Zinc One Resources

High-Grade Zinc Oxide Projects in Peru

This profile is part of a paid investor education campaign.*

Overview

Zinc One Resources Inc. (TSXV:Z, OTC:ZZZOF; Frankfurt:RH33 – “Zinc One” or the “Company”) is a mineral exploration and development company focused on acquiring, exploring and developing zinc projects in strong mining jurisdictions. Zinc One’s key assets are the past-producing Bongará zinc mine and the neighboring Charlotte Bongará zinc oxide projects, both situated in the mining-friendly jurisdiction of Peru. The company is focused on achieving near-term cash flow from the Bongará mine and advancing the Charlotte Bongará project while acquiring other advanced zinc assets.

The Bongará Zinc Mine is counted among the world’s highest-grade zinc deposits. The mine was in production from 2007 to 2008, but was shut down due to the global financial crisis, resulting in a drop in zinc prices. Bongará produced zinc grades greater than 20 percent from at or near surface and achieved recoveries over 90 percent. The Charlotte Bongará project has excellent exploration potential with multiple near-surface, high-grade drill intercepts of zinc oxides.

Zinc One’s acquisition of both projects marks the first time that these two properties have been controlled by a single operator. Zinc One’s unilateral control means that the area’s resource can be properly delineated. The company has access to extensive data and technical work for each dating back to the 1990s. Historical data should help expedite the path to production.

The company reached a significant milestone in July 2017 with the signing of the surface access agreement with the Yambrasbamba community. With the agreement in place, Zinc One is able to begin updating the environmental baseline study needed to submit an environmental impact assessment to obtain further drill permits.

Zinc One commenced drilling at Bongará in February 2018. The results from the company’s 2018 drill program were included in the updated resource estimate, which outlined an indicated mineral resource of 812,000 tonnes grading 18.9 percent zinc and an inferred resource of 1.33 million tonnes grading 16.8 percent zinc. The company will continue its exploration efforts to further expand the resource.

Zinc One foresees ample blue-sky potential in the region as well. Management is confident that the updated data will increase the Bongará zinc mine’s historic resource estimate. The company is also looking to explore the mine’s Campo Cielo region, where more high-grade zinc oxide mineralization has been discovered. There is also the potential for zinc sulfide deposits found in geologically deeper zones.

At the Charlotte Bongará project, further exploration is needed to delineate the high-grade zincoxide mineralization present on surface.

Investment Highlights

  • Among a select few new zinc companies with near-term production potential.
  • Past production record at Bongara zinc mine shows a greater than 90 percent recovery rate.
  • Key assets include some of the highest-grade zinc deposits in the world.
  • Exceptionally high-grade, on surface resource amenable to simple open pit mining methods, minimizing operational cost.
  • Access to past data and exploration records expected to expedite the permitting process.
  • 2019 exploration plans to update recently released resources estimate.
  • Charlotte Bongará project and other potential targets add up to strong blue-sky potential.
  • Deposits are located in Peru, historically an attractive mining jurisdiction.

Well-situated in friendly mining jurisdiction

Both the Bongará and Charlotte-Bongara projects are located in Peru a well-established and attractive mining jurisdiction with clear permitting regulations. The communities in the area are receptive to mining projects because they create jobs and improve infrastructure. Reclamation and remediation efforts have also left positive associations and laid the groundwork for a rewarding and mutually-beneficial relationship going forward.

The Bongará Zinc Mine

The Bongará zinc mine encompasses 8,000 hectares, with high-grade zinc oxide mineralization appearing over 1.2 kilometers. The mine has delivered value before with the former operator having mined 148,000 tonnes of zinc here between 2007 and 2008. Zinc One is confident that the current historical resource estimate undervalues the mine because of the disparity between what was anticipated and what was actually mined.

2019 resource estimate

In February 2019, Zinc One released an updated resource estimate at Bongará using a 10 percent cut-off grade. The estimate outlined an indicated mineral resource of 812,000 tonnes grading 18.9 percent zinc and an inferred resource of 1.33 million tonnes grading 16.8 percent zinc. Zinc One intends to expand the resource with future exploration on undrilled targets. Click here to view the full report.

zinc one resource estimate

Zinc deposits in the ninety-eighth percentile for grade

Historic estimates place the zinc grade at over 20 percent. This level of grade is rare, putting the Bongará deposits in the ninety-eighth percentile globally. Once back in production, the Bongará project could rank among the world’s highest-grade zinc mines allowing for near-term cash flow that will enable Zinc One to advance other targets.

Proven metallurgy suggests a greater than 90 percent recovery rate

It can be challenging to extract zinc from non-sulfide ores, but the Bongará mine has an impressive recovery rate: the mine’s previous operator saw a greater than 90 percent recovery for its zinc oxide mineralization. They used a Waelz kiln, the same simple processing method Zinc One plans to use. The company expects to see a similarly impressive recovery because the metallurgy is proven.

