Oued Amizour is the big picture

With a producing asset in the Angas zinc mine in South Australia, Terramin Australia Ltd is now developing into a global company with its Oued Amizour zinc project in Algeria .

Executive chairman Kevin Moriarty said the company had grown “quite significantly” since listing on the ASX in 2003. He said it now had more than 3,200 shareholders, about 100 million shares on issue and had arrived at its current status through financing arrangements – particularly with Sempra Metals, which funded the studies at Angas and was now doing the same in Algeria .

“We have, in terms of our share of the zinc and lead metal resources in the projects, just under 6 billion Ib”, Moriarty said.

“Given zinc is selling for a bit more than $ 1/Ib and lead for considerably more than that – it's not hard to see where the value in the company lies in the future”.

“Our first project and the one we are very proud of here in South Australia (Angas) is in Australia 's first mining belt. I don't think many people quite realise that metal mining began here in 1845” .

“We have more than 1,000sq km and there are many old mines in the belt, but it has really been underexplored and we have a major programme under way right now”.

Moriarty pointed out that the processing plant at Angas was not capacity constrained, which would mean future discoveries in the region could be treated by the Angus infrastructure. The plant was almost complete at the time of the conference, with a scheduled handover at the end of May.

Terramin has invested $ 100 million in Angas which is projected to inject about $ 30 million pa into the local economy.

“We anticipate there will be several more of these mines over the next few years as our geologists continue to explore the region. We are spending about $ 2.5 million this year on exploration in the area and immediately around the mine”.

“The other advantage of the project is when the first lead concentrates are produced, they will be able to be put in the truck and shipped straight to Port Pirie, about 200km to the north, which means our cash flow will begin virtually immediately”.

The zinc will be shipped through Port Adelaide initially to Korea and Sempra Metals have agreed to take full production, alleviating any off-take concerns. Terramin also has good exposure to the Menninnie Dam zinc-lead-silver project through its partnership with Zinifex Ltd, which has just completed its $ 8 million earn-in to the project.

An initial resource of just under 4mt has been defined at Menninnie Dam in the central area of the deposit, but there were a lot of untested IP anomalies elsewhere on the deposit, which were being systematically drilled.

However, it was Oued Amizour, according to Moriarty, that would be the company-maker for Terramin.

“There's no doubt about this project, it's on the coast of North Africa just below Spain , close the world's largest zinc refinery – won- derfully situated”.

“Terramin invest in projects that are advanced and close to infrastructure. We do this because we want to minimise the capital and operating costs”.

“Particularly with a bulk commodity like zinc, if the price falls – like it does periodically – you want to be able to maintain profitable production”.

Moriarty said the drilling intersections to date were remarkable and the currently returning widths exceeding 150m – and up to as much as 280m – of significant zinc-lead mineralisation.

“Every hole has some higt grade, ranging from 68m @ 20% to 123m @ 12%, so this is a very significant resource and will be a very significant mine”.

The Tala Hamza deposit, within Oued Amizour, currently has an inferred resource of 55mt @ 5% zinc and 1.2% lead based on 30 historic holes and 12 Terramin follow-up holes.

“We have been increasing the resources and grade – and the confidence in the resource – by achieving better core recoveries. Historically they were getting 76% recovery and we are getting almost 100%”.

“We are targeting an indicated resource to feed into the pre-feasibility study completion in the later half of this year”.

Michael Cairnduff
Australia 's Paydirt
June 2008