Tuesday, February 16, 2010

Canada Zinc Metals Equities & Economics Report CZX.v, TNR.v, HUD.to, LUN.to, FCX, BHP, RTP, TM, BLS.to, TCK

"Canada Zinc Metals CZX.v will be another example of Chinese expansion into Canada.
Canadian Juniors will be the most exited public with all recent developments, interesting to note, that sector is building reversal which is more aggressive than USD and Gold pace of changing direction - we have a bullish candle and Free White Soldiers, bullish reversal will be confirmed with crossing MA50."

Canada Zinc Metals CZX.v will be our candidate for this trend. Company stock builds a Double Bottom Reversal at this moment after recent slide down with the soft general market, news from China about solid economic growth should ignite excitement again. Any corporate action will be the catalyst for this stock to regain its upside momentum.

Victor Goncalves

Equities & Economics Report

Canada Zinc Metals

Recent Price: 52 cents
Shares outstanding: 91,991,414
Working Capital: 4.5 million dollars

Since, the alert, the share price has moved up and come back a bit with the market pull back. This has created a bit of an opportunity to get some cheaper stock.
The world’s largest zinc deposit is running out of ore. The second largest mine has cut production due to margins. The fact is, that ratio is in favor of a shortage vs. a surplus of zinc, and that is why Tongling Nonferrous Metals Group is so interested in the deposit that Canada Zinc Metals has been busy working on and expanding for the past couple of years. The deposit that Canada Zinc Metals has come up with to date is quite impressive. 23.6 million tonnes grading 7.60% zinc, 1.50% lead and 13.0 g/t silver. The silver component is attractive. It needs to be said, that there is still plenty of potential in terms of deposit expansion. It is still unknown how big this could get, but what makes this very attractive right now to groups like Tongling, is that there is plenty of ore as it is, the grades are good, and the infrastructure is great. Not only is it great, but it actually exists. So many great deposits run into “the boonies” problem and they become a little less attractive, the Akie project doesn’t have that problem. They are in close proximity to a deep sea port (Prince Rupert), road (full access to the deposit), power (largest Hydropower facililty in British Columbai) and a near by town (Mackenzie) with an existing railway – all of which makes the development of the deposit much more feasible and less expensive. I would wager a bet that the Tongling is particularly impressed with the deep sea port access that allows the concentrate to be shipped right to its smelters on the Yangtze River.
When I first spoke to the president of Canada Zinc Metals, Peeyush Varshney, he told me that the level of interest by Tongling was (and continues to be) considerably high. So much so that the last investment Tongling made in this company was at twice the share price at that particular time. That level of “premium” (a 100%) is not a common event at all. Just to take economics into consideration, the size of the Akie deposit as it stands currently suggests in the neighbourhood of 4 billion pounds of zinc, and just over half a billion pounds of lead. I would wager that the silver would probably be treated as a credit. I would guess that the insitu value of this project would be somewhere around 500 million dollars as it stands - so it is clearly undervalued.
I would get into the details of the deposit but they are quite straight forward. It is just a question of how much bigger will the deposit be. In my opinion, one of the reasons for this success story lies in the capacity of the management. Peeyush Varshney, and his group, do an exceptional job at managing this company and after some further due diligence, it appears that a majority of what they touch turns out to be successful. This makes me quite comfortable with the company.For more information and details on Canada Zinc Metals please visit http://www.canadazincmetals.com/"
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