Friday, September 21, 2018Canada's Leading Online Business Magazine

Canada Zinc Metals

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Tonnes of Possibility

Canada Zinc Metals is a mineral exploration company focused on the potential of a mining district in northeastern British Columbia. The company is the dominant land holder in a prolific mineral belt called the Kechika Trough, hosting in excess of 80 million tonnes of base metal resources—primarily zinc, lead and silver. Canada Zinc owns 100 per cent of two key projects—Akie and Kechika Regional—and works at the Cirque deposit, only 20 kilometres from the Akie project.

“The Kechika Trough is our sole focus,” says Jim Mustard, President of Canada Zinc Metals. “Geologically, the rocks are the same as the Selwyn Basin, in the Yukon, and on a global scale these types of rocks host numerous world class producers. We feel that there is significant potential for new discoveries and with 80 million tonnes already outlined, this is truly a world-class setting that we largely control.”

Coming into the Canada Zinc story about a year and a half ago, Mustard knows the area very well. “I have worked in the same rock types for years and I am cognisant that this district was never fully explored,” he explains. “A number of things caused the original companies to move on by the late 1980s—the remote location and the lack of infrastructure. In the intervening time, significant development has occurred and is one of the reasons why I joined the company. There is an extensive network of roads that now provide access to our project, as well as a rail system nearby. We’re also close to the grid power, providing great opportunities for a company like ours.”

Global and Local Potential
Like most base metal companies, Canada Zinc is feeling the effect of the recession. They are mindful that junior mining companies have to continue to finance themselves in the equity markets and are decreasing expenditures to compensate. That said, Canada Zinc is moving forward on its key project, Akie. Due to its proximity to the railway system, they are seeing opportunities in expanding to global markets.

“We have been able to attract a number of interested corporations and large mining companies,” explains Mustard. “Not only are we in a world-class setting, but we’re in a geo-politically safe jurisdiction where we can operate 12 months of the year, when set up to do so. We can provide many of the attributes that major companies seek on a global basis—a potential long life mine operation, significant exploration blue sky and a secure mining jurisdiction. These aspects tend to be very rare in combination.”
“To that end, we have announced the terms of a financing with a Chinese company called Tongling Non Ferrous Group Holdings, a major base metal producer in China that wants to expand their lead and zinc smelting operations. We feel that it’s a significant move for us and them as they are seeking a long-term source of concentrate to feed their infrastructure in China. Canada Zinc could easily ship concentrate from our property via the rail system through the ports of either Vancouver or Prince Rupert, and land it in their facility at a cost-competitive price. I think Tongling Non Ferrous has decided that now is an ideal time to develop a relationship with lasting potential.”

In the meantime, Canada Zinc is not immune from being buffeted by lower metal prices, but is very confident that the demand will increase when it is able to produce from the project. It also expects higher future base metal prices around the world—a silver lining amidst the wait.

“You can easily cease production, but it’s very difficult to start production—it takes time to get new projects permitted and built. I predict that when the market recovers and the global infrastructure expenditures start to create increasing demand for lead-zinc, the supply cycle will struggle to keep up. I think we’ll see a dramatic increase in metal prices.”

Hope to the community
The success of the Kechika Trough and the Akie matters to more than just Canada Zinc Metals. The region in which their property lies has suffered significant economic decline and future growth is important to the entire district of northern British Columbia. The mountain pine beetle infestation has devastated the local forestry industry and the local economy is suffering as a result. Mustard hopes that the benefits of developing their deposits can stimulate economic growth once again. “Because of the significance of our asset, I truly believe there’s potential to have a large impact on the region,” says Mustard. “We are within the beetle kill area where forestry has essentially been shut down. This issue shines a light on us as a catalyst for economic rejuvenation in the longer term. Our ability to expand on a global scale could mean sustainability in the region, beyond the current focus on logging.”

Years to come
The next step for Canada Zinc Metals is two-fold. First, they have a great portfolio of properties that are—as Mustard says—just begging for additional exploration and target generation. Second, they have to move forward on the Cardiac Creek deposit (on the Akie property), going through the pre-feasibility and feasibility studies to determine viability. The project will likely involve more drilling and underground definition. And, of course, its timing is subject to financing.

Overall, Jim Mustard is encouraged about what’s in store for Canada Zinc Metals. “I envision a regional mine operation that could well exceed 25 to 35 years, once commenced,” Mustard concludes. “Given the size of the resource and the long-life opportunity, there’s a great possibility that this can be achieved.”

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