Zinc and Other Metals.

Here is another excellent article contributed by “Perdant” of “Topstocks” This time on Zinc and other metals. Longish ,but worth the time to read.

Properties
• Pure zinc is a bluish-white, shiny metal.
• Zinc is resistant to corrosion.
• Zinc has a relatively low melting point.
• Zinc has never been found naturally in its pure form.
• Zinc can be alloyed (mixed) with a number of other metals.
• Zinc is brittle at ordinary temperatures but is malleable and ductile (can be beaten and drawn into a wire) when heated to 1000 Celcius.
• Zinc is a good electrical conductor.
• Zinc has the symbol Zn.
• Zinc is fairly hard.

Source

The ores of zinc usually occur together with other ores, notably silver and lead. The discovery of a large zinc-lead-silver orebody at Broken Hill in 1883.

However, until the early 1900s much of the mined zinc was wasted, as it could not be efficiently separated out from the other ores and waste rock.
It was then discovered that, after crushing the rock and adding water to make a pulp, simply adding an oil and bubbling air through the mixture caused the zinc to stick to the bubbles and float to the surface where it could be skimmed off.
The waste rock material sank to the bottom. This was the invention of the revolutionary ‘froth flotation’ method of separating minerals, now used world-wide!

Australia today has more than 20% of the world’s known zinc-lead resources, and is the largest producer and exporter of these metals to the rest of the world.
Our main zinc mines are at McArthur River in the Northern Territory and Cannington in Queensland.
The Century zinc mine, also in Queensland, will be the world’s largest zinc mine when it reaches full production, and Australia’s only large open-pit zinc mine.

Zinc (Zn) was used in Rome and China more than 2000 years ago as a component of brass (zinc-copper alloy). Zinc metal was first smelted from zinc ore in India in about 1200 and is known to have been used in China soon after.
Commercial production of zinc did not start in Europe until the middle of the 18th century and in the United States until 1860.
In deposits mined today, zinc ore (rock containing economic content of zinc and/or other materials) usually occurs mixed with ores of lead, silver and commonly copper, and is extracted as a co-product of these metals.

Occurrence

The main zinc mineral is sphalerite (Zn,FeS), which contains up to 67% zinc. Smithsonite (ZnCO3, 52% zinc), willemite (Zn2SiO4, 59% zinc) and hemimorphite (Zn4Si2O7(OH)2 H2O, 54% zinc) may occur in the near-surface weathered or oxidised zone of an orebody.

Deposits containing zinc form from hot (hydrothermal) fluids generated within the earth. These fluids may be trapped below the surface in cracks where sphalerite and other minerals may precipitate to make vein deposits.
Where limestones occur, the fluids may fill cavities to form rich but patchy deposits. Some fluids may reach the ocean floor in areas of underwater volcanic activity to form ‘volcanogenic’ deposits.
Some are forming today under the ocean off Papua New Guinea and Canada.
Other fluids may escape to the surface through cracks or faults into small shallow lakes or seas and, if conditions are right, lead-zinc-silver deposits may form.

For thousands of millions of years, deposits have been forming in this manner and may eventually be exposed at the surface following weathering and erosion.
Some are completely eroded away and may be recycled by natural processes into new deposits. Partially eroded deposits were relatively easy to discover, examples are the Broken Hill and Mt Isa deposits, found late last and early this century.
These deposits formed the basis of Australia’s zinc mining industry.


Exposed deposits are becoming harder to find in Australia and exploration companies are now looking beneath the surface for the deposits of the future.
This is a more costly and difficult way to find orebodies but a series of successes have occurred since the late 1970s.
Such discoveries include the Scuddles mine (140 metres deep) and Admiral Bay (1.5 kilometres deep) in Western Australia, the Cannington deposit (10 metres deep) in north Queensland, the Hellyer mine (90 metres deep) in Tasmania and the Wilga deposit (50 metres deep) in Victoria.

Australian Resources and Deposits

In 1883, Charles Rasp discovered the rich, large Broken Hill lead-zinc-silver deposit in New South Wales (NSW) deposit when he found some dark, heavy rocks which he thought may contain tin. Subsequent assays (analyses) of these rocks proved that he had located rich oxidised (weathered) silver and lead minerals.
Broken Hill provided the basis for Australia’s current major zinc mining industry . Over 100 years later ore is still being mined at Broken Hill and it has been the largest producer of lead-zinc-silver in Australia.

