With UCL having moved towards Iran's preferred structure ie Govt...

With UCL having moved towards Iran's preferred structure ie Govt controls the mine(through Imidro) and MZC runs the plant resolution is highly probable imo. However that is conditional on the pricing transfer mechanisms and quality of supply. Plainly success of the plant depends pretty much solely upon continuity of ore supply and fair pricing - there's no where else nearby to get ore!

Under this scenario, mine construction and funding would be the govt's responsibility which should be beneficial for MZC as they'll be funding plant. The likely processing approach will commence with heap leaching which had an estimated capex of US $100 mill max. I think this would probably be less now due to the global financial crisis having had a significant dampening effect on cost factors. UCL would be responsible for raising likely up to around $50 mill of that - a large task in this environment but not nearly so monumental as that of the original route.

This approach reduces the potential profitability for MZC as miner and processor however should still be lucrative if pricing is at a fair level and supply reliable. Being a polymetallic, albeit complex, deposit there are plenty of credits which have, in the past, seen Mehdiabad rated a lowest quartile potential cost producer. Assuming this flows through fairly to MZC there should be a decent margin in it for them and at minimum 100k tpa production of zinc for maybe 25-30 years a healthy company making cash flow.

Risks:
*Can the Iranians be trusted to stick with any agreement?
*Dilution - with the impact the market has had on our market cap we small shareholders will not be able to avoid significant dilution. even if able to participate in capital raising it is unlikely imo that most shareholders would be able to take sufficient to preserve their percentage holdings. Still there would also be opportunity to let big players carry the weight and pick up very cheap shares on market.