Paradigm boosted the junior developer's rating to a "buy" from a "speculative buy" previously, saying Rathdowney should gain more attention going forward as a "recognized player in the junior zinc space."
This will especially be the case if zinc prices improve in conjunction with the potential announcement of a preliminary economic study for Olza in the first half of this year, said Paradigm analyst David Davidson.
Earlier this year, Rathdowney released a resource estimate for Olza of 24.2 million tonnes grading 5.5% zinc and 1.5% lead, representing some 3.0 billion pounds of zinc and 800 million pounds of lead.
"On a zinc resource basis, the stock is one of the most inexpensive in the sector; consequently, Rathdowney offers investors early-stage exposure to an outstanding project likely to grow quickly in size," wrote Davidson in a note released to investors on March 25.
"In addition, we believe that Rathdowney would be an attractive M&A target," he added.
The Paradigm report is based on the firm's recent visit to Rathdowney's Olza project, where it met with the company's development team and toured the nearby Pomorzany mine complex, which has been continually producing zinc since 1974 and is rumoured to be nearing the end of its known mineral reserve base.
In fact, Paradigm said the best days are behind the Pomorzany mine, and the current plan is to continue to operate until 2017.
This is no doubt an excellent situation for Rathdowney to capitalize on, with Pomorzany being part of the same Upper Silesian zinc-lead district in Poland as Olza. This is an area known for its Mississippi Valley-type zinc lead deposits, which have been mined here continuously since the 12th century, producing some 16 million tonnes of zinc and 4 million tonnes of lead.
Paradigm's Davidson also highlighted the company's "excellent" metallurgical results, with tests completed in 2013 showing recoveries for both metals approaching 90 percent.
On top of all this, the Olza project is known for its blue sky potential, as mineralization extends over a strike length of about 10 km, most of which has not yet been explored using modern methods, Paradigm said. A total of approximately 180,000 metres of drilling, up until June 2014, were used to establish the current resource model.
Olza, which covers three exploration concessions --- Zawiercie, Rokitno and Chechlo --- is spread over an area of 150 square km and is just one hour away by vehicle from Krakow.
As it is just 30 km north of the large operating Pomorzany underground mine, it is also nearby a railhead with access to concentrating and smelting facilities, and is well serviced with an experienced labour force. There are a total of five historical mines along the same belt.
Paradigm said it is expecting a robust preliminary economic assessment from Olza in the coming months, which is anticipated to illustrate the economic potential of the project, representing a major catalyst for the stock.
"The site visit to the nearby Pomorzany mine provided a unique opportunity to assess the continuity of the mineralization, the mining method and most important ground conditions in a decades old mine," said Davidson.
"We now have a high degree of confidence that [the Olza] project is progressing smoothly along the development path. The release of the pending PEA will go a long way in providing the data required to more firmly establish the outstanding value of the Olza project."
The Pomorazany mine currently uses the low-cost room-and-pillar mining method, which generally provides extraction rates of 75 percent, and on second pass, up to 90 percent, according to the report.
Paradigm has a 75 cent 12-month price target on Rathdowney, which closed Wednesday at 27.5 cents in Toronto.