news

Thursday, 22 February 2007
Australia's newest zinc producer
The past six months has been a period of rapid development for Intec, culminating when it became Australia's latest zinc producer.
By James Moses, RESOURCESTOCKS*.

With its 50:50 joint venture partner Polymetals, Intec has re-commenced production of bulk zinc concentrate from the Intec Hellyer Mill in north western Tasmania.

The rapid transition to production has been aided by $6 million contributed by Polymetals to cover start-up costs, along with the well maintained status of the Mill and the readily available source of feedstock from the tailings dam.

Intec and Polymetals have off-take agreements with a number of Chinese smelters and are expecting their first shipment of zinc concentrate to leave the Tasmanian port of Burnie by the end of the year.

Intec managing director and chief executive Philip Wood explained that the company was able to leverage off the current world shortage in zinc concentrate to secure favourable terms for its off-take agreements.

"Changes in the 2007 Asian Benchmark terms should be even more favourable for us," he said.

"Our EBITDA at current zinc prices, that is our free cash flows, is expected to be in excess of $60 million for the joint venture partners combined."

The joint venture with Polymetals will conclude after four years or after 6 million tonnes of tailings are processed - whichever event comes first.

"It is a good deal for Polymetals and they are good operators, so we are happy to see them share in the benefits with us," Wood told RESOURCESTOCKS.