It is not an easy task to work through a market that is dealing with the fourth most commonly used commodity, globally. Trying to decipher what is a “play” and what is “real” is another scale up in difficulty especially in ASX (Australian Stock Exchange). Making a list of “interesting” companies is an even harder task.
When you take away the big players who are in the sector, there are not too many that stands out. There are a lot with projects that are more a product of the rush to get a zinc project into the company to attract funding a while back. Unfortunately, they are now stuck with it as the price surge did not happen. Now with China officially in a slow down pattern, I can not see the price surge happening. They will be lucky to get a price that is reasonable.
I have selected a few that I know of from previous dealings and some that I have discovered while researching for this blog. I must say there are a lot more companies than I thought. There are a couple of companies that I like, but I have had to do them separately as there was too much detail. I will post those shortly.
Venturex Resources is the closest small-cap company that may get into production. I do realise that it is more a Cu project than a Zinc mine, but it is the closest that I can find in regards to a small-cap ASX listed company. However, they do have a reasonable resource number for Zn. The other companies out there are either exploration or just doing up their resources, and it will be still a while before there is confirmation on absolute resource number.
The Sulphur Springs Deposit shows typical VMS morphology with a copper-zinc rich, massive sulphide lens that is underlain by a copper-rich stringer zone up to 50m in width. Mineralisation has been drilled over a strike of approximately 500m and to a depth of about 400m below the surface. Drilling below 400m vertical is sparse offering excellent exploration upside.
Sulphur Springs has a JORC compliant resource if 17.4 MT of 1.3% Cu, 4.2% Zn and 17 Ag/t.
The company has outlined a 12-year life of mine to produce 12,000tpa Cu concentrates and 32,000tpa of Zn concentrates. A pre-tax NPV of AUD338M with a payback of 2.6 years.
In October 2018, the company made a presentation on the financial result of the Definitive Feasibility Study.
I was a shareholder recently and sold out to relocate my investment. My original intention for the investment was for Sulphur Springs, but the stock went on a different course with the Pilbara Conglomerate gold rush. I do feel that this is still the main game. The only issue I think is the size and the shareholding as Northern Star Resources Limited is a 19.0% shareholder. In my opinion, the reluctance of a giant to throw lots of money into the production seems to be a sign of the quality of the project. That is my opinion.
In saying that, I am sure this will be interesting for the ASEAN investors, especially the ones to the northern parts.
Market Capital: 44M
Outstanding Shares: 239.9M (06/2018)
Top 20 Shareholding: 60.7%
The Kroussou Project consists of one Exploration License, G4-569, covering approximately 1,500 square kilometres located in Ngounié Province, western Gabon, 220 kilometres southeast of the capital city of Libreville.
Recent drilling has uncovered up to 15.2% zinc and lead at Dikaki, with Trek planning to release an exploration target for Kroussou in 2019.
On the 20 November 2018, the company announced some decent results from their Dikaki project. There were intercepts of 24.5% Zn to as high as 32.6% Zn
This company has a small minimal market capitalisation, and if they do find more decent intercepts, I think this may be a fair punt. The intercepts are not very wide, but I think its still early days. There are some encouraging 7m intercepts which are good. The issue will be how much cash do they have and will they be able to stay away from political issues that are common in Africa.
Market Capital: 4M
Outstanding Shares: 312.3M (06/2018)
Top 20 Shareholding: 53.6%
Terramin holds a 65% shareholding in WMZ, with the remaining 35% owned by two Algerian government-owned companies: (32.5%) and Office National de Recherche Géologique et Minière (ORGM) (2.5%).
The Project is on the Mediterranean Sea, 15km from the regional city of Béjaia, on the northern Mediterranean coast of Algeria. The town of Béjaia provides extensive infrastructure including an international airport and deepwater port. Location benefits include grid power, abundant water and proximity to European zinc smelters.
The Tala Hamza deposit holds a Resource of 68.6Mt (Measured, Indicated and Inferred) at 4.6% zinc and 1.2% lead at a cut off of 2.5% zinc equivalent (inclusive of Probable Reserve). The deposit is within the Oued Amizour permit area that covers 125 square kilometres and includes some potential additional prospects for lead-zinc and copper.
Market Capital: 224M
Outstanding Shares: 1869.2M (06/2018)
Top 20 Shareholding: 89.4% (2017)
Todd River Resources holds an extensive exploration portfolio of tenements in the Northern Territory. The company is exploring for base metals and gold.
