2017 was a banner year for base metal miner
Pasinex Resources Ltd. (
CSE: PSE,
OTCQB: PSXRF,
Forum) and the Company expects to utilize that success to double its numbers this year.
The Company is unique in that it is already in production and using its revenue to fund further exploration. Over the last two years, zinc prices have strengthened to around $1.50 per-pound, from 75 cents three years ago.
In 2017, PSE brought 60,000 tons into production at its 50% own Pinargozu Project, an underground zinc mine in the south of Turkey, yielding robust zinc results of 32%. Discovered in 2013, this producing mine employs roughly 260 workers and brought in roughly $25 million (USD) last year. The Company used these earnings to fund $3 million toward the exploration of its Akkaya Project next door in the Taurus mountains, with a plan to start drilling later this year. It also dedicated $1 million toward the exploration of its Gunman Zinc Project in Nevada.
Pasinex has brought a new member on-board to the team – VP of Exploration John Barry, to lead crews exploring assets in Turkey and Nevada.
Stockhouse Editorial recently caught up with the President and CEO of Pasinex, Steve Williams, to find out more about the Company’s “big picture” vision for the next year as it digs deeper to grow its business.
1) Where do you see zinc prices heading in the near future and what effect do you predict this will have on business?
I see 2018 as being another strong year for the zinc price. I think we should average something around $1.50 US / lb. I don’t think there is a lot more upside on the zinc price, but I do think that we will have a strong price which will be great for producers like Pasinex.
Pasinex is, I believe, already in the lowest quartile of zinc producers on a cost base. That is because we have such a high-grade ore. Any increase in the zinc price goes straight to the bottom line. So, a zinc price of around $1.50 US / lb. is very strong for Pasinex. We will see very strong profitability and cash generation resulting from such a strong zinc price. I expect 2018 to be probably our best year yet.
2) What are the expectations for the Akkaya Project? Similar to the output coming out of Pinargozu?
Akkaya property is right next to Pinargozu. It is due north from Pinargozu on the overall mineralization trend (which runs north / south). The trend is controlled by the main fault system which is a north / south fault line. We believe that Akkaya is very prospective for finding more zinc.
We plan to explore and drill in Akkaya in 2018. We are already getting ready for this and getting into the field there. We should drill there sometime around mid this year. I look forward to this exploration program at Akkaya because we think there is a strong chance to find more zinc, of the same type of mineralization as Pinargozu, at Akkaya.
3) How about the Gunman Project in Nevada? How much zinc do you forecast from there?
We are excited by the exploration potential of Gunman. We will be in the field there this year and we plan to be drilling there as well this year. Gunman is an early exploration prospect. We have to do a lot of the basic geological mapping to start with. We believe it has a good opportunity to show good zinc mineralization, but it is too early yet to forecast how much zinc might be there.
4) How comparable is the Gunman Project to the landscape of Turkish projects?
We like Gunman because we think it is a strong opportunity for zinc mineralization. One of the things that attracted us to Gunman was the fact that we believe that it is the same type of geology as that which we have in Turkey and specifically in Pinargozu. This type of zinc mineralization is called a carbonate replacement type deposit.
The immediate and obvious advantage of having what we regard as the same type of mineralization is that we can apply our “learnings” from exploration at Pinargozu to our exploration effort in Gunman. This is a significant step up in our exploration thinking and planning. Looking for these types of mineralization has some challenges particularly because they are structurally controlled. Having experienced this in Turkey will bring some strength to our exploration at Gunman.
5) The Company’s new VP of Exploration, John Barry, is a well-known name in the geology space and a respected authority on zinc exploration, what will his role entail with regards to work going on in Turkey and Nevada?
John Barry is a strong zinc explorationist. He brings real strength to the role of VP – Exploration for Pasinex. He will lead our exploration effort both in Turkey and in Nevada. John is already engaged in this role and already having a strong impact in terms of driving our exploration programs. We continue to look and think and try to innovate. John is front and centre on this role.
6) What has Pasinex learned from exploring and developing the Pinargozu Project that can be valuable knowledge when digging into the Gunman Project?
These types of carbonate replacement systems are structurally controlled – controlled by the faults. The first priority is to really understand the structural geology of the area that one is exploring in. Then the rest is about a strong understanding of the basics of geology. Specifically, the lithology and alteration. In this case the mineralization occurs in limestone, but one must also understand the subtle differences in types of limestone. Finally, one needs to use other tools to help exploration and in particular geochemical methods and certain geophysical methodologies.
7) What further zinc is expected deeper into the Pinargozu Project?
Carbonate replacement type zinc deposits (CRD) are manto type structures. There are a number of these type of CRD deposits in Mexico. There these manto structures can run up to 5 kilometers long and deep.
Pinargozu is a new discovery and as such we are still early in our exploration effort. We are down maybe around 300 – 400 meters so far. So still very early! Based on a Mexican CRD model we think there is much more to be found. So, our exploration effort is on trying to find the deeper roots of this manto system. We think as we go deeper we should also be able to find more sulphide mineralization as opposed to the predominantly oxide mineralization that we currently have. The challenge we face in the exploration is that the system (The manto’s) are controlled by the faults. So, the mineralization “moves” on us. Nevertheless, we are systematic and learning how to follow this mineralization as we probe deeper.
8) Can you explain the JV relationship with Turkish mining house Akmetal?
The Joint Venture has been fundamentally critical to us being able to develop the Pinargozu mine and resource as fast as we have. Both parties bring key strengths to the partnership. Our Turkish partners Akmetal bring mining skills (building a mine), Turkish connections and just wherewithal to get things done. Pasinex bring technical skills and business management strategy and operating skills. These are complementary and crucial skills for building a mine. The partnership works as a true partnership. The parties must agree on what it was we are doing. Sometimes we agree implicitly and sometimes we disagree. When we disagree, we need to try to understand why and work through our different perspectives to find the right compromise. It is a commitment and a constant process, but the rewards can be seen. We have collectively built a great mine at Pinargozu.
9) Pasinex wants to move from being a Junior to Mid-Tier miner, what is the timeline on this growth and what is needed to get the Company there?
You build a mining company one mine at a time. You go from a Junior to a mid-tier after you have built several mines. To me it is just a process of finding the right projects and executing on project development. That is what Pasinex is about! It is impossible to give a time frame on this, but we should make progress on this front each year. As long as, we progress each then we can get to the vision of the mid-tier company.
10) Looking ahead to the rest of 2018, what are Pasinex’s priorities?
This year is about exploration for Pasinex. We will spend a lot more money on exploration this year than any year prior. The JV in Turkey plans to spend over $3M USD on exploration. There are a couple of top priorities in Turkey. The first is that we must continue to grow our resource at Pinargozu. The second priority is to start drilling on the nearby property of Akkaya. We think that property is prospective for encountering more zinc.
We also plan to spend about $1M CAD on exploration at our newly acquired option property of Gunman in Nevada.
At Pinargozu we expect to mine and sell another 60,000 tonnes of DSO product in 2018. That should continue to give us a strong profitability this year and generate future positive cash flows.
These are our 2018 priorities.
FULL DISCLOSURE: Pasinex Resources Ltd., is a paid client of Stockhouse Publishing.