Tala Hamza Zinc Project

The Tala Hamza Zinc Project (“Project’) is owned by Western Mediterranean Zinc Spa (WMZ), a joint venture vehicle between Terramin and Enterprise Nationale des Produits Miniers Non-Ferreux et des Substances Utiles Spa (ENOF). Terramin holds a 49% shareholding in WMZ, with the remaining 51% held by two Algerian government-owned companies: (48.5%) and Office National de Recherche Géologique et Minière (ORGM) (2.5%).

The Project is located on the Mediterranean Sea, 15km from the regional city of Béjaia. The city of Béjaia provides extensive infrastructure including an international airport and deep water port. Location benefits include grid power, abundant water and proximity to European zinc smelters.

The Tala Hamza deposit holds a Resource of 53Mt (Measured, Indicated and Inferred) at 5.3% zinc and 1.3% lead at a cut off grade of 2.5% zinc equivalent (inclusive of Probable Reserve) (ASX announcement 29 August 2018 – Tala Hamza Resources and Reserves Statement). The deposit is situated within the Oued Amizour permit area that covers 125 square kilometres and includes a number of potential additional prospects for lead-zinc and copper.

The Project is significant with potential to be one of the top ten zinc producers in the world. The Project is well positioned to provide premium zinc and lead concentrate, low in contaminants.

A Definitive Feasibility Study (ASX announcement 29 August 2018 - Tala Hamza Feasibility Study) in respect of Tala Hamza was completed in mid-2018, which indicated the following key statistics:

• It will produce an average of 129,300 tpa of zinc concentrate and 26,000 tpa of lead concentrate over a 21-year mine life, peaking at 153,000 tpa zinc and 36,000 tpa lead concentrate from the mining and processing of an average of 1.32 mtpa of ore;

• Based on metal prices averaging US$1.25/lb zinc and US$1.05/lb lead, the project generates a strong financial return, with a post-tax nominal NPV (8%) of US$303m;

• Total pre-production capital for the project is expected to be US$341m;

• Operating costs are expected to be competitive by world standards. The C1 cash cost, including all operating costs and excluding royalties, rehabilitation and capital expenditure, is estimated to be US$0.53/lb payable Zn with an All-in Sustaining Cost (AISC) of US$0.61/lb.

The deposit remains open to the east and southeast, allowing the potential to expand production without reducing mine life.

In 2020, Terramin completed an optimisation study in respect of the Project that considered an increase in the mining and processing to an average of 2.0 mtpa of ore (up from 1.32 mtpa). This study indicated that project returns can be further enhanced.

In March 2022, the joint venture partners endorsed the optimisation study and agreed to advance the Project towards development (‘Decision to Mine’) and in May 2023 the Algerian mining regulator issued the Mining Permit for Tala Hamza.

The issue of the Mining Permit means that Tala Hamza has satisfied all Algerian regulatory, financial and environmental requirements and that it can now proceed towards development. In collaboration with our Algerian partners, this Mining Permit will allow for the mining and processing of 2.0mtpa of ore under the optimisation study instead of the 1.3mtpa anticipated in the 2018 DFS, indicating that project returns will be enhanced over the anticipated 20+ year mine life.  The Mining Permit encompasses all the area of land required for operation of the mine including mining, processing, haul roads, ore stockpiles, tailings dams, concentrate handling and maintenance and administration.

Following the issue of the Mining Permit, Terramin has commenced discussions with various parties regarding the funding and construction of the project.

The process of acquiring the freehold land required for the project is well underway with Terramin closely liaising with the Algerian government.

The project team have also continued discussions with government authorities regarding the provision of power and access to the highway which is currently under construction.