Overview
- A large Mineral Resource of 53.0 million tonnes @ 5.3% zinc and 1.3% lead which supports a 20+ year mining project1. A Definitive Feasibility Study was completed in 2018.
- The project is fully permitted with all environmental approvals in place and, with the land acquisition being recently completed and the signing of the EPC contract, early construction has commenced.
- The Tala Hamza Zinc Project is owned by the Bejaia Zinc & Lead Spa (BZL), a joint venture vehicle in which Terramin holds a 49% shareholding with the remaining 51% held by two Algerian government-owned companies: Enterprise Nationale des Produits Miniers Non-Ferreux et des Substances Utiles Spa (ENOF) (48.5%) and Office National de Recherche Géologique et Minière (ORGM) (2.5%). Terramin retains management right over the project
- Extensive established infrastructure in place with attractive low power and fuel costs.
- The project has the potential to be in the top ten largest zinc mines in the world.
1 ASX announcement 29 August 2018 – Tala Hamza Resources and Reserves Statement
Location
- The Project is located in Algeria on the Mediterranean Sea, 15km from the regional city of Béjaia.
- The city of Béjaia provides extensive infrastructure including an international airport and deep water port.
- Location benefits include local workforce, grid power, abundant water and proximity to European zinc smelters.
Definitive Feasibility Study
A Definitive Feasibility Study (ASX announcement 29 August 2018 – Tala Hamza Feasibility Study) in respect of Tala Hamza was completed in mid-2018, which indicated the following key statistics:
- It will produce an average of 129,300 tpa of zinc concentrate and 26,000 tpa of lead concentrate over a 21-year mine life, peaking at 153,000 tpa zinc and 36,000 tpa lead concentrate from the mining and processing of an average of 1.32 mtpa of ore;
- 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:
- Based on metal prices averaging US$1.25/lb zinc and US$1.05/lb lead, the project generates a strong financial return, with a post-tax nominal NPV (8%) of US$303m;
- Total pre-production capital for the project is expected to be US$341m;
- 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/lb.
1 ASX announcement 29 August 2018 – Tala Hamza Feasibility Study
The deposit remains open to the east and southeast, allowing the potential to expand production without reducing mine life.
BZL as project developer is entitled to significant financial assistance from the Algerian Government including:
- 10-year exemption from company tax
- Exemption from VAT and customs duties
- Long term low-interest rate loans from Algerian Government banks
Engineering, Procurement, & Construction Contract
In 2020, Terramin completed an optimisation study in respect of the Tala Hamza Zinc Project that considered an increase in the mining and processing to an average of 2.0 mtpa of ore (up from 1.32 mtpa). This study indicated that project returns can be further enhanced.
In March 2022, the joint venture partners endorsed the optimisation study and agreed to advance the Tala Hamza Zinc Project towards development (‘Decision to Mine’) and in May 2023 the Algerian mining regulator issued the Mining Permit for Tala Hamza.
The issue of the Mining Permit means that Tala Hamza has satisfied all Algerian regulatory, financial and environmental requirements and that it can now proceed towards development. In collaboration with our Algerian partners, this Mining Permit will allow for the mining and processing of 2.0 mtpa of ore under the optimisation study instead of the 1.3 mtpa anticipated in the 2018 DFS, indicating that project returns will be enhanced over the anticipated 20+ year mine life. The Mining Permit encompasses all the area of land required for operation of the mine including mining, processing, haul roads, ore stockpiles, tailings dams, concentrate handling and maintenance and administration.
In October 2024, the Algerian Government completed the acquisition of 234 hectares of land which covers the footprint of the Mining Permit at a total cost of approximately US$30m. This land is now accessible for BZL to commence construction.
In November 2024, BZL signed an Engineering, Procurement, and Construction Contract (EPC Contract) with Sinosteel Equipment & Engineering Co. Ltd. (Sinosteel MECC) for the construction project.
The scope of the EPC Contract covers the construction of the following:
- 2.0 mtpa process plant
- 2.0 mtpa underground mine
- Backfill plant
- General civil works
- Dry stack tailing storage facility
- Water ponds and wastewater treatment plant
- Road works (including access road) within the mining permit
- Electrical supply infrastructure within mining permit
- Various workshops, offices and laboratory
- Security fencing
The EPC Contract has been signed off at a value of US$336 million and the funding arrangements for the EPC Contract have also been agreed and formalised for the next 18 months. It is anticipated that construction will commence in the coming weeks.
Sinosteel MECC is an internationally renowned engineering technology and service company with technological innovation as the guide, with engineering general contracting and professional services as its main business. Its business integrates domestic and overseas EPC projects, including mining, metallurgy, power energy and mineral processing. Sinosteel MECC has ranked in the ENR TOP 250 International Contractors & Global Contractors for 17 consecutive years. Sinosteel MECC has executed overseas projects of more than US$17.02 billion since 1999, covering 50+ countries and regions. The total contract value performed in Algeria has been over US$4 billion since 2015, including mining and beneficiation projects and green raw materials projects.
BZL continues work closely with the Algerian Government in respect of the provision of key infrastructure to the Project (at the Algerian Government cost) including:
- Berth at the Port of Bejaia (construction underway)
- Provision of HV power to Mining Permit (in design)
- Truck access ramps onto highway (in design)
- Bridge for mine traffic over local road (in design)
