Base Metal Bonanza

With rights to one of the richest zinc deposits on the planet, Zinc One Resources (Z.V; ZZZOF.OB) may be the perfect way to play the zinc bull market.

Dear Fellow Investor,

Zinc has been on a bit of a tear in recent months, as the global economy has accelerated and adequate supplies have proved hard to come by.

As you can see from the chart below, zinc prices have shot up as global inventories have steadily dwindled. It’s a sure-fire recipe for profits, if you can find the right way to play it.

5-Year LME Zinc Warehouse Stocks Level and Price

Given that the zinc supply gap is expected to widen over the next few years, the key is to find companies with projects that either are in production or can be brought into production in the next few years to help fill the gap (and take advantage of higher prices).

Thanks to its Bongará Zinc Mine Project in Peru, Zinc One Resources fits this bill to a tee.

With zinc grades that put it in the top 1% of all zinc projects either in production or near production, Bongará gives Zinc One and its shareholders a highly leveraged way to capitalize on the bull market for zinc.

A Pure Play Zinc Project…

Located in northern Peru, Bongará produced zinc briefly in 2007 and 2008 before the Great Recession hit and sent zinc prices tumbling.

Much of the infrastructure to re-start mining is in place, and the project has some of the highest-grade zinc resources in the world. It’s historical measured and indicated resource is 1,007,796 tonnes at 21.61% zinc and its inferred resource is 209,018 tonnes at 21.18% zinc.

This chart of zinc projects of 100,000 tonnes or more gives you a sense of just how rich Bongará’s mineralization is — this is truly a 1-percenter deposit.

Better still, it is a pure play zinc project, a rarity in a world where most of the world’s zinc comes as a by-product of silver or copper mines. That fact makes Zinc One a unique lever on rising zinc prices.

Zinc One’s management has an ambitious plan to put Bongará’s oxide resource back into production in the next 24-36 months. That timing should coincide perfectly with the widening of the supply deficit for zinc.

Peru is a great place to develop a mining project. It is currently the third largest producer of copper and zinc in the world and is a mining-friendly legal and tax jurisdiction. A foreign investment law guarantees the security of foreign and domestic investments.

The government recently approved an aggressive drill program for Bongará that is generating new drill core as we speak.

…With Exploration Upside

Adding further fuel to Zinc One’s growth potential is the exploration story at Bongará.

Mineralization has already been traced along a 1.2-kilometer, northwest-striking ridge. The mineralization at Bongará is outcropping, gently dipping and shallow throughout, making it an imminently mineable source of zinc.

And, as rich as the historical resource is, recent surface sampling has uncovered even richer grades, with numerous outcrops assaying over 40% zinc. Plus, this mineralization appears to extend as much as 6.0 kilometers to the northwest.

Recent sample highlights include 47.73% zinc over 8.1 meters, 25.65% zinc over 19.7 meters and 32.50% zinc over 3.8 meters. Current drilling will help assess the potential of several targets at Bongará, which include the resource-hosting Mina Grande targets and the untested Bongarita and Mina Chica targets.

Updated drill map

Zinc One’s adjacent Charlotte-Bongará concession opens up the possibility of a district-scale zinc play, one that could host multiple zinc deposits. Historical intercepts on Charlotte Bongará include 15 meters of 29.5% zinc and 11.5-meters of 29.7% zinc.

Add in the possibility of more zinc-focused acquisitions to this longer-term exploration story, and you have a near-perfect zinc investment vehicle.

Near-Term Price Catalysts

Share price catalysts for Zinc One in 2018 include ongoing drilling, metallurgical testing results in Q1 and Q2, a new, NI-43-101 compliant resource estimate for Bongará in Q2 and a preliminary economic estimate in late Q2 or early Q3.

The drilling will begin in early 2018, thanks to the 124 drill platforms that the government of Peru approved for the project in December 2017. The work will include a testing of Bongarita and Mina Chica, as well as a delineation of the historical resource at Mina Grande.

With news flow coming in a steady stream in the next few months, the time is ripe to build a position in Zinc One. If you like the zinc story, this company is a potential three-bagger in the making, and a must-have for your portfolio.

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