High value per tonne

Initial production will be concentrated at the Bongará zinc mine, with management planning to mine 500 tonnes per day initially. With a zinc grade of over 20 percent, each tonne is worth approximately $550 on surface.

“The high-grade Bongará zinc-oxide project will be our major focus in the near term. We also firmly believe that there is substantial upside for additional high-grade, zinc-oxide mineralization along the six-kilometer-long trend of the known mineralization from Mina Grande in the southeast to Charlotte Bongará to the northwest,” said Roehlig.

Ongoing exploration

Sampling work conducted in 2017 and early 2018 confirmed high-grade values across the Bongarita, Mina Chica, Mina Grande Sur and Mina Grande Norte zones. Zinc One’s 2018 drilling program continued to validate these results, showing high-grade intersections across three of the four areas.

Results included 2.4 meters of 38.1 percent zinc at Bongarita, 21 meters of 27.5 percent zinc at the Mina Chica zone, as well as 20.5 meters of 34.3 percent zinc and 8.2 meters of 42.7 percent zinc at Mina Grande Sur.

Zinc One is continuing its exploration at Bongará with the intent of releasing an updated and expanded resource estimate for the property. The company will be testing undrilled areas between the Mina Chica and Mina Grande Norte targets and will continue working on the Campo Cielo target.

The Charlotte Bongará Project

The Charlotte Bongará project is primarily where Zinc One sees its blue-sky potential. Approximately 3,115 hectares in size, the area has already been subject to extensive upside exploration.

Past exploration shows promise

Approximately 95 drill holes from previous programs across 7,722 meters have shown high-grade near-surface drill intercepts of zinc oxides: 29.5 percent zinc across 15.5 meters, 26.1 percent zinc across 12.5 meters, and 29.7 percent zinc across 11.5 meters. Zinc One benefits from all previous research and exploration in the area, which should allow the company to expedite development and permitting.

Management

Gunther Roehlig—Interim CEO

Gunther Roehlig has more than 15 years of experience in the financial and investment industry. In particular, Roehlig has experience in restructuring, managing and financing junior public companies. Most recently, Roehlig served as the president of Terra Ventures Inc., which held a 10-percent stake in the high-grade Roughrider uranium discovery owned by Hathor Exploration. In May 2011, Terra Ventures was acquired by Hathor Exploration – Hathor was then subsequently acquired by one of the world’s largest mining companies, Rio Tinto, in late 2011.

Greg Crowe—Director

Greg Crowe is a professional geologist with more than 35 years of exploration, business and entrepreneurial experience throughout North America, Latin America, Africa and Southeast Asia. Since August 2016, Crowe has served as Chief Executive Officer, President and director of Silver One Resources Inc., a mineral exploration company with silver projects in Mexico. Previously, Crowe served as a director, Chief Executive Officer and President of Entrée Gold Inc., a mining company listed on the TSX, from May 2003 to November 2015. Crowe was also co-founder and President of Azimuth Geological Inc., a private consulting company specializing in exploration and management services for junior and major mining companies such as Rio Algom Ltd., the Prime Group and Westmin Resources Limited.

Barry Girling—Director

Barry Girling has been active in various aspects of mineral exploration since 1977. He couples his geological understanding with a B.Com. Finance degree (U.B.C. 1990) to provide consulting services to a number of TSX Venture Exchange companies. Since August 2016, Girling has served as a director of Silver One Resources Inc., a mineral exploration company with silver projects in Mexico. He has strong capital markets experience gained as a founder and director of Foundation Resources Inc. and Search Minerals Inc. Girling was also a director of Roxgold Inc. from August 2006 through September 2102 and completed the re-organization of Roxgold Inc. as well as the acquisition of its Burkina Faso gold property. Aside from BRS, Girling was President and CEO of Birch Hill Gold Corporation from November 2012 until it amalgamated with Canoe Mining Ventures in June of 2014. He continues as a director of I-Minerals Inc. and Kiska Metals Corporation.

Natasha Tsai—CFO

Natasha Tsai is a Chartered Professional Accountant with Malaspina Consultants Inc. Prior thereto, she was a senior accountant with Grant Thornton LLP. She has acted as CFO and/or controller of a number of listed companies, including Hello Pal International Inc., ImmunoPrecise Antibodies Ltd. and PPX Mining Corp, and has corporate finance and listed company experience in a number of sectors. She has a Bachelor of Commerce degree.

Dr. Chris Wilson—Consultant

Dr. Wilson is an independent consultant geologist with 30 years of global experience in mineral exploration and mining. He has worked in over 70 countries, on most commodities and deposit styles, from grass roots through resource definition to feasibility. Chris has significant public market experience. This includes project and deposit review and valuation; design of acquisition strategy including earn-in, joint venture, equity and debt financing; merger and asset purchase; value-added exit strategy; and acquisition and contract negotiation. Dr. Wilson is a Qualified Person for JORC and NI 43-101 compliant reporting and valuation.


 

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