Significant zinc intercepts results for Zinc One ‘highly encouraging’
Back in December when we wrote on Zinc One Resources Inc. (TSXV: Z) (“Zinc One”) and its impending and near-virgin drill program, we commented that urgency was key if the company wanted to start signing contracts during peak pricing. The Bongará project in North Peru featured zones that had never before been drilled, and although the site itself is a past producing mine, the wait for those numbers must have been intense.
Thankfully, initial results from the Mina Grande Sur and Bongarita zones have clearly demonstrated the potential value of the project and will form the basis of the resource, estimate expected to be finalized this year. At Mina Grande Sur, a total of 542.9 metres of core samples were taken from 33 holes, and the results are in for the first 11.
Significant intercepts include:
- MGS18001 – 5.5 metres of 26.1% zinc, starting at 3.0 metres drill depth
- MGS18003 – 4 metres of 32.5% zinc, starting at surface
- MGS18003 – 15 metres of 21.5% zinc, starting at 15.0 metres drill depth
- MGS18004 – 9.1 metres of 43.6% zinc, starting at surface
- MGS18006 – 14.1 metres of 32.8% zinc, starting at surface
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At Bongarita, a total of 587.2 metres was extracted from 36 holes, with the first thirteen being available now. Bongarita is a particularly exciting patch of dirt, and the very first results from this area are highly encouraging.
Significant intercepts include:
- BO18005 – 11.5 metres of 16.0% zinc, starting at surface
- BO18005 – 5.7 metres of 29.2% zinc, starting at 5.8 metres drill depth
- BO18007 – 7.0 metres of 25.3% zinc, starting at surface
Last year, zinc prices grew by almost 30 percent, fuelled by supply concerns, diminishing stocks and a positive outlook regarding Chinese demand. Prices hit ten year highs (~US$3,500/tonne) at the start of 2018, but have since settled to ~US$3,300/tonne. At these prices, the grades already proven at Bongará are so far beyond economical as to be a complete no-brainer.
The site already has a historical measured and indicated resource totaling 1,007,796 tonnes at 21.61% zinc and historical inferred resource of 209,018 tonnes at 21.18% zinc, although historical estimates do not meet CIM standards, meaning that this resource estimate is the most critical aspect of relaunching the mine. We now know that there is further strong mineralization beyond what was recorded previously, and so we expect extraction from this site to remain viable into the foreseeable future.
The fact, then, that the early results actually exceed the historical case in a number of cores is a great sign. As technology improves, so do sensory instruments, and so one would expect detection capabilities to consequently increase over a timeframe such as this. The mine was briefly worked in 2007/8 for approximately 25,000 tonnes of zinc metal before it was halted during the financial crisis and remained closed due to the poor sentiment that dogged this metal during over the course of the following decade.
However, commodity markets seemed to have turned around and increasing prices always attract new investors. Since Zinc One is nearing the end of a long road of exploration and development, we expect investors to start piling in, making the construction of a mine and possibly even a processing plant much easier. For these reasons, we fully expect Zinc One to release a positive resource estimate in enough time to launch Bongará with relative ease.