By Daniella D’Alimonte – Exclusive to ZincInvestingNews.com
Vancouver-based Teck Cominco (TSX: TCK.A, TCK.B) has recently dropped US$4.05, or 8.4 per cent, to US$44.37 as the price of zinc and coal continue to fall. Teck has not fallen this much since July 23, 2002.
Zazu Metals Corporation (TSX: ZAZ) also had a notable drop this week of US$0.11, or 16.7 per cent, to US$0.53.
Zinc has remained under US$0.83 per pound for the last month, largely due to an oversupply. It is predicted the low price of zinc will eventually force some mines to shut down. This could lower the current supply within 18 months. However, other companies are continuing to conduct exploration projects.
Alexco Resource Corp. (TSX: AXR) has released first results from its drilling program in the Yukon. Its Keno Hill Project has continued to uncover high grade zinc-silver mineralization in addition to initial findings it made in 2007. It plans to release an updated resource estimate in Q3. The current findings at this project, located in the Onek mine, are well below Onek’s previous mining depths. These had produced 90,000 tons of resources, 3.43% of which was zinc.
Klondike Silver Corp. (TSX-V: KS) recently announced its 2008 exploration plan at Slocan camp in southeastern BC is well under way. Past production from its main Sandon camp area has yielded large deposits of zinc as well as silver and lead.
Vancouver’s Fortuna Silver Mines Inc. (TSX-V:FVI) , operator of the Caylloma mine in Peru, also plans to step up mine production. It intends to increase that of zinc, as well as silver and lead, by 50 per cent. This decision was made due to the current market surge in the price of most metals.
This year, gains from initial share offerings for Canadian mining companies have been on the decrease. This situation could be harmful for mines in the exploration stage. It also paves the way for mergers and acquisitions. Some companies have already begun this process.
The completion of Jinduicheng Molybdenum Group Ltd. and Northwest Nonferrous International Investment Company Ltd. ‘s takeover of Yukon Zinc (TSX: YZC) was announced July 3. Yukon’s 461,210, 491 shares will be acquired at US$0.22 per share.
Gold Hawk Resources Inc. announced a non-brokered private placement on July 3. This includes up to 55,000,000 common shares at a price of US$0.06 per share. The gross proceeds would be about US$3,250,000. Gold Hawk anticipates closing the private placement by next week.
Washington’s Tamerlane Ventures Inc. (TAM: TSX-V) has also announced a private placement, subject to regulatory approval. Nearly four million shares as a cost of US$0.59 per share will produce proceeds of about US$2.15M. Tamerlane intends to use this to fund additional surface drilling at its Pine Point lead-zinc project in the Northwest Territories.
Hudbay Minerals (TSX:HBM) and Skye Resources (TSX:SKR) recently closed a nearly US$93.5M private placement. Hudbay will acquire 12,679,266 common shares of Skye.
An increase in the number of mergers and acquisitions is expected for the second half of this year.
Production has been affected for some mines in Peru for the last few days. This is a result on an ongoing worker strike. It went into its fourth day on July 4, however some union support has dropped off. Peru, the second largest zinc and copper producer in the world and the first largest producer of silver, has experienced gains due to high metal prices. However, mine workers say they have not seen any profit from this. President Alan Garcia is under fire to make changes or face a loss of support in the next election.
In a recent study, concerns were expressed regarding a “no-holds-barred” approach to mining in the Arctic. This study, conducted by 40 experts from six different countries, warns that countries around the world need to work faster to agree upon development, safety and environmental standards in this Northern race for resources. Failing to do so could result in environmental problems and mass militarization as the demand for minerals, energy and fresh water increases.
“This is a world in which many international players anxiously move to outwit competitors and secure tomorrow’s resources today,” reads the report.
Lawson Brigham, the main author of the report compared the situation to a “wild west” scenario.
Nations have until 2013 to submit land claims. Decisions will be made based on the United Nations Convention on the Law of the Sea. However, these decisions aren’t expected until at least 2020.
