Exploration group Minco has cut its losses and says its Pallas Green operation in Limerick is one of the most exciting zinc prospects in the world.

The AIM-listed Irish zinc and gold explorer says its own finances are adequate to fund its current drilling programme.

The comments came as the firm posted a pre-tax loss of €106,748 for the year to the end of last April against a loss of €229,110 last year, a reduction of 46 per cent.

The operating loss also fell by 46 per cent to €113,590 from €243,205 last year, a loss per share of 30 cents against a loss of 65 cents in 2001. In a statement, chairman Mr John Teeling said the principal problem the firm faced was the "disastrous state of the zinc industry" with prices at an all-time low.

He said the firm's current focus was on zinc and that the current drilling programme was concentrating on a large ore body at Pallas Green.

Mr Teeling said the indications to date at the site were very encouraging. Minco also has exploration sites at Shinrone, Co Offaly, Moate, Co Westmeath, and Holycross, Co Limerick, from which its joint venture partners Noranda, Anglo American and Billiton have pulled out because of cuts in their exploration budgets caused by the global collapse of metal prices.

"We intend to maintain most of the ground we have and in this we have been greatly helped and encouraged by the State, which has relaxed expenditure commitments. This farsighted decision will work. We are already marketing the prospectivity of our holdings to multinationals and there is some interest," Mr Teeling said.

In relation to the firm's gold holdings, the statement said the firm was convinced a small viable gold deposit existed in the Wicklow/Wexford area but that work needed to be done to convince the local population of the benefits of such exploration.

It said the current rise in the price of gold was welcome but not adequate to stimulate exploration.