The rich lodes at Mt Isa were not discovered until 1923 and were developed despite the remote location and harsh environment.
The nearby, rich Hilton deposit was discovered in the late 1940s but not developed until the mid-1980s. Production at Mt Isa continues and it has been the second biggest zinc producer in Australia.
In the Mt Isa region, there are large mines at the George Fisher, Cannington and Century deposits, while the Dugald River and Lady Loretta deposits are yet to be developed. In the Northern Territory, the large McArthur River deposit is a major producer.

Zinc ore is also produced at Rosebery and Hellyer in Tasmania; Elura in NSW; and Pillara, Goongewa, Scuddles and Gossan Hill in WA . High-grade zinc silicate ore is mined intermittently from the small Beltana deposit in South Australia.

Australia in the World

Australia ranks first in the world in economic zinc resources because of the development of the large, world-class zinc-lead-silver deposits at McArthur River, Cannington and Century.
This position is further supported by resources in the many other deposits of various sizes in Australia.

Australia ranks third behind China and Canada in world mine production and second to Canada in exports of zinc.
Australia exports zinc as refined metal to a broad range of destinations in the Asia Pacific area, from India to the USA, but mainly to Indonesia, Hong Kong, Chinese Taipei and Malaysia. Our major customers for zinc in ores and concentrates are Japan and South Korea, and to a lesser extent Belgium, Germany and the United Kingdom.

Australia is also at the forefront of technological development in zinc mining and processing.

Mining

In the early days of Broken Hill, zinc ore was rejected to the waste dumps because virtually none of the zinc could be extracted economically.
Gravity and magnetic separation methods were unsuccessful. In 1901 a flotation process was devised at Broken Hill which achieved recovery of upwards of 60% of the zinc minerals from ore. After considerable experimentation, a selective flotation method that worked on a commercial scale was perfected in 1912.
Improved versions of this flotation process, such as the Australian-developed Jameson flotation cell, are used world-wide today. The Jameson flotation cell is installed in many mines around Australia.

Almost all of Australia’s zinc mines are underground operations and are highly mechanised. Ore is drilled and blasted in large volumes, transferred to underground rock crushers by large loaders and trucks, and then hoisted to the surface in skips or driven directly to the surface by truck via a spiral access tunnel (decline).
Century is Australia’s only large surface open pit zinc mine (so hoisting is not required), where ore extraction is by similar methods.

At the surface, the ore is subjected to additional crushing and fine grinding. The flotation process is then used to separate the zinc and other valuable sulphide minerals from the waste rock particles (tailings) to form a concentrate.

Ground ore, water and special chemicals are mixed and constantly agitated in banks of flotation cells. Air is blown through the mixture in each cell, and the fine zinc sulphide particles stick to the bubbles, which rise to form a froth on the surface of the flotation cell.
The tailings sink and are removed from the bottom of the cell. The froth is skimmed off and the resulting zinc sulphide concentrate is dried.
This process upgrades the ore, which may contain only 6% Zn, to a concentrate assaying more than 50% zinc. Up to 90% of the zinc in the ore can be recovered.

Electrolysis and smelting are the two processes used to produce zinc metal in Australia. The electrolytic process is used at the Risdon zinc refinery in Tasmania, where zinc concentrate from various Australian mines is roasted to eliminate most of the sulphur, as sulphur dioxide, and make impure zinc oxide.
The roasted concentrate is then leached with sulphuric acid to form zinc sulphate solution. The zinc sulphate solution is purified by adding a small amount of zinc powder to precipitate and remove traces of copper, cadmium, cobalt and nickel.
The solution is piped to electrolytic cells, where the zinc is electrochemically deposited on aluminium cathodes (electrodes). The zinc is removed from the cathodes, melted in a furnace and cast into slabs.

The smelting process is used at Cockle Creek near Newcastle in NSW, to produce zinc (and lead) metal simultaneously in a blast furnace. Zinc and lead concentrates from various mines are blended and sintered (partly melted) to combine the fine particles into lumps and remove some sulphur as sulphur dioxide.
The sintered product is mixed with coke and smelted in a blast furnace to produce zinc vapour (gas), which is condensed by cooling with a spray of molten lead to form impure molten zinc metal (98.3% Zn).
To remove the small amount of lead and cadmium impurities the liquid zinc is twice boiled to zinc vapour and recondensed to produce high purity zinc metal (up to 99.95% Zn).

