Zinc One uncovers significant new intercepts
Zinc One Resources Inc. (TSXV: Z) is a Canadian exploration company looking to re-start their 100% owned high grade Bongara Zinc mine in Peru. They also 100% own the neighboring Charlotte-Bongara Zinc prospect. The company is at the exploration stage and drilling to determine the size of their resource. Of key significance zinc grades at their project are generally above 20%, compared to the global average of just 4.9%.
For example recent drilling has uncovered significant new intercepts including:
- MCH18027 – 14.8 metres of 28.4% zinc, from surface
- MCH18035 – 39.0 metres of 27.4% zinc, from 23.8 metres drill depth
The Company 100% owns the Bongara Zinc Mine Project and Charlotte-Bongara Zinc prospect, which has a combined exploration potential along +6 km corridor. The Bongara project is spread over 11,125 hectares with several mineralized zones: Mina Grande (Sur, Centro, Norte), Mina Chica, Bongarita, Campo Cielo and Cristal). The mineralization is at surface or near surface and at very high grades up to 50% zinc.
The Bongara Zinc Mine project has a historical measured and indicated resource of 1,007,796 tonnes @ 21.61% Zn. That works out to be approximately 218,000 tonnes of contained zinc, with plenty of exploration upside. The ore is favorable with proven pyrometallurgical method recovers >90% from zinc oxides, carbonates, and silicates.
The neighboring Charlotte Bongara Zinc project has historical drill intercepts that have included 15 m grading 29.5% zinc and 11.5 m of 29.7% zinc. The Charlotte tenements also have further exploration upside.
Near term catalysts include a mineral resource announcement in Q2 or Q3 2018 followed shortly thereafter by a Preliminary Economic Assessment (PEA). Should the resource be of significant size and economic to mine, the Company plans to bring the Bongara Zinc Mine back into production within 24-36 months time. The mine was previously shut down in 2008 due to low zinc prices.
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Infrastructure at the Peru mine site is minimal although there is a paved highway. It is likely that the ore will be processed by a Waelz kiln on site, which the company states is a “simple on-site construction and operation with relatively low capital costs, comparatively high zinc recovery (>95%), and up to 70% zinc as oxide in final product.” We will learn a lot more specific detail once the PEA is released in Q3.
Zinc One signed a community agreement in July 2017, and sovereign risk is low in Peru as it is considered to be a mining friendly country.
Zinc One is currently very cheaply valued on a market cap of just CAD $28m, especially given their very high zinc grades, 6km zinc mineralized zone, imminent resource upgrade and PEA to follow, and that the company has potential to be in production as soon as 2020.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>