Wednesday, January 26, 2011

Canada Zinc Metals: M&A play with tight Zinc supply: "No more ore at Century" czx.v , lun.to, tnr.v, bwr.to, cs.to, imn.to, ncu.to, tko.to, wrn.to, qux.to, rio, bls.to, tck


  

  We had a very interesting action in Canada Zinc Metals shares last couple of weeks. Company share price had a break out to the upside from a consolidation pattern on the news of Lundin Mining deal with Inmet Mining. 
  Dr. Zinc was an underdog compare to the party of Dr. Copper in 2010, but everything could changed very fast according to Salman Partners.

 "This deal came even faster than we expected: Lundin Mining is taken out.
"Now market will be taking US13¢ per pound of copper resource as a new benchmark for the new deals. All projects are different, but this deal could be a tipping point and ignite rush for the new deals to secure Copper Supply for Chinese growth."


  Lundin Mining still holds a stake in Canada Zinc Metals and now Chinese Tongling holds more than 35% in the company after the last financing. New company after Lundin Mining merger with Inmet - Symterra Corp. will hold a stake in Canada Zinc Metals.

"Another interesting move by Lundin Mining could be in its core zinc business with Canada Zinc Metals still in the M&A picture. Even after Chinese involvement, company is still at the very attractive levels of valuation. Its Akie deposit represents one of the largest zinc and lead deposits in the world and based in  Canada. With recent financing from Tongling, Chinese giant will have more than 30% in Canada Zinc Metals, Lundin Mining is the second largest shareholder after Tongling now in that company. We were thinking that Mandarin will be the only language for all presentations in that company, but found recently information on the bullboard about Lundin Mining visits to the Akie property - it could be easily confirmed by the management. "As I have a large shareholding in CZX I stay in regular communication with management. A team from Lundin Mining was up at the property not too long ago. Apparently the visit went very well...don't forget Lukas Lundin is a wheeler and dealer. Trust me - others are knocking too.
Any sophisticated investor (and I know you are one) knows that all it would take is a large pp with another mining company (including Lundin Mining) and the playing field is levelled."

  Akie deposit is already among the major Zinc and Lead deposits in the world in mining friendly and stable Canada, but the real understanding of M&A potential here will come after realisation of all picture in this area play in Canada. Next to Canada Zinc Metals is Cirque deposit which belongs to Teck / Korea Zinc J/V. Chinese Sovereign fund owns a substantial stake in Teck Resources now, consolidated this area could represent a target for 100 mil tonnes of base metals resources with further exploration. This will put it among five largest deposits world wide. Another interesting twist in this developing story is that it was Inmet Mining who performed drilling on Akie in 1994-1996. 
  Canada Zinc Metals has just announced further aggressive exploration program on its properties.

"About Canada Zinc Metals Corp.
Canada Zinc Metals is a mineral exploration company focused on unlocking the potential of a future long life mining district in British Columbia, Canada. The Company is the dominant land holder in a world class mineral belt called the 
KechikaTrough which hosts in excess of 80 million tonnes of base metal resources. Canada Zinc Metals owns a total of 78,526 hectares in 233 claims which extend northwestward from the Akie property for a distance of 125 km.
About the 
Akie Property
The 
Akie zinc-lead property is situated within the southern-most part (KechikaTrough) of the regionally extensive Paleozoic Selwyn Basin, one of the most prolific sedimentary basins in the world for the occurrence of SEDEX zinc-lead-silver andstratiform barite deposits.
Drilling on the 
Akie property by Inmet Mining Corporation during the period 1994 to 1996 and by Canada Zinc Metals since 2005 has identified a significant body of baritic-zinc-lead SEDEX mineralization (Cardiac Creek deposit). The deposit is hosted by variably siliceous, fine grained clastic rocks of the Middle to Late Devonian 'Gunsteel' formation. The Company has filed a NI 43-101 report supporting the estimated inferred resource of 23.6 million tonnes grading 7.6% Zn, 1.5% Pb and 13.0 g/t Ag (at a 5% Zn cut off grade). The complete NI 43-101 technical report, titled "Geology, Diamond Drilling and Preliminary Resource Estimation, Akie Zinc-Lead-Silver Property, Northeast British Columbia, Canada" and dated May 30, 2008, can be viewed on SEDAR.
Two similar deposits, Cirque and South Cirque, located some 20 km northwest of 
Akieand owned under a joint venture by Teck Cominco and Korea Zinc, are also hosted byGunsteel rocks and have a combined geologic inventory in excess of 50 million tonnes."

January 24, 2011 “Metals Morning Note” issued by Salman Partners of Vancouver, British Columbia, Canada. 

"Zinc

No more ore at Century
Reuters has reported that the owner of the giant Century zinc-lead-silver mine in Australia, Hong Kong-listed Minmetals Resources Ltd says “The exploration that we have been doing around Century for quite a long time has failed to produceany evidence of a major extension of the orebody.”  Thus, the mine remains “set for closure in 2015”.
We have previously pointed out that Century is to be part of a wave of zinc mine closures beginning next year, and accordingly recommend investment in operators and developers of zinc mines that should be in production by the end of this decade."
The note then goes on to list Canada Zinc Metals Corp. as one of the top plays in the development of zinc resources.
__________________________________________________________________________________________________________________________________


About Canada Zinc Metals Corp.
Canada Zinc Metals is a mineral exploration company focused on unlocking the potential of a future long life mining district in British ColumbiaCanada.   The Company is the dominant land holder in a world class mineral belt called the Kechika Trough which hosts in excess of 80 million tonnes of base metal resources.   Canada Zinc Metals owns a total of 78,526 hectares in 233 claims which extend northwestward from the Akie property for a distance of 125 km.
The Company has filed a NI 43-101 report supporting the estimated inferred resource of 23.6 million tonnes grading 7.6% Zn, 1.5% Pb and 13.0 g/t Ag (at a 5% Zn cut off grade) at its flagship Akie property.  Using this estimate, the deposit contains 3.95 billion pounds of zinc,780 million pounds of lead and 8.95 million ounces of silver.  The deposit remains open in all directions.
Tongling Nonferrous Metals Group and Lundin Mining are significant shareholders of the Company.
Please visit us at www.canadazincmetals.com"

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advise on this blog and there is no solicitation to buy or sell any particular company here. Always consult with your qualified financial adviser before making any investment decisions.
Enhanced by Zemanta
Post a Comment