VIDEO - Donald R. Taylor: “Right Now Zinc is the Hot Commodity”

Base Metals Investing
Zinc Investing

Taylor, who’s COO of Arizona Mining, received an award from PDAC this year for the 2014 discovery of the Taylor lead-zinc-silver deposit.

Donald R. Taylor, chief operating officer of Arizona Mining (TSX:AZ), received an award from the Prospectors & Developers Association of Canada this year for the 2014 discovery of the Arizona-based Taylor lead-zinc-silver deposit.

Taylor took some time to chat with the Investing News Network during the conference about receiving the award, saying it is a “true testament to all of the employees at Arizona Mining.”

According to Taylor, Arizona Mining is now sitting on “one of the largest lead-zinc deposits in the world.” He believes zinc is a “hot commodity” with a positive forecast over the next few years and a concentrate supply gap forecast for this year.

He added that the company hasn’t found the edge of the deposit and said it has continued to grow while maintaining grades, “so we’re very happy about that.” In terms of future company plans, Taylor noted that Arizona Mining has permits in place to start phase 1 of its tailings facility at the site, and is currently building a water treatment plant. The firm released a preliminary economic assessment in January that increased ore reserves by 39 percent; another 43,000 meters of drilling has been done since then.

Taylor expects the latest drill results to add to the resource ahead of a feasibility study that is expected to come out in July or August of 2018. Taylor said Arizona Mining  plans to enter production by late 2020. He added that since the deposit is located on private land, “we actually are okay for the first somewhere between seven and 12 years, and then we’ll be looking for federal permits.”

Watch the interview above for more insight from Taylor, or read the transcript below. You can also click here to view our PDAC 2018 playlist on YouTube.

INN: I hear you’re up for an award this year at the conference? Can you talk a bit about that?

DT: I am. We’ve actually won the Thayer Lindsley Award for the Best Global Discovery and it’s just a real true testament to all of the employees in Arizona mining. So it’s gotten us a lot of recognition and we’re very proud of it. So yes, it’s a really good deal. Very good distinction for a very large deposit.

INN: Can you talk a little bit about that discovery? How came about and what’s happening with it?

DT: Yes, we actually picked the property up on a name of Wildcat Silver in 2006. We were actually originally working on an oxide manganese silver deposit, and in the exploration of that we saw some things and elements in the deposit that indicated that there might be a bigger sulfide deposit in depth and so we took that. We changed the exploration model a bit and went out and took five drill holes basically and tested that theory and the rest is as they say is history. Now we’re sitting on one of the largest lead zinc deposits in the world.

INN: And what’s happening with that now? I’ve seen some news recently there’s additional drilling. What’s happening there?

DT: Well we unfortunately or fortunately we haven’t been able to find the edge of the deposit so it’s get much bigger. And also with that we’re seeing that the grades are maintaining and so we’re very happy about that. But on the other side we’re starting to develop, we’ve picked up our operations team and we’re starting to build some of the facilities around the deposit and the operation. And we’re pushing forward to get into production by late 2020.

INN: That’s very exciting. So obviously, silver, lead and zinc, what’s the outlook for those metals?

DT: Well right now, zinc is the hot commodity and you know, the predictions for it from the short term over the next several years is very good because there’s not a lot of zinc producers coming online. Lead is kind of its ugly twin sister that nobody ever talks about but actually lead is out produced percentage-wise increase in price over zinc for the last six or eight months. So, we’re very happy to be in both metals and then obviously we’re hedged with the high silver content. So, feel very good about the commodity mix.

INN: I want to talk a little bit about jurisdiction — I don’t think we’ve mentioned where this project is for those who might not know.

DT: We’re in Southern Arizona, about 60 miles southeast to Tucson. We’re eight miles north of the Mexican border and so in a very remote area. Fortunately we’ve got good access to infrastructure, roads and such. But yes, the jurisdiction is good. We’re mainly on private lands and so we’ll be developing deposit on private lands. And then national forest surrounds us and so we’ll be looking for federal permits after we’re in production. We actually are okay for the first somewhere between seven and 12 years and then we’ll be looking for federal permits.

