Mining group Ferrum Crescent (LON:FCR) has undergone a metamorphosis this year, switching from iron ore in Africa to a zinc and lead project in Spain.
Up until recently its main interest was the 97% it owned in the Moonlight iron ore project in South Africa, but as has been well documented that commodity has crashed in recent years.
Ferrum’s 2016 focus has been an option deal with firm GoldQuest Iberica, which owns interests in the Toral and Lago lead-zinc exploration projects in northern Spain.
Toral is in Leόn and Lago is in Galicia - two historic Spanish mining areas.
At Toral "a simple and highly-focused" work programme has now kicked off.
A very 'exciting new avenue'.
Speaking to Proactive, executive chairman Justin Tooth said Toral was excited due to its exposure to zinc.
"The great call that Ferrum Crescent made at the beginning of the year was to look at that particular mineral based on a hypothesis we had about the supply, and the demand, and the trends and where the price would go," he said.
It lies around 400km north-west of Madrid and hosts road, rail and power.
Zinc a strong performer in 2016
Zinc has been one of the strongest performing metals in 2016, rising 50% from US$0.70 per pound at the end of 2015 to US$1.15 recently, while demand fundamentals have been improving.
Lead has also performed well this year and the prospect of big infrastructure spending by newly elected Donald Trump has also buoyed metals like zinc, which is linked to steel making.
At Toral, a 2011 Canadian standard NI 43-101 report showed inferred and indicated resources of 8.71 million tonnes (Mt) at an economic cut-off grade of 7% for lead and zinc, but that was largely based on a buried resource 300-500m in depth.
New drill plan for Toral
Ferrum is now working on a revised model and a drill plan focused on high-grade ore, which is nearer the surface and not been tested, so an "intelligent" drill plan can be decided, earmarked to begin in 2017.
Its geologists believe that the main mineralised zone is not just one plane, but that there are several parallel zones as well as further cross cutting structures.
Project advisor Merlin Marr-Johnson said: "Our job now is to delineate an economic resource and then take it forward."
Notably, a smelter owned by Glencore lies around 200km away from the project, which could represent an obvious process route for Ferrum's zinc.
Next steps are for more detailed exploration work starting with re-mapping, re-logging historic drill core, in-fill surveys over the main prospect area and structural mapping of the existing adits and outcrops.
And Lago to come
The Lago project lies 54km to the north-east of Toral and previous drilling saw 29 out of 37 holes hit zinc and lead and the firm is targeting this site as the nex to work on. It lies not far from Teck's formerly producing Rubiales mine,
One previous 9.5 metre intercept graded 9.54% combined lead and zinc and 7.5 metres graded an even tastier 14.75%.
Ferrum says it hopes to start exploration at the site early next year.
What about Moonlight?
There has not been much recent newsflow about this project in South Africa, which has a 2012 JORC compliant resource of 307.8 million tonnes (Mt) at 26.9% iron, with 52.6 Mt at 31.3% iron in the highest confidence category - the measured.
Tooth said that he hopes to make a statement about the progress of this project before the end of the year.
Shares in Ferrum are up 2.22% on the day (Novenber 21) to stand at 0.23p each.