Pasinex files lawsuit over Turkish zinc license

Pasinex Resources Ltd. (PSE-CSE, PNX-FSE) has announced the filing of court action after the mining ministry of Turkey failed to extend the principal mining operational license for the company’s Pinargozu zinc mine and nearby Akkaya property beyond April 14, 2023.

Pasinex is a Toronto-based company that owns 50% of Horzum AS, via its 100%-owned Pasinex Arama unit. Horzum AS owns 100% of the Pinargozu mine. Horzum sells directly to zinc smelters and or refiners through commodity brokers from the mine site.

The company also holds an option to acquire an 80% stake in the Gunman high-grade zinc exploration project in Nevada.

On Monday, the company said Pasinex Arama and Horzum AS have each filed a court action in Adana, Turkey challenging the denial of the license extensions. “The actions were filed on July 1, 2022, in order to meet the statue of limitations in the mining law,” Pasinex said in a press release.

“At the present time, Pasinex has not been provided with any reasons as to why these licenses have not been extended at this point and will work in the coming weeks with the officials of MAPEG [the mining ministry] to negotiate solutions for the mutual benefit of all,” the company said. “Turkey has one of the best and most advanced mining laws in the world that benefits all parties,” it said.

Pasinex shares sank 40% or $0.02 to $0.03 on volume of 195,000. The shares currently trade in a 52-week range of $0.07 and $0.02.

Pasinex was launched in 2012 by Steve Williams, an Australian metallurgist with a background in geometallurgy. Since then, the company distinguished itself by bringing its high grade Pinargozu zinc mine into production without going through all the usual regulatory and financing hoops.

Pasinex recently recorded a net profit of $3.63 million in the three months ended March 31, 2022, compared with a net loss of $0.21 million in the same period in 2021. The company said Pasinex Arama recorded dividend income of $4.1 million in the first quarter of 2022.

It said Horzum AS sold approximately 2,500 tonnes of zinc sulphide product in the first quarter of 2022 at an average grade of 53% zinc and an average sale price of approximately US$1,318 per tonne.

Horzum mined 5,450 tonnes of zinc produced in the first quarter at Pinargozu, including 3,842 tonnes of high-grade zinc sulphide product.

“The mining operation at Horzum AS, with about 125 employees and contractors, will continue as usual during the period of discussions,” Pasinex said. “The advancement of the 541-adit in the Pinargozu license towards the Akkaya license will continue to allow underground exploration of the Akkaya license when the operational license of Akkaya is extended,” the company said.

“Pasinex believes that Horzum AS has good community relations, an excellent safety record and management system, meets all environmental regulations and laws, and is one of the largest employers in the Kozan region of the Province of Adana and is working to develop a longer-term sustainable mining operation for the benefit of all,” it said.