Terramin Australia Limited (ASX: TZN) today released its 2nd Quarter Report 2010. The summary from Kevin Moriarty Executive Chairman shows Angas production down due to short term issues including lower grades, however drilling is underway to extend mine life.
Over in Algeria, the Tala Hamza Definitive Feasibility Study (DFS) is reported to be in the final stages, with exploration drilling indicating further upside potential at the zinc deposit particularly to the south where recent drilling showed the deposit to be thicker with higher grades expected. The deposit is currently open and untested in the south.
The DFS focussed on the mine design and the block cave schedule. Terramin is confident that the choice of block cave mining will allow the company to take advantage of this low cost underground mining method.
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The quarter saw lower production and resulting higher unit costs from Angas Zinc Mine owing to short term factors. Whilst production was forecast to be lower at this stage of the mine's development, these factors were compounded by lower than forecast stope grades. Management is aiming to achieve the full year forecast production despite the weak June quarter. Angas revenue has not been exposed to the current lower zinc prices because during the year as the company locked in a zinc price that will average US$2,304/t for all zinc concentrate shipments until October.
Drilling was started on the Angas Mining Lease to extend mine life. Four shallow holes are now complete with three intersecting mineralisation. Most of the targets require deeper drilling to test for other extensions of the known lenses. The results of this initial program will be available over the coming months.
Terramin's exploration has already delivered promising results this year, with encouraging intersections of copper and gold in South Australia, and surface outcrops of poly-metallic mineralisation near Tala Hamza in Algeria. Both of these are near existing and planned operations, and offer a potential diversification of the company's metal production.