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The news was no doubt welcome for Founder and Executive Chairman Robert Friedland, who’s said in the past that he is bullish on zinc and copper.
Ivanhoe Mines (TSX:IVN) is perhaps best known for its well-known founder Robert Friedland, but the company’s work at its three key projects — Platreef, Kamoa and Kipushi — continues to show that there’s more behind it than a famous name.
It was Kipushi, a past-producing zinc-copper mine, that was in the news on Monday. The occasion? Ivanhoe reported finding “exceptionally high-grade silver, zinc and copper drill intercepts” in the third batch of assay results from underground drilling at the project.
The highlight was KPU040, the first hole “drilled through the historical Big Zinc zone from the hanging-wall drill drift on the 1,272-metre level.” It intersected 70 meters grading 43 percent zinc, 5.5 percent copper, 244 grams per tonne (g/t) silver, 71 g/t germanium and 0.1 g/t gold. About half of that intercept includes a “precious-metals-rich, very high-grade copper-zinc zone,” which returned 34.5 meters grading 35.1 percent zinc, 10.7 percent copper, 479 g/t silver, 77 g/t germanium and 0.3 g/t gold.
Commenting on the results, Friedland said they’re significant in part because while Kipushi is known to have produced copper and zinc in the past, mine records don’t mention precious metals production. He explained, “our discovery of high-grade copper-zinc-silver mineralization with significant gold and germanium values within the Big Zinc zone confirms our hypothesis that copper zones, which also are rich in precious metals, exist within the deep, unmined portions of the Kipushi Mine. These zones now present new and compelling targets for our ongoing exploration.”
Other intersections indicate the potential to expand the southern limit of the historical Big Zinc resource.
Friedland bullish on zinc, copper
Monday’s news was no doubt welcome for Friedland, who’s made no secret of his optimism about zinc and copper.
For instance, the mining magnate was quoted in a March Salman Partners note as saying that zinc “is now recognised, along with potash, as one of the most intense organic fertilisers.” That might sound a little outlandish given the dominance of potash, phosphate and nitrogen fertilizers, but according to Friedland, countries including China and India require zinc fertilizer. “Some 60 per cent of soils in [those countries] have been depleted of zinc … [s]o China has mandated that fertiliser should include zinc,” he said, adding that the order “has enormous implications for demand.”
Meanwhile, he said at this summer’s Sprott Vancouver Natural Resource Symposium that the copper story is “compelling,” pointing to supply issues and growing demand for the metal as positive.
That said, according to Lars-Eric Johansson, Ivanhoe’s CEO, Monday’s germanium and silver results are also nothing to sneeze at. He commented, “[a]t current spot prices of approximately $1,900 a kilogram (approximately $59 per troy ounce) for germanium and $16.50 an ounce for silver, the germanium and silver grades have the potential to significantly add to the overall metal value at Kipushi.”
The future
Monday’s press release states that Ivanhoe has now completed 62 holes at Kipushi for a total of 12,000 meters. All in all, it plans to drill 20,000 meters at the project.
Moving forward, investors can thus expect to see further drilling at Kipushi. Two rigs are currently in the midst of completing “confirmatory drilling of the Big Zinc zone from the hanging-wall drill drift on the 1,272-metre level.” Deep drilling is planned as well, while further assays are also due out in the near future. Results from holes 48 through 62 are pending, as are results from hole 46.
At close of day Monday, share of Ivanhoe were selling for $1 each after rising as high as $1.04 earlier in the day.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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