At Port Pirie, zinc is recovered from the lead smelter slag (molten waste), which contains about 17% zinc, and residues from the Risdon zinc refinery in Tasmania.
The molten slag is heated further to drive off zinc (and some lead) vapour, which is oxidised to form a zinc oxide fume and filtered out as dust in a ‘bag filter’.
This dust is ground and put through an electrolytic refining plant to produce high purity zinc.

Primary refined zinc is produced at three plants - Risdon (Tasmania), Cockle Creek (NSW), and Port Pirie (SA), while production at the new Townsville zinc refinery is expected in late 1999. Small production of secondary refined zinc occurs at Port Kembla (NSW). Zinc oxide and zinc dust is produced from primary and scrap zinc at West Footscray in Melbourne (Victoria) and in minor amounts in Brisbane (Queensland).

Risdon is Australia’s largest zinc refinery and also one of the largest in the world. Overall zinc recovery from concentrates is about 95%. Less than half of Australia’s zinc concentrates are processed domestically.

Uses

A large part of the world’s zinc is used as protective galvanised coatings for iron and steel. In Australia, this use accounts for well over half of the domestic sales of zinc. The widespread use of zinc as a protective coating is mainly because of its resistance to normal weathering, and the protection given to steel by the preferential corrosion of zinc when the underlying iron or steel is exposed.
This is an electro-chemical reaction known as galvanic action. The construction and appliance manufacturing industries use large amounts of zinc, mainly as coatings on steel beams, sheet steel and vehicle panels in the automotive industry.

Zinc is also used in alloy die cast products, zinc pigments, zinc salts, zinc oxide as additives to rubber and for zinc chemicals in agriculture, and for wrought or rolled zinc products.

Galvanising
In Australia today, two-thirds of all the zinc used is to protect steel from rusting, by coating it using a process called galvanising (named after the Italian chemist, Luigi Galvani, who invented the process).
The steel is dipped in molten zinc, often also with aluminium. Products include steel beams, roofs, poles, wires, nails, household appliances and car bodies, to name a few.
Diecast objects

Zinc mixed with small amounts of aluminium produces a very strong alloy. Its low melting point enables it to be diecast (cast into different shapes in steel moulds) to make all sorts of items (some requiring fine detail) from carburettors to doorhandles, staples to zips, even matchbox cars.

Brass

Brass (70% copper, 30% zinc) is particularly rust-resistant and so is used to make the hulls of sailing boats and other marine hardware.
Many musical instruments are made from brass. Also decorative pieces, from light fittings to taps, and instruments for astronomy, surveying, navigation and other scientific purposes.

Batteries

When alloyed with other metals, zinc becomes a good electrical conductor. Zinc-bromide and zinc-nickel power cells are amongst the newest types of batteries.

Health

Humans and other animals need to ingest zinc for proper growth and healing of wounds to occur. Fruits, nuts, meat, oysters and other shellfish are good sources of zinc.

Zinc oxide

Zinc oxide is a unique and very useful material, used in the manufacture of rubber tyres, skin products (such as zinc cream, anti-dandruff shampoos, antiseptic ointments, and calamine lotion for healing skin disorders), paints, floor coverings, plastics (to help prevent them cracking) and ceramic glazes.

Zinc sulphide

In luminous dials on watches, TV screens and fluorescent lights.

Other zinc compounds

As a dissolving agent, to help prevent plastics from cracking, in surgical dressings, glues, and to preserve and fire-proof timber.

Operating Zinc Mines in Australia

Zinc (Zn) is the 23rd most abundant element in the earth’s crust.
The construction and appliance manufacturing industries use large amounts of zinc, mainly as coatings on steel beams, sheet steel and vehicle panels in the automotive industry. It is also used in alloy die cast products, zinc pigments, zinc salts, zinc oxide as additives to rubber and for zinc chemicals in agriculture, and for wrought or rolled zinc products.

Lead & Silver

Lead

The widespread occurrence, relatively simple extraction, and combination of desirable properties have made lead (Pb) useful to humans since at least 5000 BC. In deposits mined today, lead (in the form of galena, PbS) is usually associated with zinc, silver and commonly copper, and is extracted as a co-product of these metals.
More than half of the lead utilised today comes from recycling, rather than mining. The largest use is in batteries for vehicles and communications.
Less important uses include cable sheathing, solder, casting alloys, chemical compounds, ammunition, glass in TV and computer screens for radiation protection, and ceramics.
New uses for lead could be in large storage batteries used for load-levelling of electrical power and in electric vehicles.

