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Zinc prices remain at near eight year highs; ASX players

Over the past month, zinc has touched an eight year high.

Over the past month, zinc has touched an eight year high.

Over the past month, zinc has touched an eight year high, trading over US$2,800 per tonne.

Currently at US$2,560 per tonne, zinc remains one of the top performing commodities in 2016 as the markets supply/demand balance has tightened dramatically.

The market was in a deficit through the first 10-months of the year, and official data is expected to show the deficit continued through the year.

Refined zinc metal usage increased this year at the same time that supply cutbacks caused a drop in production.

Even with the zinc price rally in 2016, major zinc miners such as Glencore are expected to proceed cautiously with any attempt to ramp up mine production.

While cutbacks in production have lowered the metal’s supply, an increase in demand has also been a contributing factor to the price rise.

In 2016, China’s increased infrastructure spending boosted demand for the metal used in galvanising steel.

Expectations are that China’s infrastructure spending will continue through the first-half of 2017.

Zinc uses

Zinc is currently the fourth most widely consumed metal in the world after iron, aluminum, and copper.

It has strong anticorrosive properties and about one-half of the zinc that is produced is used in zinc galvanizing, which is the process of adding thin layers of zinc to iron or steel to prevent rusting.

Galvanised steel is used for car bodies, street lamp posts, safety barriers and suspension bridges.

The next leading use of zinc is as an alloy; the zinc is combined with copper (to form brass) and with other metals to form materials that are used in automobiles, electrical components, and household fixtures.

ASX zinc players

Red River Resources (ASX:RVR) is in the process of restarting the Thalanga Zinc Project located in central Queensland.

The Thalanga Zinc Project Restart is based on mining three deposits, West 45, Far West and Waterloo.

The proceeds of the recent $30 million placement will be used to accelerate the development of West 45, finalise the design and commence initial development of Far West and also commence activities at Waterloo.

Red River is also fully funded to aggressively continue its infill drilling and Thalanga high impact exploration program.

Argent Minerals (ASX:ARD) is currently drilling at the company’s flagship project at Kempfield, New South Wales which hosts 200,000 tonnes of zinc.

The Kempfield volcanic-hosted massive sulphide (VHMS) project provides investors with exposure to both precious metals being silver and gold together with base metals zinc and lead.

The current diamond drilling program is 1,600 metres and the first hole commenced in late November.

Drilling is targeting potential silver, gold, lead and zinc mineralisation extensions identified by recent drilling.

Silver City Minerals (ASX:SCI) has a focus on the Broken Hill and Cobar regions of Australia, both infrastructure rich productive mining camps.

It has a large 1,200 square kilometre tenement position in the Broken Hill region where it is exploring predominantly for lithium and zinc.

Assays from two recently drilled holes at Razorback West near Broken Hill are pending and preliminary interpretation observed minor lead and zinc sulphides.

Greenland Minerals and Energy (ASX:GGG) aims to develop one of the world’s largest resources of rare earth elements, which also contains substantial resources of uranium and zinc.

Greenland Minerals recently formed a strategic relationship with a subsidiary of Shenghe Resources Holding Co Ltd (SHA:600392).

Shenghe is a leading rare earth company with experience in all parts of the rare earth industrial chain including mining, beneficiation, metallurgy, separation, downstream processing and marketing.

The fundamental objective of both parties is to develop the project in Greenland as a cornerstone to new supply networks.

Top End Minerals (ASX:TND) recently acquired the option to purchase a 60% interest in the Longh Keng zinc mine and Lashio zinc refinery in Myanmar for US$43 million.

The 8 square kilometre mining lease hosts two high grade zinc outcrops, collectively containing a non-JORC inferred resource of circa 171,194 tonnes grading 36.84% zinc.

The refinery plant currently produces 10,000 tonnes of refined zinc per annum and is the only modern zinc refinery within Myanmar’s prospective zinc and base metal province.

The assets are held by Cornerstone Resources (Myanmar) Ltd and Top End has paid an upfront non-refundable deposit of US$500,000 for the nine-month option agreement.

Sovereign Gold Company (ASX:SOC) (currently being renamed Force Commodities ASX:4CE), recently intersected more high grades of zinc and lead in its final round of assay results from drilling at the 100% owned Halls Peak - Gibson project located in New South Wales.

Intersection from the six holes drilled included:

- 43.30 metres at 5.06% zinc and lead, 0.98% copper, 23.79 g/t silver, 0.14 g/t gold;
- 47.60 metres at 3.91% zinc lead, 0.48% copper,10.92 g/t silver, 0.07 g/t gold; and
- 102.3 metres at 4.40% zinc and lead, 0.39% copper, 88.94 g/t silver and 0.26 g/t gold from surface.

The third phase of drilling at Halls Peak will be expedited for early 2017 and will target a maiden JORC resource with potential additional extensions to the mineralised high-grade zones.

Ironbark Zinc (ASX:IBG) is currently advancing project development and funding for its flagship 100% owned Citronen zinc-lead project located in Greenland.

The project has a current 2012 JORC resource of 70.8 million tonnes grading 5.7% zinc and lead, which represents over 13.1 billion pounds of zinc and lead.

This gives Ironbark the opportunity to develop one of the world’s largest zinc mining operations.

The company was recently awarded a mining permit at Citronen, a major milestone in the project’s advancement, as it gives the company the right to exploit the project for a 30 year period.

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