Shaimerden, the zinc oxide deposit in Kazakhstan, has the potential to be the lowest cost zinc producer in the world, the managing director of Ennex International told the company's annual meeting yesterday.
Mr Christian Schaffalitzky said: "When commodity prices are low it's even more important to have a project that's strong enough to withstand the product cycles." Shareholders were told that feasibility studies carried out in 1998 give the deposit distinct production and commercial advantages, especially important while commodity prices are falling.
Studies show the deposit to be high grade and the mine is suitable for on-site zinc metal production, which cuts out the more traditional and costly smelting process and transportation costs.
"And in the commodity business, that's what makes the difference," Mr Schaffalitzky said.
Shareholders heard that Kazakhstan's political situation had settled since 1994, and the site should be operating by 2002, following financial and equity arrangements with banks and industry partners.
Ennex has disposed of its gold interests at Curraghinalt, Northern Ireland, to Nickeldon Minerals, a Canadian mining company, in a cash (US$500,000/€470,000), and equity deal. Ennex will also retain a 2 per cent "net smelter royalty over the property".
Ennex believes the future for zinc, while downward pressure continues on commodity prices, "is in metal production on site", a technique which Ennex has "developed considerable expertise and confidence in" during 1998. Ennex International has reduced its loss before tax from $1,314,000 in 1997 to $690,000 in 1998.
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