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Premium zinc product for Terramin

Posted: 18 Apr 2007

Terramin Australia Limited today reported that the first metallurgical testing of the Tala Hamza zinc deposit indicates the zinc project has the potential to generate good recoveries of premium grade concentrate.

Executive Chairman, Dr Kevin Moriarty, said the company was “very encouraged” by the results of the first metallurgical testwork completed this week by the Optimet Laboratories in Adelaide.

“The results from the testing of ore from the TH002 drillhole at Tala Hamza exceeded expectations, particularly in the quality and recovery of the concentrates,” Dr Moriarty said.

“Good recoveries were achieved and the concentrate is high in zinc and low in iron and silica,” he said.

“Importantly, the zinc testwork was performed using a medium ore grind and a fairly standard reagent suite for flotation. This is encouraging with respect to operating costs and, of course, the premium nature of the concentrates.”

Drill hole TH002 intersected 184 metres of mineralisation grading 6.58 per cent zinc + lead, including 64.0 metres assaying 10.69 per cent zinc and 2.25 per cent lead.

Terramin is continuing its drilling programme on the Tala Hamza deposit which is part of the company’s Oued Amizour project on the Mediterranean coast of Algeria.

The assays for drillholes TH003 and TH004 have also been announced. TH004 is the first of two holes drilled by Terramin to duplicate drilling conducted in the 1990’s by the Algerian Government’s exploration arm, ORGM.

Core from drillhole TH006, the second of the duplicated holes, is in Adelaide being prepared for assay following which all previous results – from Terramin and ORGM drilling – will be assessed for inclusion in a JORC standard resource estimate scheduled for May.

Drilling is continuing at the site, with the ninth hole just started. The rigs have moved to a 12 hour shift and will shortly commence 24 hour drilling. Dr Moriarty said Terramin’s cash flow model (see page 3) for Tala Hamza at current metal prices indicated annual revenue of between US$265 million and US$508 million at mining and treatment rates of 1.2 million tonnes and 3 million tonnes of ore per year, respectively.

A 1.2 million tonne operation would produce 178,000 tonnes of zinc concentrate (at a grade of 55 per cent) and 45,000 tonnes of lead-silver concentrate (at a grade of 65 per cent).

“Terramin’s cash flow modelling updates an earlier model that was based on conservative metallurgical assumptions and this latest analysis reflects the results achieved from our recent testwork and assaying,” Dr Moriarty said.

“These figures are based on current metal prices and assume that the project has positive feasibility and progresses to production. The actual outcome depends on many factors that cannot be predicted with certainty, so these are a guide to the potential outcome only if current conditions continue to apply. However, the model indicates the project would produce substantial cash flows at considerably lower metal prices,” he said.



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