Terramin Australia Ltd (ASX: TZN) shares have jumped after the company released a revised mining plan for its Tala Hamza zinc project in Algeria.
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Large, long-term project
The company said in a statement to the ASX on Monday that the revised plan envisaged a 20-year mine life at a production rate of 2 million tonnes of ore per year, producing about 178,000 tonnes of zinc concentrate.
The mine is expected to cost US$415 million to build, with Terramin saying the operating costs were competitive by world standards.
Early works were already underway, with all of the relevant approvals in place, including the mining permit, the company said
Terramin said the most significant change to its mining plans from a previous definitive feasibility study was the increase in the mining rate from 1.32 million tonnes of ore per year to 2 million.
The company also said negotiations were at an advanced stage with respect to the establishment of a "significant debt facility" with a major Algerian Government bank.
The Tala Hamza project had also been registered with the Algerian Investment Promotion Agency, which will provide benefits such as an exemption from corporate tax for up to 7 years, an exemption from sales tax and customs duties during construction, and access to concessional financing support.
Terramin Executive Chair Bruce Sheng said regarding the project:
The updated Mining Study confirms the strong economics of a significantly expanded Tala Hamza Zinc Project, now scaled to 2.0 mtpa throughput. With all major approvals secured and early works already underway, the Project is firmly advancing into development. Tala Hamza benefits from exceptional infrastructure, including close proximity to a deep-water port, reliable and affordable power, and access to a skilled local workforce, positioning it as one of the most compelling zinc-lead development opportunities globally. We are grateful for the continued support of the Algerian Government and our local partners, who remain instrumental in bringing this nationally significant project to life.
Solid cash flow generator
The Tala Hamza project was expected to have a payback period of about four years, and at a mining rate of 2 million tonnes per year, was expected to generate free cash flow of US$2.19 billion.
Terramin shares were 12.9% higher after the release of the news on Monday, at 3.5 cents.
This is not far off the 12-month lows for the shares of 2.5 cents and well shy of the year-high of 7.8 cents.
The company was valued at $74 million at the close of trade on Friday.
