Zinc

[Lone Clone]

Zinc miner Perilya looks deeper and beyond Broken Hill

http://www.mineweb.net/mineweb/view/mineweb/en/page36?oid=20243&sn=Detail

Australiam mid-tier miner, Perilya, already one of the world’s more important zinc producers, is opening a new mine and boosting its exploration activities.
Author: Ross Louthean
Posted: Monday , 30 Apr 2007

ADELAIDE -

One of Australia's high flying mid tier miners Perilya Ltd (ASX: PEM) will be using its growing coffers to more aggressively explore and develop in the Broken Hill region, bring on a new mine in South Australia, lift its search spend elsewhere and consider mergers and acquisitions opportunities, particularly in Australia.

Perilya's chief executive Len Jubber outlined progress and plans at the Paydirt's South Australian Resources & Energy Investment Conference in Adelaide today, and said the company now has $A150 million in cash.

Its strong cash flow from the Broken Hill operations acquired from the asset sales of stressed Pasminco Ltd (later rebuilt as Zinifex Ltd) six years ago should see growth from improved performance there and also from the low capital cost bonanza-zinc Beltana project in South Australia's Flinders Range.

Jubber said that the priority for the early operating years was to pay off the 66% balance owed for the purchase of the Broken Hill mines and infrastructure.

If all the advanced exploration, advanced development and feasibility studies come together then Perilya could within three to five years lift its annual production to about 200,000t of contained zinc. Perilya is already ranked as the 12th largest zinc producer in the world.

He described the situation on slow exploration until now on many good properties to have been embarrassing, but the company was now clear of debt to march forward.

There were now four drill rigs operating in the Broken Hill region and one of the promising regional properties was Henry George (A best recent hole was 8 metres from 105m depth grading 11.3% zinc, 2.5% lead and 40 grams/tonne silver).

The Beltana open cut as the first stage of Perilya's Flinders project has reached the stage where it is down to 70m and this relatively small mine will be developed a further 30m to take out 376,000 tonnes grading 32.6% Zn, of which a large section grades 40%.

It is willamite ore and challenges some conventional smelters and refineries. Jubber told Mineweb that the Flinders project is near the Leigh Creek coalfield so it is close to the railway down to Port Pirie. Beltana ore could be sent to Thailand or China where some Beltana ore from a previous owner has been processed. Beltana could provide Perilya with an internal rate of return of 88%. That IRR could lift to 100% if the low grade (10-20% zinc ore) could be treated by a hydrometallurgical or some other process - an issue being discussed with several parties.

Developments detailed to the conference were:

* The Potosi decline mine, 3 kilometres from the company's North mine at Broken Hill, will hit ore in the September quarter and is set to provide 200,000 tonnes per annum to the Broken Hill concentrator.
* A $5 M feasibility study is advancing on re-opening the North Deeps (including the Fitzpatrick zone) which was shut during flat metal prices back in 1993 and should be completed in the next nine months. This, if found viable, would access major reserves including zones grading up to 25% Zn. Jubber told Mineweb an added advantage from this exercise is that the dewatering will help resolve drought-hit region's shortage of water.
* The second stage of the Flinders project could take in development of the Reliance deposit (355,000t @ 29.5% Zn) and other discoveries, while exploration will build up to focus on 15 targets in this vast exploration licence.
* The Mount Oxide project in the Mt Isa region has a resource of 4 Mt at 2.8% Cu and within the licence area there are several major targets with mineralisation considered to be similar to the Mt Gordon mine to the south. Perilya was contemplating discussions with Indian company Adijya Birla which owns Mt Gordon on the potential to have Mt Oxide and any other ore treated. Mt Oxide is 25 km from Mt Gordon.