Kootenay Zinc Corp. (CSE: ZNK) (OTCQB: KTNNF)

Kootenay Zinc Corp. (CSE:ZNK) (OTCQB:KTNNF) is a mineral exploration and development company focused on discovering large-scale sedimentary-exhalative (“SEDEX”) zinc deposits. Based in Vancouver, British Columbia, the company is ideally positioned near its primary target, the Sully Property, located 18 miles east of the world-class Sullivan Mine.

Of the 22 raw materials tracked by the Bloomberg Commodity Index, zinc was the best-performing base metal in 2016. Based on a widening global supply deficit, outlook for the commodity remains strong. As the most closely tied base metal to the Chinese economy, zinc demand and prices are expected to rise well into the year 2020, putting increased pressure on zinc supply.

For 2017, Goldman Sachs has predicted a 360,000 ton shortage of zinc, along with a subsequent rise in zinc prices to $2,500 per metric ton in the first half of the year. Zinc continues to make history in the metals exchange, driving significant interest in the market amid supply constraints in concentrates and refined metal drive prices.

Ready to claim its share of the market, Kootenay Zinc is focused on its Sully Property. It comprises 1,375 hectares and overlies rocks of similar age and origin as those which host the legendary Sullivan deposit. The Sullivan Mine was discovered in 1892, and is known to be one of the world’s largest SEDEX deposits. Over its 100-year lifetime, Sullivan produced approximately 150 million tonnes of ore, including approximately 300 million ounces of silver, 8 million tonnes of zinc and 8 million tonnes of lead.

Notably, geophysical data suggests that Kootenay Zinc’s Sully project and Sullivan share many geological features:

  • Strata at Sully are in the same sedimentary basin as the Sullivan Mine
  • The exact stratigraphic time horizon at which Sullivan formed is present at Sully
  • Filtered AeroMag anomalies coincident with Sullivan Time at Sully appear similar to Sullivan
  • Gravity anomaly at Sully indicates excess mass of comparable magnitude to Sullivan
  • Pb-Zn is present as traces in outcrop, drill core and in a soil geochemical anomaly

The squeeze in zinc supplies particularly affects China, which is both the world’s largest zinc consumer and its largest producer, with 4.9 million tons of output in 2015. Chinese manufacturers are now being forced to import zinc for use in cars, household appliances, paints, rubber products and smartphones.

Zinc’s rally shows no sign of slowing down in the near future, and companies that currently occupy stake in a zinc deposit find themselves in an enviable position over miners rushing to find new reserves. With its Sully Project, Kootenay Zinc could be on track to capture its share of the market, guided by a management team of mining directors and executives that currently lead some of the world’s best mining companies and have been involved in world-class discoveries which sold for billions of dollars. The company’s technical team includes industry experts that have worked on mega-mining projects, including the Sullivan and Voisey Bay projects.

Historical Price Chart – Zinc

zinc-price-chart

Investment Considerations
  • Zinc is the top performer of the 22 raw materials tracked by the Bloomberg Commodity Index
  • Global outlook for zinc remains strong as growing supply deficit drives increase in prices
  • Sully Project located near world-class Sullivan Mine, which has historical production value of US$49B at today’s prices
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