SHAIMERDEN PROJECT, KAZAKHSTAN
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The Shaimerden zinc oxide deposit is situated in northern Kazakhstan, some 300km south west of the city of Kostanai. In December 2003, ZincOx sold its 95% interest in the deposit to Kazzinc, Kazakhstan's largest producer of zinc. The consideration for the sale was $7.5 million in cash and, subject to the reconciliation of expected and actual zinc contained, additional deferred payments. The deferred payments, which are made in the January following the year end, amount to US$0.2375 in every dollar that the zinc price is above US$800 per tonne on the first 200,000 tonnes of zinc mined from the deposit. In order to ensure that the payments were spread over a number of years, there were deemed minimum (40,000 tonnes per annum) and maximum (60,000 tonnes per annum) zinc mining rates assumed in the agreement.
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The Shaimerden mine commenced production on 17 September 2006. In spite of considerable problems caused by water ingress to the open pit, which culminated in it flooding in March 2008, the water problem has been stabilized and the operation is now extracting zinc at the rate of about 30,000 tonnes per month. Kazzinc has confirmed that 200,000 tonnes of zinc has been mined from the deposit. To date, payments in respect of 190,174 tonnes have been received at an average price of US$2,314 per tonne. A final payment in respect of the final 9,826 tonnes is anticipated next year. Assuming a zinc price of US$2,323 ZincOx will be entitled to a further payment of US$3.5 million in January 2011.
Open Pit - Shaimerden |
