Nevada Zinc’s drilling hits broad zone as global zinc enthusiasm grows
You have to go back a few years to think of a time that is as propitious for zinc as right now — especially this week when the metal hit its highest price in more than a year, finishing Wednesday on the London Metal Exchange at $2,286 a tonne. Even the pessimists, while allowing for a small correction, still see the metal finishing strongly through to the end of the year. (And the industry is no doubt happy that Glencore has given no sign of re-opening its large zinc mines, shuttered due to low prices.)
Here’s another sign that zinc has legs: there’s a battle going on in Australia over a 30% interest in a zinc-lead project in the Northern Territory owned by a junior company (the senior partner being Teck). It began when a pharmaceutical company bid A$14.8 million for the stake. Now, we have seen companies switching into resources as the cycle turns upwards but that has usually been for fashionable technology metals such as lithium and graphite. But it’s been a while since there was a bidding war for a zinc project, as there is now with another junior coming on over the top with an offer of A$15 million.
And in Ireland, attempts are being made to revive zinc mining to try and catch the better prices for the metal.
It is against this background that Nevada Zinc Corp. (TSXV: NZN) reports that it has intersected 110.8 metres at 7% zinc-lead, including one section that assayed at 20.24%. That certainly is a broad zone of mineralization.
Nevada Zinc, which has focused on zinc projects in Nevada and gold in Yukon, was reporting the latest results from its Lone Mountain project.
Nevada Zinc’s 100% owned Lone Mountain project is located within close proximity to Eureka, Nevada. The 218 claims at Lone Mountain are spread out over 20 square kilometres and surround the historic Mountain View Zinc Mine. Between 1942 and 1968, more than 5 million pounds of zinc, 650,000 pounds of lead and 4,000 oz. of silver were mined at Mountain View.
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This latest drill hole, LM16-56, hit the newly discovered zone at a depth of 164.59 metres; this is the deepest test of this zone, appropriately called the Discovery Zone, so far, and the company says the zone remains open to further expansion below this depth.
The current drilling program is part of a work program that is designed to evaluate the potential of the project to host near-surface zinc-lead resources could be mined using low-cost open pit mining techniques.
Located in close proximity to other producing mines, Nevada Zinc’s Lone Mountain project has good access to important infrastructure, such as roads, energy and water. Bruce Durham, Nevada Zinc President and CEO, reviewed more than 200 projects before choosing Lone Mountain. Apart from the geology, Nevada had great appeal as a mining jurisdiction: indeed, the Toronto-based Fraser Institute named the state as the third favourite jurisdiction from its annual poll of mining executives worldwide (Finland and Saskatchewan were the only ones to be viewed more favourably).
Australian-owned Macquarie Research has this week dubbed zinc its favourite metal, adding that it is not worried by any short-term “burn out” because of the promising long-term outlook.
And Simona Gambarini, commodities economist at London-based Capital Economics, asked in a note this week: Has the zinc rally further to go?
She allows that there may be a turn in investor sentiment but the big picture “remains one of falling supply and improving demand”. Even if the metal pulled back to $2,100/tonne before December 31 that would still be a gain for 2016 of 32%,
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