Investment firm Raymond James said it expects to see a substantial appreciation in the price of zinc over the next few years as approximately 10% of world mine supply ceases production due to ore reserve depletion.
A reduction in the supply of zinc will drive the spot price to US$1.30 per pound in 2016 from the current US95 cents per pound level, Raymond James said in a report.
The following is a report on three companies that delivered impressive intersections of zinc in drilling results this week.
Pasinex Resources Ltd. (
CNQ: C.PSE,
Stock Forum), was unchanged Friday after announcing drilling results from its 50%-owned Pinargozu zinc-lead project in Turkey, an area that is known to host a number of small zinc-lead deposits, most of which were mined as zinc-oxide deposits.
That leaves Pasinex with a market cap of $9.9 million, based on 70.7 million shares outstanding. The 52-week range is 16 cents and 3 cents.
On being introduced to the Adana region in south central Turkey in early 2012, Pasinex said it became clear that it had the potential to host much larger oxide and sulphide zinc deposits, but that most had never been systemically explored for such deposits, using modern exploration methods.
As a result, Pasinex agreed to form a joint venture with Akmetal, the historical operators of the Horzum mine, which operated from 1974 to 1982, producing 4.2 million tonnes of oxide ore, grading from 20% to 30% zinc (non NI 43-101 production figures). The purpose is to explore the region for large lead/zinc deposits.
Last month, Pasinex started a Phase 1 drilling program on the Pinargozu zinc-lead project, a small historic marble-hosted zinc oxide mine located in steep topography along strike from the Horzum mine.
This week, the company said results from a borehole intended to test the depth extent of massive mixed oxide/sulfide zinc-lead-silver mineralization exposed on the 707 level of the Pinargozu prospect, included a promising intersection of 39% zinc and 85.5 grams per tonne silver over 16.8 metres in a total 24.80-metre drill length.
“The fact that Pinargozu mineralization is open at depth and at the same stratigraphic level as the Horzum mine, bodes well for the prospect of finding a deposit of a similar scale at Pinargozu,’’ said Pasinex CEO Steve Williams in a press release.
Sierra Metals Inc. (
TSX: T.SMT,
Stock Forum) rose 1.2% to $1.70 Friday after Sierra announce the completion of its first phase of deep drilling at the Yauricocha Mine in west central Peru, where drill crews are attempting to expand known mineralization at depth and explore other high potential regional targets.
Current trading levels leave Sierra with a market cap of $270.6 million, based on 159.2 million shares outstanding. The 52-week range is $2.55.
The company announced Friday the completion of its first phase of deep drilling at the Yauricocha Mine in west central Peru, where drill crews are attempting to expand known mineralization at depth and explore other high potential regional targets.
Ore from the mine is extracted from three different types of deposits which include the following:
- A polymetallic deposit, containing silver, lead, copper and zinc.
- A copper deposit, containing copper and silver.
- A deal oxide deposit, containing silver gold and lead.
Exploration projects at the site are grouped, based on proximity to the mine area and include the Central Mine Area, Near Mine Target Areas and Regional Early Stage Exploration Areas.
Sierra said the five deep holes completed in Phase 1 intersected mineralized zones as planned. The company said highlights included three additional deep holes on the Catas and adjacent Antacaca orebodies, which are located in the Central Mine Area. All cut wide zones of high grade mineralization.
Drill hole CAT-14-14-03 in the Antacaca orebody, for example, cut 3.95 metres, true width, averaging 16.74% zinc, 58.5 grams per tonne silver, 0.23% lead, 0.64% copper and 0.56 grams gold per tonne.
The company said the latest results demonstrate that potentially economic mineralization in the Central Mine Area continues at much greater depth than previously known. The potential to extend Yauricocha’s mine life in this area is greatly enhanced by these results, and further drilling in this area is planned, the company said.
Trevali Mining Corp. (
TSX: T.TV,
Stock Forum) eased 0.98% to $1.01 after releasing an update on the progress of ongoing drilling activities at the Stratmat polymetallic deposit in the Bathurst mining camp in New Brunswick, releasing new assay results for 8 drill holes.
Current trading levels leave Trevali with a market cap of $282.1 million, based on 279.3 million shares outstanding. The 52-week range is $1.20 and 49 cents.
Trevali provided an update on the ongoing drilling activities at the Stratmat polymetallic deposit in the Bathurst mining camp in New Brunswick, releasing new assay results for 8 drill holes.
These drill holes successfully intercepted high-grade massive sulphide lenses in the S1 Zone, all of which remain open for further extension.
Analyst Adam Low of Raymond James said the latest drill results are encouraging, with assay grades coming in well above the current inferred resource estimate for Stratmat (5.5 million tonnes, grading 6.1% zinc, 2.6% lead, 0.40% copper, 54.2 grams per tonne silver, and 0.60 grams per tonne gold.
Trevali continues to advance studies on its Halfmile and Stratmat projects in order to determine if they will support a second stand-along milling facility at the Bathurst Mining Camp separate from the Caribou Mine and Mill Complex.
The Stratmat property is located 45 kilometres southwest of Bathurst, and covers 828.6 hectares and 54 claims.
FULL DISCLOSURE: Sierra Metals and Trevali are Stockhouse Publishing clients.