Modern Mining

ASX-listed Terramin Australia, through its subsidiary, Western Mediterranean Zinc Spa (WMZ), has completed an updated Definitive Feasibility Study (DFS) for the development of the Tala Hamza-Amizour (Tala Hamza) zinc and lead project in Algeria. The DFS indicates that the project – with the potential to produce an average of 129 300 tonnes per anum (t/a) of zinc concentrate and 26 000 t/a of lead concentrate from an underground mining operation – would deliver strong financial returns over a 21-year mine life.

                                 Drilling at the Tala Hamza site (photo: Terramin).

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. This method would have resulted in a large surface depression and increased water management requirements that were deemed by regulators not to be appropriate for the Bejaia area. The changes include optimisation of previous studies, updating the ore reserve, a revised plant layout, removal of the tailings storage facility and replacement with dry stacking, and updated economic analysis.

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 Mt/a capacity process plant (utilised at the rate of 1,32 Mt/a), which can deliver an average of 129 300 t/a of zinc concentrate at 54 per cent Zn (90 per cent recovery) and 26 000 t/a of lead concentrate at 63 per cent Pb (73 per cent recovery). The average C1-cash cost is estimated at US$0,53c/lb and the All-in Sustaining Cost (AISC) (including royalty) at US$0,61/lb.

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 nominal NPV (8 per cent) of US$303 million and an IRR of 14 per cent.

Total pre-production capital for the project is expected to be US$341 million while total LoM capital inclusive of pre-production capital and sustaining capital is estimated at US$486 million.

The Tala Hamza deposit has a mineral resource of 53 Mt (at a cut off of 3,0 per cent Zinc Equivalent (Zn.eq) including an indicated resource of 44,2 Mt.

Commenting on the DFS at the recent Paydirt ‘Africa Down Under’ Conference in Perth, Terramin Australia CEO Richard Taylor said: “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.

“Location is everything with Tala Hamza – proximity to deep water Mediterranean ports, well developed infrastructure, cheap and reliable energy and an educated workforce make 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.”

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Title: Editor
Name: Arthur Tassell
Email: mining@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

Title: Advertising Manager
Name: Bennie Venter
Email: benniev@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

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