Silver

The relative scarcity, attractive appearance and malleability of silver (Ag) makes it suitable for use in jewellery, ornaments and silverware.
Its extensive use in coins throughout history has declined over the last forty years. In Australia, the 1966 fifty-cent piece was the last coin in general use to contain silver (80% silver, 20% copper). Silver is mined and produced mainly as a co-product of copper, lead, zinc, and to a lesser extent, gold.
Today, photographic paper and film, followed by the electronics and jewellery/tableware industries are the most important users of silver.
Demand for silver as an anti-bacterial agent is likely to double over the next few years as its use increases in water treatment (as an ioniser with copper in domestic swimming pools) and for biocide and bacteriostatic activity in plastic and textiles formulations.
Silver based biocides are also being tested as a replacement for arsenic based preservatives in wood treatment.

Resources

Australia’s total resources of zinc, lead and silver increased in 2004. Total identified resources of zinc increased by almost 10 Mt to 89.3 Mt of contained zinc; lead from 55.2 Mt to 56.8 Mt of contained lead; and silver from 107.3 kt to 109 kt of contained silver.

Zinc

EDR [Economic Demonstrated Resources] of zinc at close to 42 Mt is the world’s largest holding, accounting for over 18% of global EDR.
Queensland’s EDR is the largest, remaining steady at 26.1, however, its share decreased slightly to 62%. The Northern Territory again had the second largest EDR, increasing to 10.8 Mt, and its share of national EDR was 26% compared to 23% in 2004. New South Wales had the third largest EDR with 2.4 Mt (2.7 Mt in 2004).
This decrease was primarily due to depletion of resources through production. Western Australia’s EDR remained steady at 1.48 Mt, while Victoria remained unchanged at 0.39 Mt. Tasmania’s EDR fell to 0.33 Mt (0.43 Mt in 2004) due to production depleting resources.

Of Australia’s EDR of zinc, 53% occurs in JORC code ore reserves categories, compared to a high of almost 65% in 2002.
The national EDR/production ratio is 30.6 but the ore reserve production ratio is only 16.1.

Paramarginal demonstrated resources of zinc fell from 8.5 Mt to 8.2 Mt along with submarginal demonstrated resources, which declined marginally from 14.9 Mt to 14.1 Mt over the year. These variations are attributed to relatively small changes in most states and the Northern Territory.

Total inferred zinc resources remained unchanged.

Lead

EDR of lead increased by 4% in 2005 to 23.8 Mt, which constituted over 40% of total identified resources. Australia also contains the largest share of world EDR at over 30%. Queensland retained the top ranking with its EDR remaining steady at 14.18 Mt in 2005, however its share of national EDR fell to 57%.
The Northern Territory increased slightly from 5.25 Mt to 5.76 Mt EDR, or 27% of the national total. New South Wales recorded a slight decrease in EDR from 1.6 Mt in 2004 to 1.48 Mt in 2005, due to depletion of resources through production at Broken Hill and Elura. EDR in Western Australia increased from 1.8 Mt to 2.18 Mt in 2005 due to reclassification of the Magellan resource. Tasmania’s EDR fell by 0.02 Mt to 0.09 Mt due to depletion of resources through production.

Of Australia’s EDR of lead, 44% occurs in JORC code ore reserves categories (43% in 2004). The national EDR/production ratio is 31 but if the ore reserve/production ratio is used it is 14.

Australia’s paramarginal demonstrated resources of lead are 3.1 Mt (2.9 Mt in 2004), which is 5.3% of total identified resources. Submarginal demonstrated resources totalled 8.8 Mt (9.3 in 2004) or 15.3% of total identified resources. These global variations are attributed to relatively small changes in most states and the Northern Territory in both categories.

Total inferred lead resources increased from 21.6 Mt in 2004 to 21.9 Mt in 2005.

