PAGE 1 of 3 PERILYA LIMITED Thursday 22 March 2007 Beltana Zinc Mine Commences Ahead of Schedule and Under Budget Perilya Limited (ASX:PEM) announced today that mining had commenced ahead of schedule and under budget at its 100 per cent owned Beltana high grade zinc mine in South Australia. The Beltana mine is the first phase of the Flinders Project and will involve direct shipment of high grade zinc oxide ore through Port Pirie to smelters in Asia. The first shipment is expected early in 2008 with sales continuing over a two to three year period. Contained zinc sales for the 2007/2008 financial year are forecast at 15,000 tonnes increasing to 20,000 tonnes in subsequent years. Development of the first phase of the Flinders project was approved by the Board based on favourable returns generated by the mining and direct shipment of 150,000 tonnes of high grade (38%) zinc oxide ore (57,000 tonnes of contained zinc) from the Beltana mine. The Feasibility Study showed a pre-tax net cash flow of $50.6 million (assuming an average US$1.25 per pound zinc price and US$0.78 exchange rate) with an IRR of 84 percent. A US$0.10 per pound change in the zinc price has a A$9 million impact on the pre tax cashflows of the Beltana project. Within the past six months the company has achieved the following milestones: Month of Completion Milestone December 2006 Completed the feasibility study February 2007 Recruited the operational management team March 2007 Completed mine permitting Awarded the mining and crushing contracts Mobilised the mining contractor to site Established site facilities Commenced mining operations Perilya’s chief executive officer, Len Jubber, said that it was pleasing to commence mining ahead of schedule and under budget, particularly in the current high development cost environment. “The early start and short lead time to ore mining will enable Perilya to take full advantage of the current high price and tight zinc concentrate market environment,” he said. “Potential customers have indicated an appetite for increased shipments of the high grade ore, possibly allowing for the entire product to be sold within two years, rather than three years as assumed in the Feasibility Study. The economics of the mine would be enhanced considerably should the compressed shipping schedule eventuate.” “A potential market has also been identified for 392,000 tonnes (110,000 tonnes of contained zinc) of an intermediate grade material that could be produced by blending the high grade ore with the less marketable lower grade material. Although discussions with possible customers are only in the preliminary stage, this would further increase the return from the mine. To facilitate this opportunity, all of this material grading between 14 and 26 per cent zinc will be stockpiled separately on site at no additional cost,” he added. The Beltana mine is located 520 kilometres north of Adelaide in the Flinders Ranges of South Australia. Development will comprise a twelve month open cut mining and on-site crushing program. Most of the mine infrastructure is already in place and the mine development will be funded internally. Optimisation work to reduce costs and increase efficiencies, including substituting road transport to Port Pirie with rail transport, is continuing. Flinders Project – Stage 1 separate stockpiling creates blending opportunities Beltana – First Blast PAGE 2 of 3 PERILYA LIMITED Beltana – Crushing roadbase Beltana - Resource infill drilling Beltana – Commencement of mining operations Beltana – Mining infrastructure established For further information: Investors: Len Jubber Media: Peter Eggleston Chief Executive Officer General Manager Sustainable Development Phone: +61 8 6210 2000 Background to Perilya Perilya Limited is a leading Australian base metal mining and exploration company. Perilya owns and operates the iconic Broken Hill zinc, lead and silver mine in New South Wales, Australia and the Beltana high grade zinc mine in South Australia. The company is strengthening its project pipeline with an exploration decline at the Potosi deposit in Broken Hill, exploration at the Mount Oxide copper deposit in Queensland and the Flinders Project in South Australia. Perilya has a strong balance sheet with low debt levels and is actively seeking growth opportunities through acquisition. For more details, visit www.perilya.com.au PAGE 3 of 3 PERILYA LIMITED
PEM Price at posting:
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