Currently, the Company is focused on expanding the mineralisation identified in mid-2018 at the Mt Hardy zinc-copper Project north-west of Alice Springs and has an aggressive exploration program planned into 2019.
Also, the McArthur and Rover Projects are highly prospective, and both will be advanced during 2018 and into 2019. However, the recent news has been the high-grade intercepts coming out of the Mount Hardy project. The company quotes the project as a Cu-Zn project, and the recent announcement on the 29 November 2018 highlighted the interception of sulphide mineralisation. One of the holes had 21 metres of brecciated sulphide.
XRF values from of 3.9%Zn over 22.50m is impressive. They reported some zones going up to 10.2% Cu and 32% Zn. The results are from pretty deep down. So there will be some more work required.
What is more interesting for me was the partnership with S2 Resources Limited (ASX: S2R). Dr Mark Bennett will join the Todd River Board, and I am sure that will inject a lot of value to the company. The announcement was on the 22 November 2018.
Todd Resources will be worth keeping on the watchlist.
Market Capital: 11M
Outstanding Shares: 66.3M (06/2018)
Top 20 Shareholding: 36.2% (2018)
Red River Resources’ Thalanga Zinc Project consists of the Thalanga Mill and base metal deposits at West 45, Far West, Waterloo, Orient and Liontown, located about 65km southwest of Charters Towers in central Queensland.
Production of metal concentrates at Thalanga Zinc Project recommenced in September 2017 after a five-year hiatus. Thalanga is producing zinc, copper and lead concentrate with off-take agreements in place with Glencore (copper) and Trafigura (zinc & lead) for three years.
Market Capital: 83M
Outstanding Shares: 489.9M (06/2018)
Top 20 Shareholding: 46.3% (2017)
New Century Resources (ASX: NCZ) is an Australian base metal producer that has restarted the Century Mine in Queensland with the aim of becoming one of the world’s top 10 zinc producers.
New Century acquired the Century Mine when it ceased production in 2016 and has executed an economic rehabilitation plan comprised of upgrading the mine’s existing world-class infrastructure. This rehabilitation was completed in August 2018 when the mine successfully entered production.
New Century Resources is initially focusing on the existing ore reserves to produce zinc in the lowest cost quartile globally. Substantial mineral resources exist on the mining leases which will provide a significant opportunity for mine life extension and metal production increases from the mine’s operations.
The company had the first shipment of 11,000t of zinc concentrate to China.
The company has reserves of 2.3Mt zinc and 29.7Moz silver (77.3Mt at 3.1% ZnEq) The projected mine life is 6.3 years based on the Reserves only.
Market Capital: 365M
Outstanding Shares: 504M (06/2018)
Top 20 Shareholding: 59.6% (2018)
In my research, I found this company, and I was very intrigued by the information. I do wonder how this project will get developed, but the numbers are imposing so if they get this project up, I am sure it will be a good value adding exercise for the shareholders.
Ironbark Zinc is aiming to develop its 100%-owned Citronen zinc-lead project in Greenland, which has a significant resource of 132Mt at 4.4% zinc and lead – equating to about 12.8 billion pounds of zinc.
The Citronen Zinc-Lead Project represents one of the world’s most significant undeveloped zinc-lead resources with a resource of more than 13 billion pounds of contained zinc and lead metal. The project is located in northern Greenland, a self-governed part of the Kingdom of Denmark and has a low level of sovereign risk.
To date, there has been more than 67,000m of diamond drilling at the Citronen Project. Citronen is a sedimentary exhalative (SEDEX) deposit- a potentially large type of deposit. The mineralisation at Citronen starts from the surface, is flat lying and is currently open in almost all directions. The deposit is adjacent to a deepwater fjord that may provide near mine ship docking and loading opportunities.
Highlights of the Feasibility Report included:
NPV8: US$1,034 Million (US$909M post-tax*)
IRR: 36.0% (35% post-tax*)
Capital Cost: US$514 Million**
Large Scale Production: 3.3Mtpa Mine Rate/Production up to 200,000tpa zinc metal
Site Cost: US$0.52/lb Zn (Payable, Net of by-product credits)***
Mine Life: 14 years (open-ended and with further inferred resources that could potentially be converted to reserves)
Life of Mine Revenue: US$6,364 Million
Life of Mine Operating Costs: US$3,025 Million
Life of Mine NPAT: US$1,836 Million*
The current JORC 2004 compliant resource for Citronen is:
Market Capital: 21M
Outstanding Shares: 638.2M (06/2018)
Top 20 Shareholding: 43%
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