Herald says N. Sumatra zinc project most likely viable

Australian mining firm Herald Resources Limited said on Friday that its zinc-lead project in Dairi, North Sumatra most likely would be viable to be brought into production even though a feasibility study had yet to be undertaken and zinc metal price is depressed.

?The current low zinc price will force many of the marginal zinc produces out of business. Already there is a reported reduction in production for 2002 of some 600,000 tons of zinc metal. Most of this will come from closure of low grade mines which are unlikely to ever re-open,? said Terry Allen, Herald?s Chairman when addressing company?s shareholders.

?It is therefore not too difficult to imagine a zinc price rally in the next year or two, which could be the time that hopefully we would be looking at to lock in sales. Although a feasibility study is yet to be undertaken, a resource with the high grade that we in Dairi, which is in the very upper echelons of grade in world deposits, is most likely going to be viable. Once in production, we should outlast most competitors in any future price slumps,? he added.

He dismissed worries about Indonesian political conditions that might threaten the continuity of the project.

?Despite current political condition not any single mining company lost title to a mine,? he said.

Allen said that currently the high-grade zinc/lead resources at Dairi Project, where further explorations is in progress, was estimated to have an in ground value of A $3.5 billion.

Herald Resources owns 72.63 percent of Cnadian listed International Annax Ventures, which in turn owns 80 percent stakes in PT Dairi Prima Mineral, the North Sumatra zinc-lead project operator. The remaining 20 percent shares in PT Dairi Prima Mineral is owned by state mining firm PT Aneka Tambang Tbk. (alex)