Alara Resources: US$0.03 a litre diesel highlights low costs of Saudia Arabian zinc, copper project 

(MENAFN - ProactiveInvestors - Australia) Alara Resources (ASX: AUQ) is proving just how inexpensive it is to operate in Saudia Arabia, with the company highlighting the low cost advantages of its 50% owned Khnaiguiyah Zinc-Copper Project at the recent Proactive Investors' One2One Forum in Perth.

Shanker Madan, managing director, told attendees at the event last Wednesday diesel was low in cost at just US0.03 per litre.

The presentation on the night can be ACCESSED HERE.

Saudia Arabia's potential as a favourable mining jurisdiction is slowly starting to be realised with a growing number of mining projects starting to emerge.

Madan said Saudia Arabia is often thought by many to be just oil, but the country has enormous potential for gold and copper.

"There is a gold mine only 15 kilometres away from us. There are five new gold projects being developed with 10 million ounces of JORC Reserves. So these are happening but they are only coming out in the public eye now."

The Khnaiguiyah Zinc-Copper Project is the second most advanced project in the region with a JORC Resource of 26.4 million tonnes at 3.9% zinc and 0.12% copper along with 7 million tonnes at 0.8% copper.

This Resource could underpin a 1 to 1.5 million tonne per annum throughput zinc and copper mine for at least 10 years.

A Definitive Feasibility Study is on track for completion by July.

Alara plans to commence a 70,000 tonne per annum zinc operation at a time of strongly rising zinc prices above US2,500 per tonne.

Further exploration upside at Khnaiguiyah is expected from drilling activity that was carried out after the cut-off date for completion of the JORC Resource.

Khnaiguiyah includes four mineralised zones located within 1 or 2 kilometres from a central area that have been discovered and drilled to date. The zones are about 3 kilometres apart from each other.

Metallurgical work has demonstrated high recoveries of 87% for copper and 91.5% for zinc, at concentrate grades of around 30% for copper and 57% for zinc.

The project is strategically located close to roads, power and camp infrastructure.

Alara has three to six drill rigs secured and active on the project, with over 35,000 metres of drilling carried out since February 2011. This is in addition to the 45,000 metres drilled historically.