Zinc mining and recycling specialist ZincOx announced that development of the Jabali Mine in Yemen had commenced after it had secured the first project bond in the country.
Jabaili has a JORC compliant reserve of 8.7 million tonnes grading 9.2% zinc. Zincox has a 52% interest in the mine, and said it had secured a US$120 million debt financing linked to the zinc price. The remaining US$40 million that Zincox will need to invest in the project will be met from existing cash reserves which recently stood at US$51 million.
Andrew Woollett, Chairman of Zincox added:
"The Jabali mine development programme has already started with the ordering of long lead items of equipment, the building of our development team and the delivery of mining equipment. All the necessary permitting is in place and we expect development of the site to commence shortly."
The mine is expected to start production in the final quarter of 2009. Once in production, the Jabali mine is expected to produce 70,000 tonnes of zinc oxide per annum for twelve years.
Zincox also updated the market on developments in its recycling division, where it is developing rotary hearth furnace operations in Ohio, USA and Aliga, Turkey along with the refurbishment of an electro-refinery at its Big River Zinc Project, also in Ohio, which will require some US$400 million to develop. The Company said that it was still looking at several funding options, but that Tech Cominco, who holds 11.5% of Zincox equity, did not want to commit to funding the recycling projects, preferring to retain interest through its shareholding. Zincox is considering a two-staged development to lower the amount of capital required, with the Big River project receiving development first at a cost of US$169 million.