Ennex, the Irish exploration company, recorded a loss of $1.31 million (£923,000) last year, compared to a loss of $5.17 million in 1996, the firm said yesterday.

The company said the loss included "a $900,000 write-down of the carrying value of marketable securities", and reflected higher spending due to the increased level of corporate activity and the cost of studies of zinc opportunities around the world.

In a letter to shareholders, Ennex's chairman, Mr Brian Cusack, said zinc was the focus of the company's development and exploration strategy. Ennex was now targeting projects with higher grades and which benefit from being at the lower end of the cost curve, he said.

He said the four million tonne zinc oxide deposit at Shaimerden, in north-west Kazakhstan, fell into this category. Last December, Ennex shareholders approved the acquisition of Zinc Corporation of Kazakhstan, which holds a 95 per cent interest in the deposit.

"The project is designed so that construction can begin in the summer of 1999 and continue through the winter," Mr Cusack said. "It is the objective that the first zinc ingot will be produced in 2001."

He added that Ennex would not become dependent on this one project and would continue to seek zinc opportunities in other parts of the world.