Tirex Resources (CVE:TXX), is an emerging copper and gold production company that owns the Mirdita Project in Albania, and is a pioneer in a new era of mineral exploration within the country.
The large copper-gold-zinc Mirdita Project is effectively 100% owned and encompasses a 45 kilometre strike line that includes 17 historic deposits, 9 of which became producing mines, with many of them having extensive underground workings. Historical production from the District is said to be in excess of 10 million tonnes of ore. In 2007 Tirex completed an airborne EM geophysical survey that was the first ever airborne geophysical survey completed in the history of the country, and identified 102 geophysical anomalies, most of which had never been drilled before.
The area hosts an existing network of roads and power infrastructure established by historic mining efforts, has access to a paved highway, electrical power grid, and is a short distance from a local sea port and labor force. Tirex's efforts in Mirdita have excellent support by the Albanian government that is seeking to boost employment in a region that is economically disadvantaged.
Albania is a stable parliamentary democracy with a population of 3.6 million people, a corporate tax rate that was recently reduced from 20% to 10%, and competent Mining Law that has been in place since 1994.
The project has also received the support of the European Bank for Reconstruction and Development that provided a €8 million finance facility to fund an aggressive exploration and development effort. This was provided on favorable terms because of the Bank’s mandate to assist the growth of free market economies, and is the first natural resource investment it has ever made in Albania and their first exploration investment anywhere in the world.
The Company has signed an agreement with Ekin Maden to commence copper and gold production from six mine sites within the Mirdita Project area. Elkin Maden is a leading Turkish non-ferrous metals and minerals trading company that has significant mining and processing experience in Albania. This will allow Tirex to focus on resource expansion and discovery, while building substantial cash flow through the fast tracking of commercial production.
The two partners have established a 50/50 operating company called Opco that will extract ore from Tuc, Paluca, Qaf Bari, Letitna, Gurthi-Koshaj, and Fushe Arres. Elkin Maden will supply a 500 tonne per day mill, with an annualized process rate of 150,000 tonnes; provide mine equipment, development and operational capital, and possibly new processing facilities to expand output of concentrates. Each partner will receive 50% of the net ore value, less mining, processing and sales cost. Opco is targeting a rapid ramp up to 2000 tonnes per day of production over the first two years of operations. If this target is reached, new mill facilties will be constructed with Tirex participating in the ownership of such facilities that would be financed by Ekin Maden.
Tirex will be protected from cash calls for a period of 24 months, through a capital and operating loan provided by Ekin Maden, who will also receive a portion of the concentrate as compensation for processing and sales services rather than cash.
Elkin Maden owns an existing mill and flotation plant complex that is located at Fushe Arres, and was recently upgraded to handle a major capacity increase and will handle ore processing for Opco.
The Company is conducting an assessment of underground resources within underground mine workings at Fushe Arres, Tuc and Qaf Bari. Historical non compliant resource estimates compiled by the Albanian Geological Survey in the 1970’s estimated 1,115,600 tons of 1.04% Cu at Fushe Arres, of which 267,000 tons of 1.54% Cu, is near surface; Qaf Bari hosted an additional 445,700 tons of 2.07% Cu, and Tuc hosted 2,072,000 tons of 1.54% Cu. All of these deposits are reported to be open for expansion.
These resources were calculated according to the Russian deposit reporting system and are roughly equivalent to Canadian inferred and indicated categories. Tirex notes that these historical estimates only serve as guides to mineralization, and has spent the last four years rebuilding and assessing the Albanian databases on all of its Mirdita resource assets. They have also observed that their current drilling programs confirm that historical estimates omitted assays for gold, silver, and zinc mineralization, and focused dominantly on copper.
Ekin Maden is the only modern miner operating in the Mirdita VMS District with production from the Lak Roshi and Munelle deposits that were developed during the communist era, as are the deposits contributed by Tirex to the Opco venture. These resources are all Kuroko type VMS deposits, with copper and zinc grades that are comparable to the type of ores that Ekin Maden has been mining at Mirdita.
The partners are targeting copper and gold production and assessing the viability of zinc production from deposits that were in various stages of development, when mining activity ceased as democratization and privatization took over from communism.
Since arriving in Albania, Tirex has completed geophysics, mapping and data compilation work in all areas of the district while drilling four areas known as Koshaj, Gurthi South, Letitna and Gurthi with excellent drill results.
Highlights at Koshaj include MR08-01, which intersected 65 metres of 0.6% Cu, 9.0% Zn, 0.3% Pb, 48.4 g/t Ag, and 2.7 g/t Au, at a depth of 38.5 metres, Letitna at MR08-37 intersected 61.5 metres of 0.57% Cu, 1.56% Zn, 10.6 g/t Ag, and 0.7 g/t Au at a depth of 134 metres, Gurthi South No 2 at MR08-65 intersected 19.3 metres of 3.66% Cu, 1.13% Zn, 8.3g/t Ag, and 1.3g/t Au at a depth of 101.5 metres; and Gurthi South No 1 at MR10-60 intersected 7.7metres of 5.23% Cu, 1.84% Zn, 57g/t Ag and 4.6g/t Au at a depth of 249 metres.
In 2011, the Company will add Qaf Bari South to the drilling schedule. This prospect was identified through an extensive exploration program conducted in 2008 and 2009 that outlined a 2,000 metre strike line along felsic dominated terrain that is up to 500 metres thick, and carries lithological features and temporal relationships between volcanism and alteration that are similar to other VMS Districts that host major economic deposits.
Tirex plans to get into production before the end of the current calendar year with production of copper and gold, and is assessing zinc production.Drill programs to date are also confirming that Mirdita is developing significant quantities of silver and gold resources on a district wide basis.
The Company has approximately $4million in working capital, is capitalized at $62 million, and has the financial backing of a major European bank, that augurs well for the successful development Mirdita.