Zinc Shows a Silver Lining as Exchange Stocks Fall to Lowest Level in Decades

With stocks on the three main exchanges (Shanghai Metals Market, COMEX and LME) at record lows, prices are expected to remain elevated, potentially changing the economics of zinc production for Blue Moon Zinc Corp. (OTC: BMOOF) (TSX-V: MOON) (MOON Profile), Hecla Mining Company (NYSE: HL), Teck Resources Ltd (NYSE: TECK), Glencore plc (OTC: GLNCY), and Trevali Mining Corp. (TSX: TV).

To everything, there is a season, two years ago, disinvestment and mine closures bedeviled the industry. In 2015, the Australian-Chinese concern MMG Limited (HKEX: 1208), announced the shuttering of its mining operations at Century in Australia. The Century mine was Australia’s largest zinc mine and the third largest in the world. In 2014, it produced 465,696 tonnes and accounted for around 3.5 percent of global zinc output. And in 2015, by the time mining ended in August, it had yielded about 345,000 tonnes of zinc in zinc concentrate after processing. Vedanta Resources also closed its Irish Lisheen mine in 2015. Lisheen was Europe’s second-largest zinc mine with a capacity of around 175,000 tons. Lisheen’s closure reduced global supplies by another 1.3 percent. And Glencore exacerbated the supply constraint after it announced it would cut output from mines in Australia, Peru and Kazakhstan totaling around 500,000 metric tonnes. This removed another 4 percent from global supply in 2015. Those supply cuts have been boosting prices ever since.

With the outlook on zinc in favorable territory, both senior and junior exploration companies are dusting off previously shuttered projects.

In a recent interview, Blue Moon Zinc Corp. (TSX.V: MOON) (OTC: BMOOF) CEO Patrick McGrath retraced the history of the Blue Moon, USA deposit, which dates back to the Second World War. From 1943-1945, the resource was mined by Hecla Mining Company, whose efforts produced 55,656 tons of 12.3% zinc. The mine lay dormant until the early 1980s, when Imperial Metals completed approximately 33,000 feet of diamond drilling. Thereafter, Westmin Resources, now Boliden, one of Europe’s largest zinc producers, undertook about 57,000 feet of diamond drilling, calculated a mineral resource and commenced engineering, metallurgical, hydrological and environment baseline studies. In addition, Westmin obtained a permit and approval of a reclamation plan from Mariposa County for a shaft and certain underground development. By 1991, the resource was in new hands: being explored by Barrick (Lac), who completed approximately 20,000 feet of drilling. Consequently, Blue Moon, USA stands on the shoulders of well-established and well-qualified operators, who have done a lot of the development work.

Blue Moon emerged from the amalgamation of asset disposals by two other junior exploration companies, the first deriving from Yukon Zinc, which had acquired the Blue Moon deposit from Boliden Limited. The second followed a 2007 spinout by Selwyn Resource of its zinc assets. The company, previously known as Savant Explorations Ltd, announced its name change to Blue Moon Zinc Corp on July 5, 2017 (http://nnw.fm/6DxmD).  

The Blue Moon project, located in Mariposa County, California, is estimated to have close to 375 million pounds of zinc in the indicated category, and about 400 million pounds on an inferred basis. A high recovery rate (95%) and its location in an area with well-developed infrastructure and access to labor and other resources gives Blue Moon, USA an indisputable commercial advantage over other junior zinc companies. Moreover, the management and advisory team includes two executives, Lutz Klingmann and Larry O’Connor, with extensive experience either building a mine from scratch or re-starting a mine and dealing with the regulatory process.

Lutz Klingmann is the former CEO of Golden Queen, who successfully permitted the open-pit, heap-leach Soledad Mountain gold mine in California. He brings extensive experience in permitting and building mines, including building the Minto mine currently owned by Capstone Mining Corp. (TSX:CS). Lawrence O’Connor is the former VP Operations at Western Goldfields (now New Gold) where he restarted the Mesquite Mine in California. He is also a former general manager of Eldorado Gold Corp’s La Colorada Mine and during his tenure there completed the feasibility study and permitting required for expansion. Blue Moon’s current CEO, Patrick McGrath, is a CPA-CGA (Chartered Professional Accountant), with 20 years of experience in financing and executive roles in junior public companies. As VP Finance of Adriana Resources Inc. (now Sprott Resource Holdings Inc.), he raised $50 million in equity and debt during his tenure. Together officers and directors hold close to 22 percent of Blue Moon’s equity.

