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In a sector outlook piece released today, Dundee Capital Markets said that its “positive zinc thesis is unchanged.” Put simply, the firm believes that major zinc mine closures in addition to “structural issues in the zinc industry” will begin to push prices for the metal up at the end of the year.
In a sector outlook piece released today, Dundee Capital Markets said that its “positive zinc thesis is unchanged.” Put simply, the firm believes that major zinc mine closures in addition to “structural issues in the zinc industry” will begin to push prices for the metal up at the end of the year.
As quoted in the market news:
We estimate that roughly 1.6 million tonnes of zinc in concentrate production (representing about 15% of global supply) will be shut down over the next four years. This waning of supply began in the middle of last year with the closing of Xstrata’s (now Glencore’s) Brunswick Mine in New Brunswick. Important pending mine shutdowns include, Minmetal’s Century Mine in Australia (2014), and Vedanta’s Skorpion Mine in Namibia (2014).
Trevali Mining Corp. (TSX:TV) is Dundee’s top stock pick. Other companies the firm likes include:
Other zinc-levered producers we highlight include Hudbay Minerals (HBM-T, BUY), Lundin Mining (LUN-T, top pick BUY, $5.60), Nevsun Resources (NSU-T, BUY, $5.50) and Teck Resources (TCK.B-T, BUY, $33.00). Earlier-stage zinc equities we highlight include Canadian Zinc (CZN-T, BUY, $0.70), Rathdowney Resources (RTH-T, NEUTRAL, No Tgt), Tirex Resources (TXX-T, NEUTRAL, No Tgt), TriAusMin Ltd. (TOR-T, NEUTRAL, No Tgt), and Zazu Metals (ZAZ-T, NEUTRAL, No Tgt).