Silver

EDR for silver increased to 44 kt in 2005 from 41.4 in 2004. Queensland has the highest inventory, which is steady at 29.7 kt. Its share of the total EDR fell from 73% to under 62% in 2005.
The decrease was mainly a result of resource depletion at Cannington, along with reclassification of resources. South Australia has the second largest EDR with 5.5 kt (2.5 kt in 2004) with a substantial increase coming from reclassification of the Olympic Dam resource and addition to the Angas resource.
The Northern Territory increased its EDR from 4.5 kt to 5 kt and has the third largest EDR with its share of national EDR at 11.2% compared to 10.9% in 2004. New South Wales marginally decreased its EDR from 2.3 kt to 2.2 kt, while Western Australia decreased from 1.2 kt to 1.1 kt in 2005.
Tasmania’s EDR fell marginally from 0.41 Mt to 0.32 due to depletion of resources from production at Rosebery, and Victoria remained unchanged at 0.28 kt.

Of Australia’s EDR of silver, 60% (26.2 kt) occurs in JORC code ore reserves categories. The national EDR/production ratio is 18.3 but if the ore reserve /production ratio is used it becomes 10.9.

Paramarginal demonstrated resources of silver decreased to 15.3 kt from 17.6 kt in 2004 and submarginal demonstrated resources also fell to 14.8 k from 16.9 kt t over the year. These variations are attributable to reclassification of resources at Mt Isa and George Fisher in Queensland and Olympic Dam in South Australia.

Total inferred silver resources decreased from 33.5 kt in 2004 to 32.3 kt in 2005.

Exploration

In 2005, exploration spending on zinc-lead-silver was $46.5 million, $13.1 million (39%) higher than in 2004. The 2005 expenditure was about 15% of total base metal expenditure of $320 million compared to 16% in 2004.

Abra Mining completed the first phase of diamond drilling at its wholly-owned Mulgul base metal prospect, 220 km north of Meekatharra in Western Australia. Four drillholes tested between 100 m and 200 m to the south and south west of previous drilling and all intersected 250 vertical m of mineralisation with results from the four holes including 110 m at 3.66% lead, 1.02% zinc and 0.08% copper from 378 m and 68 m at 7.29% lead, 0.14% zinc and 0.23% copper.

TasGold Ltd’s drilling in south-west Tasmania yielded high-grade base and precious metal intersection at Wart Hill, a 7 m mineralised zone returning 7.8% Zn, 4.4% Pb, 78g/t Ag and 0.4g/t Au in semi-massive to massive sulphides 35 m vertically below surface.

Production

Australia’s mine production of zinc, lead and silver totalled 1.367 Mt, 767 000 t and 2407 t respectively.
Production was higher for each commodity compared to 2004, with zinc up 33 000 t, lead 90 000 t and silver 170 t. In production, Australia ranks second for zinc and lead after China and fourth for silver after Peru, China and Mexico. Cannington (Qld) is the world’s largest and lowest cost producer of silver and lead, with almost 288 kt of lead and 43.9 Mozs of silver in 2005. Century (Qld) had the largest zinc output at 501 kt.

World Ranking

Australia has the world’s largest EDR of zinc (18%) and lead (32%) and second largest of silver (16%) behind Poland (18%).

Industry Developments

Terramin Australia more than doubled the reserve estimate for its Angas zinc project, 46 km south east of Adelaide in South Australia. The 140% increase (to 2.2 million tonnes), is based on a cut-off grade of 4% Zn for the project.

Kagara Zinc also more than doubled the total inventory of zinc, copper and gold resources at its Mt Garnet project (Qld). Resources increased to 28.4 Mt from the previously reported 11.6 Mt following drilling campaigns at the Mungana and Balcooma deposits, both of which are key future production centres for the Mt Garnet operations.

In the Northern Territory a new estimate for oxide and sulphide ore at Compass Resources’ Browns project south of Darwin resulted in an increase of 29% contained lead and 17% copper. Measured, indicated and inferred resource at Browns now total 40 Mt @ 0.5% Cu, 4.52% Pb, 0.11% Co, 0.09% Ni and 13g/t silver.

Oxiana Ltd entered into an agreement from 1 July 2005 to acquire the Golden Grove base metal operation (WA) from Newmont Mining Corporation at a cost of $265 million.

Ivernia Inc entered into an agreement with Sentient Global Resources Fund to acquire its 49% interest in the Magellan lead mine (WA) for C$100 million.
On completion of the transaction, Ivernia will have 100% ownership of the Magellan mine’s 2.2 billion pounds of in situ lead reserves.
Ivernia forecasts 2006 production of about 220 million pounds of lead in concentrate. Mining from the Cano pit at Magellan and commissioning of the lead processing plant commenced in January 2005.

