Here's the article, courtesy of Andico on advfn. (MB) It won't...

Here's the article, courtesy of Andico on advfn.

(MB) It won't be mined till '07, but Aim swamped with offers for zinc

By Natalia Kassakovich, Wednesday, May 10 2006, 15:52

London, May 10 (Metal Bulletin) -- The first zinc concentrate from the Aim Resources' Perkoa project in Burkina Faso may not be mined before the end of next year but the company is already swamped with offers from potential offtake partners, according to a senior executive at the company.
"There is a ton of interest for the material, many want to get involved. Some companies are offering funding for the project in return for concentrate," Marc Flory, Aim Resources md, told MB.
With Mitsui, Korea Zinc, Boliden, Xstrata and many others hoping to lay hands on the concentrate in an increasingly tight market, AIM Resources can afford to be picky, he claimed.
"Anyone would buy concentrate at the moment. You can get a very good price pretty much anywhere. But our primary targets are Spain, Brazil and Russia, largely due to their location," Flory said.
The company's board and management will be reviewing the financing and concentrate offtake proposals this month with a view to finalising negotiations by June. It is likely to pick between two and four partners among traders and smelters, Flory said.
The zinc price at the London Metal Exchange recorded an all-time high earlier this month, trading close to $3,500 per tonne, having more than doubled since May last year.
With fundamentals holding strong, there is nothing to prevent it from going to $5,000 per tonne within the next six months, Flory suggested. Whether such a level is sustainable for long is a different matter, but "I'd rather [the price] fell from $5,000 than $1,000 per tonne", he said.
"In contrast to copper, the zinc price on the LME has been rising on pure fundamentals so it is quite healthy. Do I see anything left on the side? Absolutely!" he said.
Soaring demand from eastern Asia and China in particular has driven the zinc price higher but production hitches have also played a big part.
"The last proper zinc smelter was built in Australia around five or six years ago. There are not enough mining specialists; we lack machinery; environmental control in Europe is becoming more and more stringent. All this prevents miners from getting production on line," he said.
"You can wait for a simple thing like tires for a year or two."
Once production is forced offline, getting it back in operation is next to impossible as it costs around $500 million to re-open a smelter, he said.
Aim Resources plans to spend around $80-90 million on its zinc project in Burkina Faso.
Investment will come from the equity market; loans against offtake from smelters and traders; and debt financing.
The deposit is believed to hold 6.72 million tonnes of concentrate, equating to over 900,000 tonnes of contained zinc metal.
It is about to appoint an engineer and start some "soft construction" on the site, with first concentrate to be mined by the end of 2007, according to Flory.
Two alternative routes have been reviewed for the future deliveries - the rail line passing through the neighbouring country of Cote D'Ivoire to the Port of Abidjan and the road transport alternatives passing through Ghana to port facilities at Tema.
Aim Resources is listed in London and Australia and has market capitalisation of around A$100 million ($77 million).