Ennex International, the Irish mining company, has announced an agreement with Union Miniere and Tecnicas Reunidas to negotiate the terms of a lump-sum turn key contract on the company's Shaimerden zinc project in Kazakhstan.

The international metals and engineering companies have formed a special-purpose joint venture to produce an engineering study and submit a lump-sum turn key for the construction of the mine and refinery with certain performance, process and cost guarantees.

Ennex chairman Mr Brian Cusack said in the company's interim report that the deal, for the six-month period to June 30th, 2000, was a very significant vote of confidence in the Shaimerden project.

"The attractiveness of the project, and hence its commercial value, will be enhanced," Mr Cusack stated. "These developments will also greatly assist in securing project finance."

Ennex also reiterates its confidence that it can achieve significant capital and operating cost reductions, which the company believes will confirm Shaimerden as one of the lowest-cost zinc producers in the world.

The company announced losses of $389,000 (€360,185) for the six months to June 30th this year, compared with a loss of $296,000 in the same period last year, while working capital amounted to $1.7 million on June 30th.

The interim report is also positive about the prospects for the company's exploration project at Rathdowney, with all the drill holes to date finding zinc and lead mineralisation, either of low grade or close to economic grade.