Exploration of the Menninnie Dam zinc, lead and silver deposit (SA) is the subject of an agreement between Zinifex Australia Limited and Terramin Australia Limited, the deposit’s owner.
Under the agreement, Zinifex may earn up to a 70% interest in the project by spending up to $8 million in a number of stages. Subsequent to that agreement, Zinifex acquired a 20% interest in Terramin’s wholly-owned zinc, copper and lead subsidiary, Menninnie Metals to pursue the development of new base metals projects in South Australia.

Energy services company Sempra Energy has taken a strategic stake in Terramin Australia’s proposed 400 000 tpa Angas lead and zinc project in South Australia.

Triako Resources [recently taken over by CBH Resources], Platsearch, Eaglehawk Geological Consulting and Sipa Resources signed a joint venture agreement with Teck Cominco regarding the Stephens-Centennial zinc/lead/silver project at Broken Hill, NSW.
The agreement includes a 500 metre deep drillhole to test a defined gravity target before mid 2006 and a geochemical sampling program (using a portable Niton XRF analyser at 20 000 sample sites) to be completed before the end of 2006.
The Stephens-Centennial tenement covers 213 km2 of highly prospective Broken Hill Group rocks, which is centrally located in the Broken Hill Block, between 5 and 20 km west and northwest of Broken Hill’s line of lode.

CBH Resources reported an increased resource at its Sulphur Springs zinc-copper deposit in Western Australia based on open pit cut-off grades. The resource estimate increased to 13.8 million tonnes @ 3.7% zinc, 1.4% copper, 21g/t silver (or 6.4% zinc equivalent).
Within this is a large, higher-grade component of 8.5 million tonnes @ 5.2% zinc, 1.9% copper, 25g/t silver (or 9.0% zinc equivalent).
The recently reopened Rasp mine in Broken Hill has a resource zone of 5% Zn + Pb cut off totals 9.2 Million tonnes at 4.1% Zn, 2.8% Pb and 32g/t Ag. [ASX ann 23rd May 2006] Resource upgrade 12th July ASX ann shows better than this.
The Endeavour mine at Cobar also recently had a resource and reserve upgrade on the 5th September.

Base metal miner Kagara Zinc progressed development of a third production centre at its Mt Garnet base metal operations in north Queensland with the commencement of an exploration decline to access the Mungana deposit.
It also announced a substantial upgrade to the base metal resource at Mungana.
The new resource, which is now more than 90% in the indicated category, is 2.85 million tonnes grading 12.6% zinc, 2.7% copper, 2.4% lead, 190g/t silver and 1.2g/t gold.

An upgraded resource of 820 000 tonnes with grades of 6.8% zinc, 1.7% lead and 17g/t silver has been announced for the Main Lode at Prairie Downs Metals’ base metal project, 60 km south west of Newman in the Pilbara region of Western Australia.

Perilya in Broken Hill [Ex Pasminco and the original Broken Hill mine from the 1890's]

weblinks

http://www.iza.com/
http://www.solexresources.com/s/AboutZinc.asp
http://www.australianminesatlas.gov.au/TOC.jsp
http://en.wikipedia.org/wiki/Zinc

A Commodity’s Cycle

The following are some of my thoughts and are imho( in my humble opinion) only.

Something to think about:
Basic business sense will tell you that the cycle of many mining operations is linked directly to their financial worth.
The fact that a resource is not financially viable to extract, leaves it right there in the ground. One would also expect that dedicated exploration for these said metals also ceases to continue. This of course, remains true until economic or supply factors change.

For a long time, zinc prices were pretty low. Mining companies turned to more economic metals. Zinc stock levels have fallen recently whilst demand continues to be strong.

It is in my opinion only a matter of time before zinc prices rise dramatically.

I believe this despite the recent sideways movement of zinc over the past six weeks or so.

But, and this is the cautionary part, how long will this run continue, especially since prices are at highs?
The scramble by mining companies to take advantage of these high prices will eventually increase supply and have a negative affect on prices.

So the cycle would have completed one complete revolution.

For this reason, my personal watchlist and investment choices revolve around companies that are presently producing.

