Ennex International has successfully completed a feasibility study for its mine and zinc refinery - with an annual capacity of 100,000 tonnes of metal per annum - in Kazakhstan.
The study, Ennex said, confirms that the Shaimerden ore is amenable to processing, using technology designed by Tecnicas Reunidas and Union Miniere. Ennex is now negotiating a mining lease with the Kazakhstan government and a decision is imminent, said managing director, Mr Christian Schaffalitzky
It also confirmed that the project, which is 95 per cent owned by Ennex, will be one of the lowest cost zinc producers in the world. Ennex has quantified the cash operating cost at 19 US cents (17.48 cents) per pound compared with an industry average of over 40 US cents (36.80 cents).
The deposit contains a mineable reserve in the proven and probable categories of 4.28 million tonnes, at a grade of 20.9 per cent zinc. The capital cost for the development and construction of the project is $285 million (€262 million). The net cash flow is estimated at $303 million (€279 million). The net present value, using a 5 per cent discount factor, is $152 million (€140 million).
The study, Ennex said, envisages a 27 month construction period, followed by ten years of metal production. In addition, when the Shaimerden deposit is exhausted, the refinery plant can be used to process ore from other sources.
Ennex is now exploring the options to bring the project forward. It would prefer a joint venture with a major group. However, it would not rule out an outright sale. The object is to "get value for shareholders", Mr Schaffalitzky, said, and Ennex would not contemplate less than $30 million (€28 million) to $40 million (€37 million).
Ennex has appointed Endeavour Financial Corporation of Vancouver to assist the company with arranging project debt finance.
