The company says zinc production at its Alaska-based Red Dog mine will be 50,000 tonnes higher than originally expected this year.
Diversified miner Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) increased the zinc production guidance for its Red Dog operation in Alaska on Monday (September 18).
Red Dog’s zinc output is now forecast to come in 50,000 tonnes higher than originally expected due to improvements in recovery, the company said in a statement. Under this year’s new guidance, zinc production should range between 525,000 and 550,000 tonnes.
Red Dog is the world’s second-largest zinc mine, accounting for 79 percent of US output. Last year, its zinc concentrate production came in at 583,000 tonnes.
Over the next five years, the company estimates that production at Red Dog will be between 475,000 and 550,000 tonnes of zinc annually. It is aiming to finish a $110-million mill upgrade project before 2020, and that could increase throughput by 15 percent until the end of the mine’s life in 2031.
In Monday’s release, the company also provided an exploration update for its nearby Aktigiruq deposit, for which it has yet to release a mineral resource estimate.
“[The] exploration results at our nearby Aktigiruq deposit show its potential to be one of the best undeveloped zinc deposits in the world,” said Don Lindsay, Teck’s president and CEO. The data has led the company to set an exploration target of 80 to 150 million tonnes of mineralization at 16 to 18 percent combined zinc and lead.
The news that Teck will boost production at Red Dog comes at a time of higher zinc prices. Last month, LME zinc prices hit their highest level in a decade, breaking the $3,000-per-tonne mark to reach $3,111 on August 16. On Monday, LME zinc closed up 1.8 percent at $3,0865.
Many analysts remain bullish on the base metal for the rest of the year, as Chinese environmental regulations continue to increase concerns about supply.
Looking ahead to the next few months, FocusEconomics panelists estimate that the average zinc price for Q4 2017 will be $2,843. The most bullish forecast for the quarter comes from BMO Capital Markets, which is calling for a price of $3,527; meanwhile, Euromonitor International is the most bearish with a forecast of $2,309.
On Monday, Teck’s share price closed up 1.66 percent in New York at $21.41. The company’s share price has surged 6.89 percent since January.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.