Terramin Australia (ASX:TZN) looks set to build its zinc mine in northern Algeria. The Tala Hamza zinc and lead project is located near Bejaia and will be the world's first block-cave zinc mine.
A feasibility study was released by the Adelaide based company in which it said that the mine had the potential to be amongst the six largest zinc mines in the world.
Terramin executive chairman Kevin Moriarty said that the study showed the mine to be a very low cost operation of US$ 2.97 per tonne and processing costs of US$9.62 per tonne. This would make it very competitive compared to many other proposed and operational projects.
The probable ore reserve is estimated at 38.1 million tonnes and so the block cave mine will have an initial mine life of 12 years. The project will be a joint venture comprising Entreprise Nationale des Produits Miniers Non-Ferreux et des Substances Utiles Spa (ENOF) (32.5%), Office National de Recherche Géologique et Minière (ORGM) (2.5%) and Terramin (65%).
The Tala Hamza mine will employ approximately 620 people once it is in operation including about 568 Algerian nationals. Construction of the mine would take around 57 months. Depending on project financing the final decision to go ahead with the mine will be made early next year.
Terramin has already had discussions with several banks regarding financing of the project. Previous discussions with a local Algerian bank after the conclusion of the PFS indicated that it was prepared to finance the project. The indicative terms offered by the Algerian bank included financing up to 70% of the projected capital cost for a term of up to 15 years.