% Zn; and 24,000 tpa lead-copper-gold-silver concentrate at a grade of 47% Pb, 4% Cu, 445 g/t Ag and 7 g/t Au.
Structure Terramin has a life of mine offtake agreement with RBS Sempra Metals & Concentrates LLC for all zinc concentrate production and a 5 year offtake agreement with Nyrstar Port Pirie Pty Ltd in respect of the lead concentrate.
TZN Price at posting:
62.0¢ Sentiment: Buy Disclosure: Held
