5 Companies to Watch in This Critical Metal Boom - (TSX: $TV. TO),
(TSXV: $Z.V, $ZZZOF), (TSX: $CZN.TO, $CZICF), (TSX: $LUN.TO, $LUNMF), (NYR.EN, $NYRSY)
By Brandon Dempster
The clear supply deficit in zinc has really opened up an
opportunity for investors with the need for global diversification. There are
very few pure play zinc companies in the world, however a few stocks have begun
to take a direct correlation to zinc futures over the past couple of years,
serving a vital need.
One of the key drivers behind zinc’s price success over the past
couple of quarters has been rapidly declining inventories. These inventories,
currently under 350k mt, have been declining for the last five years. This has
been due to demand exceeding supply by a few percentage points every year since
2012, but now, that gap has widened to approximately 7.7%.
#2 Zinc One (Z.V, ZZZOF)
Listed on the Toronto Venture Exchange and the pink sheets in the
United States, this high volume penny stock has really come up on my investing
radar as of late. In reference to that high volume, it’s quite rare for an OTC
stock to trade with great liquidity, but Zinc One is the exception with nearly
a 500k average daily volume. The stock is quite simple to understand in that it
is one of the few stocks in the global markets that directly tracks the price
of zinc, which allows investors an affordable exposure to zinc prices, rather
than trade in the futures market.
Mid 2017, Zinc One completed the Forrester acquisition and this gave the
company a unique catalyst: a past producing high-grade zinc mine and
highly prospective adjacent concession with drill proven blue sky. While the
potential for reactivation of the past producing Bongara Zinc Mine Project is
still a few years away, the company has a lot of expected news flow that makes
it worth investing in now. On top of this, further drilling on the adjacent
Charlotte Bongara could yield further exceptionally high grade on surface drill
results to further excite the market. Located in Peru, the Bongara Zinc Mine
Project and Charlotte Bongara are the two zinc-oxide projects, that were
acquired in the deal with Forrester and their grades are some of the highest in
the world. Right now, the company is planning a drill program to update and
likely increase the historic resource estimate in place. An event like this is
sure to excite the market in the near term.
Zinc One, too, is oversold right now, according to momentum
indicators, creating an ideal entry point for investors seeking high-quality
zinc exposure in their portfolio.
Perhaps one of the most interesting details about this mine is
that the deposits sit at surface and easily accessible for open pit mining as
shown by past production. The company’s Bongara Mine Project is roughly 8,000
hectares and another 3,115 hectares on the Charlotte Bongara, which means
the company holds a massive footprint.The Bongara Mine Project is subject of a
historic resource estimate that the company strongly feels it can increase with
a more thorough drilling program than what was done by the previous operator.
The company can also continue to scale as there is exploration potential over 4
kilometers between these two projects.
lOne of the notable goals of this Company is a thirty six month
timeline to put the Bongara Mine Project back into production. The first steps
in doing this are the completion of the previously mentioned updated technical
report followed by a preliminary economic assessment planned for the end of Q1
2018.. Initially, the company is waiting on permits for up to 300 drill
platforms to begin this work. . A company with such aggressive goals, backed by
an expert management team, is a high quality, calculated risk, in my opinion.
The 20% plus grades seen at the Bongara Mine Project are some of the
highest in the world soon making the company one of the highest grade producers
in the world. As Zinc One moves this project forward and closer to production,
shareholders should expect a significant return of value. Below is Zinc One’s
past producing Bongara Mine Project with at surface high grade zinc
mineralisation.
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Disclosure - Zinc One (TSXV:Z)(OTC:ZZZOF) is a featured mining PR, news and
social media client for June 2017 - one month : five thousand per month via ad
agency
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