Personally, I would rather be investing in a company that is selling now, not in 2010!
This way I can take immediate advantage of rising share prices and dividends [ZFX paid 80 cents last year 10, & then 70 – KZL just announced maiden dividend] and perhaps, [imo again] these companies may weather any storm that the market throws up better than juniors.

Each day I read about another company starting to drill for Zinc. From the time a company first starts up an operation to the first sale of its product can literally take years.

Where will the price of zinc be when all these juniors come on board?

One last point: Remember that Japan is the biggest user of zinc not China.

My Watchlist

ZFX, CBH, KZL, TZN, PEM, OXR

Some interest in AIM & INL

AIM:

Perkoa has a JORC-compliant Ore Reserve of 6.3 million tonnes at a mine head grade of 14.5% zinc,
equating to 907,679 tonnes of contained zinc metal.

The BFS incorporates a mine design consisting of decline access to the ore body, ramping up to deliver 0.5 million tonnes per annum of ore. A simple processing facility comprises a crushing circuit followed by dense media separation, milling and flotation, resulting in the production of 130,000 dry tonnes per annum of relatively clean concentrate, grading 53% zinc over a 14 year mine life.

The following companies have been selected by AIMas off-take partners:

• Xstrata Zinc for its smelters in Spain and Germany;
• Votarantim Metais for its smelters in Brazil and Peru;
• Louis Dreyfus Commodities Metals Suisse SA with extensive commodities trading and logistics expertise, particularly in West Africa.

These three off-take partners will provide Perkoa with a secure, long-term market, attractive sales terms and flexibility in concentrate sales.

First delivery expected early 08

INL:

Not exactly a mining company but first shipment of zinc expected Jan 07

Operating on a 24-hour, 7-day basis, the dredge, grinding mill and flotation circuits are now operating at 80% of the capacity planned in the 65,000 tonnes per annum ‘base-case’ projections, and this output is daily continuing to improve.

The dredge is collecting 130 tonnes per hour of tailings, now grading 2.2% average zinc and increasing with depth.
This tailings slurry is then delivered to shore tanks for temporary storage, prior to being pumped over 2.5 kilometres, with 30 metres vertical lift, to the Intec Hellyer Mill. Each of the dredge, shore tanks and pumps are operating within specifications.

The concentrate storage shed at Hellyer now has a stockpile of approximately 800 tonnes of ‘inspec’ product, grading 41% zinc, 10% lead and 200g/t silver, with all other elements within the specifications of the offtake sales contracts.
Daily trucking of this product to the HZCP’s 8,000 tonne export storage bay at Burnie port will commence soon.
Monthly shipments of 5,000 (and sometimes 10,000) tonne lots are expected to commence in the first half of January, based on recently-agreed attractive shipping rates and terms.

The HZCP currently has two offtake agreements with leading Chinese smelters totalling over two thirds of the 65,000 tonnes per annum bulk zinc concentrate ‘base case’ production.

Strong demand has been received from these and other smelters for the remaining 20,000 tonnes per annum of expected non-committed ‘base-case’ production.
Under the terms of the sales contracts, the HZCP is paid 90% of the consignment value within a short period after the concentrate leaves port.
As such, Intec expects to receive primary payment for its half of the first shipment before the end of January, 2007.

The Zeehan Slags comprise the century-old 460,000 tonne lead smelter slag dumps resource, grading approximately 13.6% zinc, 1.5% lead, 55g/t silver, with indium and minor copper also present.
This corresponds with over 60,000 tonnes of contained zinc, nearly 7,000 tonnes of lead and 780,000 ounces of silver, with a combined in-situ metals value of over A$364 million at today’s metals prices and US$/A$ exchange rate.
Zinifex Ltd holds certain contingent co-exploitation rights in relation to the Zeehan Slags for which it is entitled to receive a production-based royalty.

Intec Ltd (ASX code: INL) is pleased to advise that it has entered into a binding agreement to acquire unlisted Encore Metals NL (‘Encore’) and its Zeehan Slags resource.
Technical and commercial due diligence has been completed, so that the transfer of ownership is being effected immediately.

Encore is the registered holder of Retention Licence 3/1996, located 3 kilometres south of Zeehan on Tasmania’s West Coast and only 80 kilometres from Intec’s Hellyer mine site.

I hope this has been of interest and that your understanding of metals has been increased.
I know mine certainly has been.


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