Lundin could bail out of Russia Ozernoe zinc site

TORONTO, May 15 (Reuters) - Lundin Mining (LUN.TO: Quote, Profile, Research) is considering options including the possible sale of its stake in the massive Ozernoe zinc deposit in Russia, due to delays in completing a feasibility study and uncertainty over new Russian investment laws, the company said on Thursday.

Lundin, which has a 49-percent stake in the deposit, says it has faced delays in licensing and compliance in completing the study.

"We're really reviewing whether this project continues to meet our criteria for ongoing development," Chief Executive Phil Wright said on a conference call to discuss the company's first-quarter results.

"Suffice it to say, we're just looking at other alternatives as to how we can realize value with this project."

Ozernoe is considered one of the largest undeveloped zinc and lead deposits in the world, and would be expected to produce 300,000 to 350,000 tonnes of zinc annually, plus significant volumes of lead, according to Lundin.

Wright said the company is closely following Russian legislation -- not yet in effect -- restricting foreign investment in certain sectors, including mining.

Asked by an analyst on the call whether the company would consider stopping all spending on the project or sell it, Wright replied, "You summarized the situation well. We're looking at it." (Reporting by Cameron French; Editing by Scott Anderson)