Zinc One Resources CEO Jim Walchuck (TSXV:Z,FWB:RH33,OTCMKTS:ZZZOF) believes the company is headed toward a stream of news following the results from the sampling program on its zinc properties in Peru.
The company is anticipating a couple of significant catalysts in the near future, including the launch of a drilling program that should, according to Walchuck, confirm or improve upon the project’s historical resource. Zinc One will also be conducting engineering studies and metallurgical work that will be necessary for a preliminary economic assessment (PEA).
Below is a transcript of our interview with Zinc One CEO Jim Walchuck. It has been edited for clarity and brevity.
Investing News Network: Please give our investor audience an overview of Zinc One and its flagship properties, the Bongará and Charlotte Bongará projects in Peru.
Zinc One CEO Jim Walchuck: Peru is a known stable mining jurisdiction and the properties are located near a highway in an area with strong support from the local communities. The properties were first discovered by Noranda and have been explored since 1974, but this is the first time that they have been consolidated into one package.
Our flagship is the Bongará property, which has high-grade zinc sitting on surface. It was previously operated and mined for a year and a half until mid-2008, prior to the market collapse. During this time, ore was transported 540 kilometers to be processed offsite. Despite the shipping costs, the company was still able to profit from the project and see a high rate of recovery from its plant. To reduce costs, we plan to have a Waelz kiln on site to process the ore, enabling us to ship only concentrate instead of the ore.
We recently received a permit for 124 drill platforms with drilling expected to commence in January 2018. Instead of drilling individual holes, Peru permits platforms on which more than one hole can be drilled. With our upcoming drilling program, we hope to match or improve the property’s historical resource. We believe that the chances of getting this property into production are very high, and that a PEA will demonstrate that it is a financially viable project.
INN: Since the acquisition of your Peruvian properties in June 2017, what work have you completed on the projects to date?
JW: Since acquiring 100 percent of the properties’ mineral rights, we have taken high-resolution satellite images of the property, which will support our engineering studies. We have also been able to halt the reclamation of the project in order to take full control over the environmental impact assessment (EIA) and ensure it remained in effect. Having this EIA remain valid aided our efforts in obtaining the permits for our drill platforms.
Other work we have done includes a sampling program in the northern area of the mineralized zone, the results of which were released in early November. The highest-grade channel sample in this program showed 47 percent zinc over 8.1 meters. Other high-grade examples from the sampling program include a channel sample that yielded 29 percent zinc over 51.2 meters and a pit sample that was 36 percent over 6 meters. These results confirmed the presence of high-grade zinc that should add to the existing resource.
We have engaged Watts, Griffis and McOuat to analyze all the geologic data and issue a new NI 43-101 technical report on the resource. We have also hired an engineering firm, NovoPro Projects, to help develop the PEA and to conduct some of the metallurgical work, which we want to begin as soon as possible. What is unclear is whether we will follow the PEA with a prefeasibility study or whether we will move directly to a feasibility study. We will have determined that by the time the PEA is issued.
INN: Please tell us the highlights from your sampling program and what they mean for the project.
JW: The purpose of our program was to better understand the geology and grade in areas that will influence our upcoming resource calculation where we hope to match or improve upon the historical resource. I would welcome investors to review our recent news releases and explore our website to see the full sampling results from the program.
INN: Please tell us about the approval for the 124 drill platforms at the Bongará project. What does this mean for the project moving forward?
JW: That’s the catalyst, isn’t it? With the approved platforms, we can mobilize the drill contractor and start our program in January 2018. While everything else we are doing is very important, the drill results will drive the project forward.
The Peruvian Ministry of Energy and Mines, which is in charge of granting us the permits, has been very supportive, as has Peru in general. Peru is a wonderful jurisdiction that understands mining. Once we are drilling, samples will be sent for lab analysis, which will allow us to subsequently release results to the market. This will create a consistent flow of news to keep our shareholders informed.
INN: Are there any other upcoming catalysts for Zinc One that you would like to share?
JW: The biggest catalyst is the drill program, followed closely by the engineering and metallurgical work for the PEA. At this rate, we should be able to share the results of the resource estimate soon after we receive the results from our drill program, with a PEA following shortly thereafter.
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