Zinc market rally bodes well for exploration companies
TORONTO (miningweekly.com) – The strong rally base metals had experienced in the past week was extending to zinc, with explorer Nevada Zinc Corp saying it was seeing renewed buying interest, not only in the commodity, but in the major zinc producers too.
President and CEO Bruce Durham said in a note to shareholders this week that many zinc producers, including the likes of Hudbay Minerals, Trevali Mining and Lundin Mining, had recovered significantly.
“This strong recovery in base metals prices should be very positive for zinc exploration companies,” he noted.
He stated that other factors pointed to a strong resurgence in zinc prices, including dropping stockpiles. Overnight London Metals Exchange zinc inventories, for example, had reached their lowest levels since December 2009 at 465 950 t.
Total global inventories now stood at 751 400 t, which was 1.5% more in the quarter to date. “With planned zinc mine closures, there is a strong case to be made for potential sustainable upward momentum for zinc,” he said.
The zinc spot price was heating up in recent weeks and, after breaking through $1/lb in mid-April, the price was closing in on the $1.10/lb mark, a level not seen since last summer and within 10% of a five-year high.
“At Nevada Zinc, we’re confident in the long-term price of zinc,” Durham said.
The Toronto-based company, formerly Goldspike Exploration, had continued to expand the high-grade, near-surface zinc mineralisation at its Lone Mountain property, in Nevada. It was currently focused on a third-phase drilling programme to expand existing resources on the prospective property.
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