Blue Moon also holds interests in the Yava Property in the Mackenzie Mining District, Territory of Nunavut, approximately 450 kilometers northeast of Yellowknife. The Yava Property consists of one mining lease of 1,304 hectares and 16 unpatented mineral claims that taken together cover 4,449 hectares.

The silver lining on zinc should galvanize Hecla Mining Company (NYSE: HL), which although primarily focused on silver and gold, unearths substantial quantities of zinc ore in its exploration activities. The company is a leading, low-cost silver producer with operating silver mines in Alaska (Greens Creek), Idaho (Lucky Friday), and Mexico (San Sebastian) and is a gold producer with an operating mine (Casa Berardi) in Quebec, Canada. Its Greens Creek and Lucky Friday mines have reported large proven and probable zinc reserves.

In zinc, as in general, the rich get richer. Top producer Glencore (OTC: GLNCY), with output of around one million tonnes of zinc concentrate annually, has struck ‘gold’ in its joint venture with BHP Billiton, Teck Resources and Mitsubishi. The Antamina copper pit in Peru appears to enclose zinc-heavy ore that has already produced an extra 60,000 tons of zinc over the past 12 months.

And Teck Resources (NYSE: TECK), the world’s No. 3 producer (Hindustan Zinc is at No. 2) continues its run of good luck. At its Red Dog operation in Alaska, the largest zinc pit in the world, a vein of hard-to-refine but zinc-rich rock with ore holding about 24 percent zinc (compared to 14 percent in the pit as a whole) has been discovered.

Meanwhile, Trevali (TSX: TV.TO) announced on August 31 it had acquired a portfolio of zinc assets from Glencore and some of its subsidiaries, which include an 80% interest in the Rosh Pinah mine in Namibia, a 90% interest in the Perkoa mine in Burkina Faso, an effective 39% interest in the Gergarub project in Namibia, and an option to acquire a 100% interest in the Heath Steele project in Canada.

As the global economy continues its rebound, the demand for zinc is forecasted to grow. The metal is mainly used to galvanize iron and steel to prevent rusting, essential in infrastructural projects. In addition, supply is way behind demand. In a June 2017 report, the International Lead and Zinc Study Group (ILZSG) found that the ‘worldwide market for refined zinc metal was in deficit during the first five months of the year while total reported inventories declined over that same time frame,’ according to Metal Miner (http://nnw.fm/qCp5K). It looks like zinc is starting to show its true color.

For more information on Blue Moon Zinc Corp. please visit:Blue Moon Zinc Corp. (TSX.V: MOON) (OTC: BMOOF) 

About NetworkNewsWire

NetworkNewsWire (NNW) is an information service that provides (1) access to our news aggregation and syndication servers, (2) NetworkNewsBreaks that summarize corporate news and information, (3) enhanced press release services, (4) social media distribution and optimization services, and (5) a full array of corporate communication solutions. As a multifaceted financial news and content distribution company with an extensive team of contributing journalists and writers, NNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. NNW has an ever-growing distribution network of more than 5,000 key syndication outlets across the country. By cutting through the overload of information in today’s market, NNW brings its clients unparalleled visibility, recognition and brand awareness. NNW is where news, content and information converge.

http://www.NetworkNewsWire.com
+1-212-418-1217 Office
Editor@NetworkNewsWire.com

Please see full terms of use and disclaimers on the NetworkNewsWire website applicable to all content provided by NNW, wherever published or re-published: http://NNW.fm/Disclaimer

DISCLAIMER: NetworkNewsWire (NNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. FN Media Group (FNM) is a third-party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated with NNW or any company mentioned herein. The commentary, views and opinions expressed in this release by NNW are solely those of NNW and are not shared by and do not reflect in any manner the views or opinions of FNM. Readers of this Article and content agree that they cannot and will not seek to hold liable NNW and FNM for any investment decisions by their readers or subscribers. NNW and FNM and their respective affiliated companies are a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, NNW, FNM, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

NNW & FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE. 

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements.  The forward-looking statements in this release are made as of the date hereof and NNW and FNM undertake no obligation to update such statements.

About IBBN

Over the past 10+ years we have consistently introduced new network brands, each specifically designed to fulfil the unique needs of our growing client base and services. Today, we continue to expand our branded network of highly influential properties, leveraging the knowledge and energy of specialized teams of experts to serve our increasingly diversified list of clients.

Please feel free to visit the Investor Based Brand Network (IBBN) http://www.investorbasedbrandnetwork.com

Media Contact:
FN Media Group, LLC
editor@financialnewsmedia.com
+1-954-345-0611