Pasinex Resources delivers on promise to de-risk Turkish zinc mine

The high-grade Pinargozu zinc mine in Turkey. Source: Pasinex Resources Ltd.

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The high-grade Pinargozu zinc mine in Turkey. Source: Pasinex Resources Ltd.

Pasinex Resources Ltd. [PSE-CSE; PNX-FSE] on Wednesday December 20 made good on a long-standing promise to deliver a technical report containing a resource estimate for its Turkish zinc mine that is compliant with NI 43-101 standards of disclosure. The technical report that has been filed with Canadian regulatory authorities.

Pasinex is a company that was launched in 2012 by Steve Williams, an Australian metallurgist with a background in geometallurgy. He is now the company’s CEO. Since then, Pasinex has distinguished itself by getting its high-grade Pinargozu zinc mine in Turkey into production without going through all the usual regulatory and financing hoops.

It has also ridden the bull market for zinc metal that many analysts say could continue for another couple of years. Pasinex has achieved that goal after making an early decision to join forces in a 50/50 joint venture with Turkish mining company Akmetal AS to look for zinc and lead deposits in the Adana and Kayseri regions of southern Turkey

They planned to focus an area that is underlain by a northeast-southwest trending belt of carbonate-dominated rocks (the Horzum Zinc Trend) that are known to host small high-grade oxide zinc deposits, many of which had been mined already.

That included the former Horzum Mine, which was operated by Akmetal and produced approximately 1 million tonnes of zinc oxide ore (grading between 20% and 30% zinc) from 1974 to 2000, including 420,000 tons of sulphide ore.

When the joint venture announced in May 2013 that it had acquired the Pinargozu exploration license immediately to the north of the Horzum Mine, Pasinex director Sven Olsson said Akmetal officials were confident that it could be put into production without the help of a formal resource estimate.

Akmetal argued that the joint venture could finance the operation by shipping the high-grade ore to customers and using the revenues to pay for mine development. This is common practice in Turkey, but highly unusual in North America.

Three years after the mine went into production, that strategy looked to have paid off when Pasinex reported its first profit in 2016, a year when the joint venture produced and sold 26,462 tonnes of direct shipping ore with an average grade of 32.5% zinc.

More recently, on November 27, 2017 Pasinex issued a press release announcing a profit of $1.8 million for the third quarter of 2017. During the quarter, the Pinargozu Mine produced 15,760 tonnes of direct shipping material with an average grade of 35% zinc.

However, Williams has said decision to proceed to production without a feasibility study created the risk of failure. As a result, he said the company was planning to remove some of that risk by delivering a NI 43-101 compliant resource for Pinargozu before the end of 2017.

On November 9, 2017, the company announced a maiden resource of 200,000 tonnes, averaging 31% zinc. This equates to 61,600 tonnes of contained zinc metal or approximately 135.7 million pounds of zinc. The company said three quarters of the resource tonnage is oxide material at an average grade of 29%. One quarter of the tonnage consists of zinc sulphides at an average grade of 35% zinc with silver credits. This information is contained in a technical report that has been filed on SEDAR and on the company’s website, the Pasinex said on Wednesday.

“This result now formally underpins our high-grade zinc production and direct shipping operation for the next few years,’’ Williams said in a press release.

The company said it should be noted that since the “effective date” of June 30, 2017, the tonnage in the mineral resource estimate has been depleted by approximately 20,000 tonnes of high-grade shipping material, mined at a rate of 150 tonnes per day. That amounts to about 60,000 tonnes annually.

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