Ennex set to exercise option in Kazakhstan
ENNEX, the exploration company that is now concentrating on zinc, intends to exercise an option to acquire 95pc of a billion dollar zinc deposit in Shaimarden, in the former Soviet Republic of Kazakhstan, from the Zinc Corporation there.
The company, now controlled by mining engineer Christian Schaffalitzky, intends to prepare a feasibility study over the next year in association with a recognised international consultancy firm and could be producing its first zinc ingots by the year 2000.
``The careful test work and metallurgical studies we have carried out are based on an open pit mine with mining costs of $700 per tonne,'' Mr Schaffalitzky said.
Ennex estimates that approximately one million tonnes of zinc are recoverable over a 15 year mining life, and with the cost of zinc currently at $1,200 a tonne, the total resource value could exceed $1 billion.
Work so far indicates that the Shaimarden deposit contains over four million tonnes of zinc oxide material, grading 25pc zinc on average.
Ennex has carried out tests on a hydro-metallurgical processing system now used in Padaeng, Thailand, which is believed to be able to extract the 25pc zinc efficiently.
Ennex will acquire the 95pc interest in the mine by the issue of 30 million Ennex shares, plus warrants over a further 15 million shares at 30p.
Ennex will be able to reduce the issue of the 30 million shares by 25pc by paying the Zinc Corporation $2.5m. ``This is something we would hope to do,'' Mr Schaffalitzky said.
Ennex would receive £4.5m ($6.5m) on the exercise of the warrants.
The share issues would require satisfactory diligence and approval by Ennex shareholders.
``This is a very positive development for shareholders as test work to date encourages our initial view of the commerciality of this mine,'' Mr Schaffalitzky said.
``The move is in line with our long-term strategy of increasing shareholder value and focusing on zinc opportunities worldwide,'' he said.
Ennex turned in a net loss of $617,000 in the first half of this year after writing down the value of shares in Caledonia Mining by $500,000. The company had cash resources of $5.67m last June 30.
Ennex is also involved in ``a pure exploration play'' in Pakistan, where it intends drilling for zinc as soon as a rig can be brought to the site.
Back in Ireland, Ennex is close to feasibility stage on the Curraghinalt gold deposit in Co. Tyrone. The company may not develop this resource itself but may seek a partner or contract mine developer.