Danny Deadlock re: CZXMonday January 29, 2018 | www.tickertrax.com | Previous Issues As Zinc Rises, CZX.V
Estimates 5.3 Billion Pounds By Danny Deadlock, TickerTrax Canada Zinc Metals (CZX: TSXV 37 cents) - www.canadazincmetals.com Shares Outstanding: 167 Million Net Cash: approx. $6 Million
January 2nd I featured CZX at 27 cents and while we are currently up 37%, I continue to believe this has takeover potential in 2018/19. CZX is partnered with Teck, Korea Zinc and Tongling Nonferrous Metals Group (ranked No.6 in the world for copper cathode production). Two other International mining companies have recently signed confidentiality agreements with the company.
This morning they released an updated resource report that increased the total estimated zinc on their Cardiac Creek deposit to 5.3 Billion pounds. They also confirmed the project has futher expansion potential along strike and at depth.
Zinc itself continues to face supply issues and there is nothing on the horizon that says this will change. In fact, there is (was) a significant storage of zinc sitting in a large warehouse in New Orleans that was factored into the LME Warehouse network. Traders just found out that a large percentage of this zinc is corroding from the floods years ago and cannot be factored into global inventory stats (that determine the value of zinc). No doubt this has been an issue for a while, but whoever owned it, kept it conveniently quiet.
The following graphic is from January 18th and showed global storage was down to 10 days (supply vs. demand). I hear this week they are estimating 7 or 8 days (likely affected by New Orleans – or at least partially). Longer term the supply / demand imbalance looks like this…
As I noted earlier in the month, CZX owns a “District Scale” Zinc project in British Columbia. The 5 million pounds of zinc that they are currently reporting, is only on a small portion of this property (shown in yellow below). Large mining companies (existing zinc producers in particular) will be looking for high quality projects to put their growing cash-flow to work. And CZX makes perfect sense as a (potential) acquisition target.
CZX Corporate Presentation: https://www.canadazincmetals.com/_resources/presentations/CZX-Corp-Pres-Nov-2017.pdf
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