I happen to be a big fan of zinc. It’s the fourth most commonly used metal behind iron, aluminum and copper. Every car contains over 38 pounds of zinc. It’s used to galvanize metal to prevent it from rusting. And while I do believe China is in at least a slowdown, the supply side of zinc is shrinking faster than the demand side. So while the $200,000 a year truck drivers in Australia in the coal and iron mines have a real problem, I think zinc miners will be in big demand.
My favorite zinc project is in Canada, run by Canada Zinc. Country risk has become excessive. Ecuador just killed one of the best gold projects to come along since this gold cycle started, the Kinross project at Fruta del Norte. The government of Ecuador demanded a 70% windfall profits tax. So five years after Kinross spent over $1 billion buying Aurelian Resources, the project is dead. Good work, Ecuador, you sure showed those nasty Canadians how to put people to work.
I’m an equal opportunity anarchist. I despise all governments equally. The governments of Ecuador, Peru, Chile and Argentina deserve kudos. They are dumber than bricks. How on earth did any of those fools get elected? It’s no wonder they are third world shit holes, their governments are either totally corrupt or just can’t stand the idea of ordinary people having high paying jobs. Throughout history, miners have been the highest paying jobs.
Don’t get me started.
Canada remains relatively sane in an insane world. Canada Zinc should be one of the primary beneficiaries of the 11% decline in zinc supply between now and 2016. The company has completed over 32,000 meters of drilling at their 125 square km Akie project in Northern BC. The company released an updated 43-101 in 2012 showing over 29 million metric tonnes of $200 rock. That’s almost $6 billion dollars of silver, lead and zinc in the ground. That ought to be worth something. At today’s share price of $.22, the market is giving them a market cap of $31 million and if you subtract the $15 million in cash on hand, they have a $16 million dollar enterprise value.
The resource markets are insane right now but will recover soon. You need to pick up cheap assets with real management that have cash in the bank. I don’t think you can do very much better in zinc than Canada Zinc.
Canada Zinc is an advertiser and I am biased. Do your own due diligence.
Canada Zinc Metals