| No Risk, No Reward
It would be ignorant to ignore the risks in any exploration play - even one as advanced as Canada Zinc Metals.
The price of zinc is the obvious risk, but if you believe in its fundamentals, this shouldn't be an issue.
So the first risk for CZX is the need for additional metallurgical testing. But thus far, initial results suggest a clean concentrate (no deleterious elements) with acceptable zinc recoveries.
And here, management has told me that they plan on doing more in the coming year.
With that additional metallurgical testing, CZX can then move forward with a Preliminary Economic Assessment (PEA) so that we can better understand the economics of the project.
Based on the grades and style of mineralization, none of the above should pose any serious risks, but they need to be addressed.
The further CZX moves next year with eliminating those risks, the higher the chance it becomes an immediate takeover target - especially if the current zinc deficit continues as expected.
Lastly, CZX has a current cash balance of over $5 million. That's a lot of money for a junior, but CZX isn't just any junior.
If CZX wants to keep a healthy balance sheet, make new discoveries, and remove the risks I just mentioned, it's going to have to raise money.
Luckily, management has been more than capable of this in the past.
In fact, not only has the Company never financed below $0.40, its been able to finance the Company at a 100% premium to market with two of the world's largest zinc players just a few years ago.
I suspect a future financing will take place, but I don't believe management will do it below $0.40 - they never have before.
If that is the case, investors participating at current levels will likely be protected from paying more than the next round of financiers.
Lastly, its important to note that if the zinc market collapses, for whatever reason - unlikely given the supply deficit - CZX doesn't have to spend another dime until 2025 to maintain the entire land package - it's already spent all the money required to do so.
Conclusion
I know this has been a lot to take in.
However, I want you to be fully aware of the potential that Canada Zinc Metals provides and the amount of research I have done uncovering this opportunity.
This isn't just another junior or short-term trade - this has the potential to become something massive.
Canada Zinc Metals' Cardiac Creek deposit is a tremendous flagship asset with a Zn/Eq resource of nearly 30 million metric tonnes - with 71% of the resource in the indicated category.
The deposit is fully permitted for surface and advanced underground exploration, and all of the claims are in good standing without spending another dime until 2025.
Then they also have the upside of nearly 70,000 hectares of mineral claims in the Kechika Trough area, while owning 100% of all the assets.
The Company has significant investment from some of the world's biggest mining companies.
I don't know of any junior - let alone one in the zinc space - that has three major mining groups as shareholders.
And lastly, upside also exists in that there isn't one analyst covering the story...yet.
Last year, I introduced a gold producer at $0.82/share, shortly before it received coverage from analysts.
Over the next year, analysts began to cover the story and the stock climbed to over $5/share.
This was for a company in a sector where the underlying commodity climbed just 24% from its lows.
Zinc is now up 73% from its lows.
What could that mean for Canada Zinc Metals if analysts begin to cover the story?
The growing supply deficit for zinc is real and institutions are still looking for zinc assets to invest in.
And I believe Canada Zinc Metals represents one of the most undervalued pure zinc explorers in the market today.
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