Oued Amizour Zinc Project

Profile

The Oued Amizour Zinc Project is 100% owned by Algerian Company Western Mediterranean Zinc Spa (WMZ). Terramin has a 65% shareholding in WMZ, the remaining 35% is held by two Algerian government-owned companies; Enterprise National des Produits Miniers Non-Ferreux et des Substances Utiles Spa (ENOF) (32.5%) and Office National de Recherche Géologique et Miniére (ORGM) (2.5%)

Exploration Permit 5225PE is a 125 square km tenement.  The Project centres on the 68 million tonne Tala Hamza deposit and contains several lead-zinc prospects with the possibility of more discoveries.

Location

The deposit is on the north coast of Algeria on the Mediterranean sea, 15km from the city of Bejaia.

Infrastructure includes an international airport and deep water port. Location benefits include grid power, dam water and relative proximity to European zinc smelters.

Algeria - the largest country on the Mediterranean

Scope

The Oued Amizour permit area covers 125 square kilometres and includes a number of potential prospects for lead-zinc.  The most important is the Tala Hamza deposit which is open at depth and laterally and will be developed first.

Tala Hamza is a significant project with potential to be one of the top ten zinc mines in the world. Capital costs for the development will be low because of proximity to infrastructure.

The project is well positioned to provide premium feedstock, low in contaminants, to European smelters.

The Oued Amizour tenement- click to enlarge the image

Structure

Terramin operates the Oued Amizour Zinc Project through its 65% shareholding in Algerian company, WMZ.

A joint venture agreement with Entreprise Nationale Des Produits Miniers Non Ferreux et des Substances Utiles (ENOF) requires Terramin to fund the Tala Hamza deposit through feasibility to a decision to mine.

Agreements have been reached for the sale of all production from the first stage of mining.

Status

The Tala Hamza feasibility study is now underway following completion of the prefeasibility study in early 2009 which confirmed the project has the advantage of low capital and operating costs. 

The most recent Resource estimate (November  2009) at Tala Hamza gave a Measured and Indicated Resource of 51.1 million tonnes at  6.1% Pb+Zn within a global Measured Indicated and Inferred Resource of 68.6 million tonnes at 5.7% Pb+Zn.

Feasibility Study

Work on the feasibility study is well advanced and mining optimisation studies are assessing opportunities to improve throughput, costs and financial outcomes of the Project.

A startup rate of 2 Mtpa is favoured, however block caving will support production options up to 4Mtpa based on the current Resource.

Prefeasibility study

The prefeasibility study was completed in the first quarter of 2009 and confirms initial capital of US $285 million for a block caving development.  It estimated that a first stage of production 2 million tonnes per annum (tpa) mine will produce 209,000 tpa of zinc concentrate and 43,000 tpa of lead concentrate.  At full production, it is estimated that the mine could produce in excess of 450,000 tpa of zinc and lead concentrates.  Major conclusions and highlights from the prefeasibility were reported to the ASX on 8th April 2009 and can be downloaded by clicking on the link: Tala Hamza Capital Down.

Metallurgy

Metallurgy test work indicates a 53 micron primary grind and a regrind of both lead and zinc rougher concentrates. Zinc recoveries of 90% have been achieved at concentrate grades exceeding 52% Zn with less than 5% Fe and 2% silica.

Visualisation of the Tala Hamza mine

The video shows the possible location of the Tala Hamza mine and provides a visualisation of potential development of the mine and plant.

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JORC Competent Person Statement