Bloomberg reported that Terramin Australia Limited is in talks with state owned Algerian banks to help fund development of a planned USD 266 million project in the North African country.

Mr Kevin Moriarty chairman of the Adelaide based company said that the environment is good for financing the project at the moment, particularly in Algeria. We are working on it at the moment with the banks.

Mr Moriarty said that finance from Algerian banks is the favored option as the terms would likely be more attractive than those offered by commercial western banks or smelters. Zinc has jumped 91% this year as demand from steelmakers’ rebounds.

He said that Terramin, which started production from its Angas zinc and lead mine in South Australia state last July, dropped 3.2% to 75.5 cents at 2:27 PM Sydney time on the Australian stock exchange. The stock has jumped 68% this year. There has been interest from zinc smelters in Europe, Asia and Brazil for sales accords from the Oued Amizour project. The mine has been estimated to produce as much as 500,000 tonnes of zinc and lead concentrate annually with production planned to start late 2011 or in 2012.

Mr Moriarty said that the company owns 65% of the project with two Algerian state owned companies owning the balance. A study completed in the Q1 of 2009 estimated a cost of USD 266 million to build the mine. The company is studying a doubling of the proposed production capacity, which if approved, would boost the construction cost.

(Sourced from Bloomberg)