INN: And you’re looking to enter production?

DT: Late 2020

INN: Late 2020. What has to happen before then? Maybe just kind of walk us through it. Is there a timeline in terms of what’s happening in 2018, for example?

DT: Absolutely. Big thing is we’re still exploring, so we continue drilling but we’ve actually got the permits to start Phase I of our tailings facility. We’re doing that now. It’s underway, under drain collection pond which is the link between the tailings facility and the water treatment plant which is also under construction right now. So, the big hitters for us in 2018 is it will be complete a feasibility study in late July or August. We’ll also have– we’re going to start an exploration decline end of the deposit late Q2 early Q3. And again that gives us underground access for more drilling and those sorts of things, activities, pre-development, pre-construction, so that’s good. And then we’ll look into financing sometime late in the year. Obviously we’re going to decide with finance on how we’re going to build this and that will come off the back of the feasibility study. So those are really the big things for us this year. We got to amend some permits to be able to finalize construction for the mill and that will all happen in the latter part of this year.

INN: Great. Can you talk about yourself for a bit? There’s a lot of focus being put on the management team and maybe you can just talk about that a little bit?

DT: Focus on me is the most uninteresting part of the story, but we’ve actually brought in and we’ve got a great cast of characters you know to build this thing. Richard Warke is well known in the finance business. You know, Richard’s head a few companies have been bought and sold, world class assets, one in Columbia for a billion and a half dollars and then most recently Rosemont, another asset in Arizona and sold the Hudbay for US$665 million dollars. And so he’s well known. We were able to attract Jim Gowans, well-known name in the business to come in and work with us. Jim has taken over the CEO’s role. And so Jim was instrumental, worked in the diamond business. He’s worked in the lead-zinc business. He was actually instrumental in building Red Dog. So anyway, great experience there. And then most recently, we brought in Johnny Pappas on the permitting side. Johnny was instrumental in getting the permit for the Haile Mine out in South Carolina. And so, he’s been a good addition. Greg Lucero long time employee local who’s very well tied in the government and government relations and so he’s made our path to getting these permits much easier as well. And then, we built the team on down. We’ve looked for Tier I guys to come in because we believe we have a Tier I asset. And so, we’ll continue to add to that team as needed and you know we just got our heads down and planning to build this thing.

INN: Great. Is there anything else you wanted to to talk about, about the project and goals throughout the year?

DT: I mean there’s a lot to talk about but you know the story’s a good one. That thing I hear the most is I missed it. I hear– when it was a buck, I heard, we missed it and when it was two bucks I heard we missed it. Well it’s a little over four today and people are still saying, “Well we’ve missed it.” I don’t think anybody’s missed the opportunity yet. I think they’re still a lot run in the stock and as we create value, going forward with our development activities and continue the exploration, I think we’ll only see the stock climb and the company get stronger. There’s a lot of things going on. This last update we did PEA in January, we actually increased the ore reserve by 39 percent and we didn’t drop the grade any. Since that was put out, we’ve actually drilled another 43,000 meters of drilling and that will be, I think, very accretive to the resource that we put out in our feasibility study. And that’s when the numbers really start to get hard and people really understand what a true giant this deposit is going to be. And so anyway– So it’s still all pretty exciting. So anyway.

INN: Right before this interview, somebody came up to you and gave you a recommendation. So you know, there’s a fair amount of excitement clearly?

DT: There is, yes. We’ve had a lot of conversation both from the investing side and the technical side this year. People are starting to understand the story better. I’m not sure if we haven’t done a good job of telling it or if people have got a poor job of listening, but anyway, I think the story is out now more than it ever has been and people understand it better. And again the award this year was, a part of that the people understanding the story better so. Anyway, we’re just excited to be here. That’s all.

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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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