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In late May, Strategic Resource Acquisition Corp of Toronto, ON, Canada agreed to sell a significant portion of future germanium (Ge) and gallium (Ga) smelter leachate from the first two years of production at its mid-Tennessee zinc mining complex (MTM) near Gordonsville, TN, USA to Recapture Metals Ltd of Peterborough, ON (a supplier of recovered high-purity gallium). On an annualized basis, total leachate from the smelter is expected to be in excess of 12,000 tonnes per year (tpy).

SRA acquired the complex in December 2006 (consisting of five zinc mines and a mill), formerly operated by Pasminco. It has a 28 year history of continuous operation from 1975 to 2003, producing one of the world’s highest-quality zinc concentrates. At a mill recovery rate of about 94.6%, a concentrate was produced grading 64.5% zinc (near the theoretical maximum of zinc in concentrate), 0.05% gallium and 0.04% germanium. Prior to being placed on care and maintenance due to historically low metal prices, MTM was the largest zinc mining operation in continental USA. The resources in the mines and additional mineral rights acquired are estimated to contain over 26 million tons of zinc resources.

However, historically, processing of leachate was limited to Ge recovery and excluded any value for Ga due to technological limitations of former processing methods. Now, Recapture will use its processing capability to further increase economically payable Ga.

In May 2007, SRA closed an initial public offering and contracted Dynatec Mining Corp of Richmond Hill, ON to manage the restart of mining (in December) and milling (this March), as well as the first two years of operations.

Most zinc concentrate production in the first five years has been allocated (with the remainder reserved for spot market sales). In November, SRA agreed to sell a major portion of MTM’s production (up to 90,000 tons annually over five years) to Nyrstar SA/NV (the world’s largest producer of zinc metals and alloys). Its smelter, just 100 miles west in Clarksville, TN, is where the concentrate was processed previously. Regular shipments to Clarksville started in April, and were expected to reach 5000 tons per day in June, then 7500 tons per day by fall. Nyrstar is returning the residue (rich in both Ge and Ga by-products) to SRA.

The Nyrstar agreement allows SRA to develop technology for optimizing the recovery of Ge and Ga. In October 2007, SRA entered into a technology development agreement with mineral R&D firm Drinkard Metalox Inc (DMI) of Charlotte, NC, USA to evaluate and recommend processes to optimize the recovery from zinc concentrate smelter residues of by-products including Ge and Ga.

In the meantime, concurrent with the plan to develop a processing facility to maximize recovery, the agreement with Recapture Metals enables SRA to realize immediate contributions for Ge and Ga, says SRA’s CEO Victor Wyprysky. “Access to state-of-the-art technology to optimize both metals will strengthen SRA’s position in the global marketplace.”

Also, in early June, SRA entered into a tri-partite, two-year memorandum of understanding with New York-based Amlon Resources Group LLC (a diversified metals and industrial byproducts management group) and a Chinese end-user group for the sale of 5000tpy of Ge/Ga-rich leachate in the first year and an increasing amount in the second year (with advance payment starting this fall). The agreement is subject to the approval of a trial shipment of leachate, and should be finalized by September.

SRA says that it has now effectively provided for the sale of the majority of its Ge/Ga-rich leachate into 2010. “This agreement further realizes the economic value of both our germanium and gallium, a marked improvement over the history of the mid-Tennessee mining complex, as no credits were ever received for gallium,” says Wyprysky. SRA reckons that the Ge and Ga could also indirectly lower the cost of zinc produced, making MTM one of the lowest-cost zinc mining operations in the world, as well as providing a diversified revenue source.

Once in full production, SRA expects MTM to be not only the largest zinc producer but also the largest source of Ge and Ga in continental USA, producing about 35,000kg of each (currently trading at about $1400 per kg and $500 per kg, respectively).

SRA also plans to explore and develop additional properties and redeploy cash flow to pursue a strategy of acquisitions.

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Visit: www.sra-corporation.com

Visit: www.recapturemetals.com

Visit: www.amlonresources.com