Terramin Australia CEO Richard Taylor, is speaking today at 2018 Paydirt ‘Africa Down Under’ Conference in Perth
“Terramin is excited to be able to release details of the Tala Hamza revised DFS. The result is the outcome of steady and patient negotiation with our joint-venture partners. It was important to engage and work consistently with our counterparts to ensure a robust long-life project that will be a flagship project in Algeria,” said Terramin Australia CEO Richard Taylor at the 2018 Paydirt ADU conference in Perth.
“Location is everything with Tala Hamza, proximity to deep water Mediterranean ports, well developed infrastructure, cheap and reliable energy and an educated workforce makes this a potential world class project.”
“Getting the base case project at Tala Hamza permitted opens up optionality for expansion and exploration both within the existing exploration area and further afield in a highly prospective emerging mining country which is looking to diversify from oil and gas.”
Highlights: (Extracted from Terramin’s ASX Release, 29 August, 2018)
· Financial analysis of the project economics, based on metal prices averaging US$1.25/lb zinc (Zn) and US$1.05/lb lead (Pb), indicates the base case project generates a strong financial return, with a post-tax nominal1 NPV (8%) of A$399m (US$303m) and IRR 14%, subject to the material assumptions on page 4;
· Over the 21 year Life of Mine (LoM), the plant is expected to produce an average of 129,300 tonnes per annum of zinc concentrate at 54% zinc (90% recovery) and 26,000 tonnes per annum of lead concentrate at 63% lead (73% recovery), peaking at 153,000 tpa zinc and 36,000 tpa lead concentrate;
· Total pre-production capital for the project is expected to be A$449m2 (US$341m). Total LoM capital inclusive of pre-production capital and sustaining capital is expected to be A$639m (US$486m);
· 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$0.61/lb3;
· The Tala Hamza deposit has a Mineral Resource of 53 Mt (at a cut off of 3.0% Zinc Equivalent (Zn.eq) including an Indicated Resource of 44.2 Mt. Total ore (Material Mined at a project evaluation cut-off grade of 4.4% Zn.eq) is 25.9 Mt at 6.3% Zn and 1.8% Pb with a nominal mine production rate of 1.32Mtpa and an estimated mine life of 21 years (23 years incl. pre-production);
· The project surface footprint has been significantly reduced in size from the 2010 DFS. The land needing to be acquired for surface infrastructure has been minimised, without reducing flexibility for expansion;
· Additional investigations for the DFS included a change in the mining method from block cave to Underhand Drift and Fill (UDF), a geotechnical drilling program, ground subsidence modelling, hydrogeology drilling and modelling, Cemented Paste Backfill (CPB) test work and replacing the tailings dam with a dry-stacked cake storage facility (CSF);
· An Environmental Impact Study (EIS) by an approved Algerian environmental consultancy has been completed and this study supplements previous work by international consultants; and
· Deposit remains open to the east and southeast, allowing the potential to expand production without reducing mine life.
1. Where nominal values are noted, costs and revenues are in 2020 dollars escalated at 2% CPI
2. Unless otherwise noted, values are in real 2020 US dollars, AU$/US$ = 0.76
3. Cost/lb are payable Zn, nett of by-product credits
Executive Summary
Terramin, through its subsidiary, Western Mediterranean Zinc Spa (WMZ), has completed an updated Definitive Feasibility Study (DFS) for the development of the Tala Hamza-Amizour zinc and lead Project (the Project) near Bejaia in northern Algeria. The updated DFS covers a zinc and lead deposit in the area of the Oued Amizour Mining Exploration Permit 6911 (PEM 6911), an area of 122.76 km2 held by WMZ. Exploration Permit 6911 expired 31 January 2018 and is expected to be superseded by the Mining Licence (ML). Although discussions have been active and ongoing, until the ML is approved there can be no assurance that the project will be endorsed by the Algerian government.
The 2018 DFS contains a number of changes to the 2010 DFS undertaken to eliminate, or reduce to an acceptable level, environmental and social concerns with the block cave mining method.
The changes include optimisation of previous studies, updating the Ore Reserve, revised plant layout, removal of the tailings storage facility and replacement with dry stacking, and updated economic analysis.
The changes proposed by WMZ to achieve this include changing the mining and tailings disposal methods. The new mining method, Underhand Drift and Fill (UDF) is a small scale, selective mining method which has a higher associated mining operating cost compared to the original block cave mining method. The adoption of the new mining method increased the mine cut-off grade and reduced mining dilution, overall resulting in a net reduction in minable ore tonnes over the life of mine (LoM).
Updated flowsheets, capital and operating costs, completed in conjunction with engineering company China ENFI Engineering Corp (ENFI), confirm the viability of an underground operation with a 1.4 million tonne per annum capacity process plant (utilised at the rate of 1.32Mtpa), which can deliver an average of 129,300 tpa of zinc concentrate at 54% Zn (90% recovery) and 26,000 tpa of lead concentrate at 63% Pb (73% recovery), at an average C1-cash cost of US$0.53c/lb and All-in Sustaining Cost (AISC) (including royalty) of US$0.61/lb.
Based on the positive Definitive Feasibility Study results and expansion potential, the company is progressing further optimisation studies and permitting in calendar 2018. This should allow the base case project to proceed in conjunction with studies into expansion cases.
This announcement includes certain ‘forward looking statements’. All statements, other than statements of historical fact, are forward looking statements that involve various risks and uncertainties. There can be no assurances that such statements will prove accurate, and actual results and future events could differ materially from those anticipated in such statements. Such information contained herein represents management’s best judgement as of the date hereof based on information currently available. Except for statutory liability which cannot be excluded, each of Terramin, its officers, employees and advisors expressly disclaim any responsibility for the accuracy or completeness of the material contained in this document and exclude all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this statement or any error or omission. The Company does not assume any obligation to update any forward-looking statement. Accordingly no person or entity should place undue reliance on any forward looking statement.
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Eric Whittaker, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Whittaker is employed as the Principal Resource Geologist of Terramin Australia Limited. Mr Whittaker has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Whittaker consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. ---
