Oued Amizour Zinc Project

Profile

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 potential for more discoveries on the project area.

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, abundant water and 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.

Tala Hamza is a significant project with potential to be one of the top ten zinc mines in the world based on annual production. Capital costs for the development will be low compared to other similar sized projects due to proximity of existing infrastructure.

The project is well positioned to provide premium concentrate, 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 all of the costs of the feasibility study on the Tala Hamza deposit until a decision to mine is taken by WMZ.

Status

The Tala Hamza definitive feasibility study (DFS) was completed September 2010 and delivered to our Algerian partners for their review process.  On completion of the review process the Board of WMZ will make the decision to mine and submit the required documentation for the mining lease application. The definitive feasibility study determined a Probable Reserve of 38.1Mt at 4.78% zinc and 1.36% lead contained within a global Measured, Indicated and Inferred Resource of 68.6 million tonnes at 5.7% Pb+Zn containing a Measured and Indicated Resource of 51.1 million tonnes at 6.1% Pb+Zn. 

Results of the Definitive Feasibility Study (DFS)

The DFS was completed in September 2010.  The study concluded that a project can be developed on the Tala Hamza deposit using the block cave mining method for the orebody and conventional processing.  The following points hightlight the outcome of the DFS with further details released to the ASX on the 12th October 2010.

Long life mine: Inital 12 year life.

No sterilisation: The mine design will enable extraction of additional ore depending upon metal prices and operating costs with the potential to extent the mine life.

Low operating costs: Mining costs of US$2.97/t and processing costs of US$9.62/t will place the mine amongst the lowest cost zinc mines in the world.

Capital costs: The pre-production capital for the 4Mtpa mine is US$579 million with a capital intensity of US$3537/t well below the average for 24 other currently proposed zinc projects.

Attractive local infrastructure: The nearby major port city of Bejaia provides key infrastructure required for the project.

High quality products: Low iron and other impurities in the concentrate output will make them desirable products in the concentrate markets.

Favourable market location: The mine is well located to supply European smelters.

Project finance available: A letter of intent from a major Algerian bank at the conclusion of the pre-feasibility study indicates it would be prepared to finance up to 70% of the capital over a 15 year term including the project construction phase.

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JORC Competent Person Statement