Pasinex's Turkish Gambit: A High-Stakes Dive for High-Grade Zinc

TORONTO, ON – December 12, 2025 – For Pasinex Resources, a Toronto-based junior miner, a single regulatory approval from Ankara has unlocked a high-stakes corporate endgame. The company announced today that Türkiye’s General Directorate of Mining and Petroleum Affairs (MAPEG) has officially sanctioned its move to acquire 100 percent ownership of the Horzum AS entity, which operates the exceptionally high-grade Pinargözü zinc mine.

This isn't just a procedural footnote; it’s a strategic pivot. The approval resolves a contentious joint-venture period that saw production falter and exploration grind to a halt. By consolidating control, Pasinex is unshackling itself from past constraints and immediately launching an aggressive, capital-intensive plan to drill deep into the mine’s promising geology. The story behind this transaction reveals a calculated bet on grade, depth, and timing, positioning a small player to punch above its weight in the global zinc market.

From Stalemate to Full Control

The MAPEG approval marks the culmination of a strategic maneuver to gain full operational command over a key asset. Previously, the Pinargözü mine was operated under a 50/50 joint venture with Kurmel Holding. This arrangement proved challenging, with recent financial disclosures citing that the former partner had halted underground development, leading to a sharp decline in output. In 2024, Horzum AS produced just 3,601 tonnes of high-grade zinc product, a steep drop from 8,061 tonnes the previous year.

With the share transfer finalized, Pasinex moves from a partner in dispute to the sole master of Pinargözü's destiny. The financial terms of the buyout are shrewdly structured to align with future success. Pasinex Arama, its Turkish subsidiary, will make production-linked payments to Kurmel totaling US$1.6 million, but only after specific production milestones of high-grade ore (≥30% zinc) are achieved. This de-risks the acquisition; if the mine doesn't produce, Pasinex doesn't pay, tying the cost of control directly to the asset's performance.

This newfound autonomy is critical, as the company faces significant financial headwinds. Pasinex reported a net loss of over $1.1 million for the first nine months of 2025, driven by equity losses from the underperforming joint venture and rising administrative costs. Furthermore, the cost per tonne mined at Pinargözü swelled to CAD $985 in 2024 from CAD $601 a year prior, a direct consequence of lower production volumes against fixed operational costs. Gaining 100% ownership isn't just about control—it's about survival and creating a viable path to profitability by maximizing the mine’s unique potential.

Unlocking Pinargözü’s Depths

With the corporate hurdles cleared, Pasinex is wasting no time. The company has announced a 1,000-metre development program slated to begin in January 2026. This isn't a tentative exploration; it's a decisive push to access the mine's largely untapped depths. The centerpiece is a 700-metre decline designed to plunge 100 to 150 metres below the current 520-metre production level, targeting high-grade zinc sulphide mineralization.

The geology of the Pinargözü mine is what makes this gamble so compelling. It's a carbonate replacement deposit (CRD), a type known for forming incredibly rich, high-grade pockets of mineralization. Historically, the mine has yielded over 150 million pounds of zinc from material grading between an astonishing 31% and 52% zinc. For context, a typical zinc mine might operate on grades of 5-10%.

Dr. Larry Seeley, Executive Chairman of Pasinex, highlighted the strategic importance of this deep dive. “Our new 1,000-metre adit will not only provide access to the high-grade sulphide zones we have identified at depth but will also pass through prospective marble-altered zones, offering immediate discovery potential during development,” he stated. This dual-purpose approach—accessing known targets while exploring new ground along the way—is a capital-efficient strategy to expand the resource base and extend the mine's life.

Investors, however, must note the cautionary flags. Pasinex has not completed a current NI 43-101 compliant technical report, the industry standard for resource estimation. Grade control relies on handheld XRF analyzers, with independent lab assays only conducted for final sales. This approach, while faster for internal decision-making, places a greater onus on the company's internal expertise and geological modeling.

Navigating a Complex Zinc Market

Pasinex’s aggressive expansion comes as the global zinc market sends mixed signals. The International Lead and Zinc Study Group (ILZSG) forecasts a growing market surplus, potentially reaching 271,000 tonnes in 2026 as new and restarted mines in Africa, Europe, and Asia come online. This wave of new supply could theoretically put downward pressure on prices.

However, the story is more nuanced. Zinc demand, while seeing modest growth, is underpinned by powerful long-term trends. The global energy transition is a major catalyst, with zinc being a critical component in galvanizing steel for wind turbines and solar panel structures. Wood Mackenzie forecasts that demand for zinc from solar technologies alone could double to 800,000 tons by 2040. Furthermore, a persistent zinc concentrate shortage has tightened the smelter market, keeping spot prices and regional premiums buoyant despite broader supply forecasts.

This is where Pasinex's high-grade strategy becomes its trump card. By producing a premium product with zinc content often exceeding 50%, the company can sell directly to smelters and command higher prices, insulating it from some of the margin pressures that affect lower-grade producers. The ability to deliver exceptionally high-grade concentrate could make Pinargözü a sought-after source, even in a well-supplied market. Pasinex is betting that in the world of commodities, grade is king.

Investment and Oversight in Türkiye

Executing this ambitious plan requires navigating Türkiye’s robust regulatory environment. The MAPEG approval itself demonstrates that the country's framework for foreign investment in mining is functional, albeit requiring careful adherence to legal processes. Pasinex's operations will be governed by stringent environmental and safety laws, including Mining Law No. 3213, which mandates comprehensive management and rehabilitation plans.

The company has already begun expanding its workforce in preparation for the development push, a move that will inject economic activity into the local Adana Province. Maintaining a strong social license and adhering to high ESG standards will be paramount, especially as operations expand and deepen. The company’s reported zero-fatality year in 2024 is a positive indicator of its commitment to safety, a critical factor for securing long-term operational stability and investor confidence.

Ultimately, Pasinex has traded the frustrations of a deadlocked partnership for the challenges of sole ownership and ambitious expansion. The company is leveraging its prized asset to make a bold, capital-intensive move intended to secure its financial future. Success hinges on its geological assumptions proving correct, its operational team executing flawlessly, and the enduring market premium for high-grade zinc holding firm.