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After a bleak finish to 2015—where the zinc price dropped 26.76 percent for the year from $0.99 to $0.69—zinc is making significant gains in 2016.
After a bleak finish to 2015—where the zinc price dropped 26.76 percent for the year from $0.99 to $0.69—zinc is making significant gains in 2016.
Year-to-date, the metal has bumped up to $0.83, an increase of 19.71 percent on the year. The improved zinc price is in part due to the Canadian mining sector getting a boost by recovering gold prices, which improved 16 percent in the year’s first quarter.
Others say the improvement in base metals, such as zinc, has failed to offset the loss of confidence due to concerns about growth in China and the demand for metals.
Although the zinc mining district in Canada has declined over the last few years, having produced 300,000 MT of zinc in 2015, down from 2014’s production of 340,000, the price increase is still promising.
Stefan Ioannou, mining analyst at Haywood Securities, told Investing News Network (INN) that “things are shaping up for the zinc price to move toward the end of this year,” which he added has been a long time coming.
“We are starting to see a number of significant things happen,” he said, adding the most telling point for higher zinc prices sooner than later is the treatment charges for 2016 that have been negotiated have come down significantly since 2015.
“It’s not going to be tomorrow,” Ioannou said about the zinc price making drastic improvements. “I think there’s general consensus that the gears are in motion for later this year.”
Some report the zinc price forecast for 2016 is up to $219, at $1,932 per tonne and steadily increasing by 2017, at $400, or $2,100 per tonne.
A poll done by FocusEconomics in its May 2016 Consensus Forecast indicates analysts expect the zinc price to average $1,840 per tonne by the end of the year, and gradually rising throughout 2017 to $2,043 per tonne by the fourth quarter.
With a positive future on the horizon for the Canadian zinc mining market, INN took a closer look at some of the metal’s mining companies in Canada who have made progress.
Canadian Zinc Corporation (TSX:CZN)
Canadian Zinc has made a significant boost year-to-date, jumping drastically by 66.67 percent to $0.07. Over a one-year period, the company has dropped 2.78 percent, but 2016’s significant gains are positive for Canadian Zinc.
Since 2012, the company has put its efforts into another area of interest in Newfoundland, having acquired Paragon Minerals (TSXV:PGR) and its precious metal projects including the South Tally Pond Project. A year later, Canadian Zinc also acquired Messina Minerals (TSXV:MMI) and its Tulks South and Long Lake projects.
In the company’s financial results for the first quarter of 2016 and operations update release, it states its focus for 2016 will to be continuing the advancement of the Prairie Creek Mine towards production.
Margaux Resources (TSXV:MRL)
Over a one-year period, Margaux Resources has seen positive results with a 25 percent increase, which hasn’t changed so far in 2016: since the beginning of the year, the company’s year-to-date remains at the 25 percent jump to $0.05.
The company, located in Calgary, is currently focused on their Jersey Emerald Tungsten-Zinc Property in BC, but hasn’t posted any press releases on its website since 2014.
Canada Zinc Metals (TSXV:CZX)
Canada Zinc Metals has been focusing on its Cardiac Creek deposit in British Columbia since 2005. In May, the company announced that indicated resources have increased by almost seven million tonnes to 19.6 million tonnes grading 8.2 percent zinc. This is a 55 percent increase when compared to the previous indicated resource estimate from 2015.
Year-to-date, shares of Canada Zinc have boosted 7.41 percent, or $0.01, despite an overall dip of 40.82 percent for a one-year period.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
