logo-loader

Tinka Resources steadily advancing one of the largest undeveloped zinc prospects in world

Published: 11:00 26 Apr 2021 EDT

Snapshot

The company's flagship asset, the wholly-owned Ayawilca project, spans 170 square kilometres in the richly mineralized silver-lead-zinc belt of Central Peru

Tinka Resources Limited -
  • Ayawilca is the best zinc (silver) development project in Latin America
  • Boasts a large resource base
  • Project can be developed faster than most due to favourable jurisdiction, infrastructure, size, and modest capex

What Tinka Resources does:

Tinka Resources Ltd (CVE:TK) (OTCPK:TKRFF) is advancing its wholly-owned Ayawilca project in Peru -  one of the largest undeveloped prospects of the metal in the world.

The asset spans 170 square kilometres (sq km) in the richly mineralized silver-lead-zinc belt of Peru, which is one of the top two global producers of copper, zinc and silver. Only 3 sq km of prospective geology at the property has been drilled so far.

In terms of resource estimates, the Ayawilca Zinc Zone has an estimated higher confidence indicated resource of 11.7 million tonnes (Mt) grading 6.9% zinc, 15 grams per ton (g/t) silver and 0.2% lead, according to a 2018 report. The lower confidence inferred resources stood at 45 Mt grading 5.6% zinc, 17 g/t silver and 0.2% lead.

Elsewhere, at the project, the Colqui silver oxide zone deposit boasts indicated resources of 7.4 Mt grading 60 g/t silver, and an inferred resources of 8.5 Mt grading 48 g/t silver occurring from surface. There is also a tin zone with 14.5Mt at 0.70% tin.

In July 2020, the company published its eagerly anticipated preliminary economic assessment (PEA) for the Ayawilca Zinc zone, which showed the project was "shaping up to be one of the best new zinc development projects in the Americas".

The pre-tax net present value (NPV) was pegged at US$609 million, using metal prices of US$1.20 per pound zinc, US$18 per ounce silver, and US$0.95 per pound lead on a 100% equity basis.

Initial capital expenditure for the mine was put at US$262 million with a pre-tax IRR (internal run rate) of 37.2%. The mine life is 21 years with average head grades of 6.05% zinc, 18.3 g/t (grams per ton) silver, 67.1 g/t indium, and 0.25% lead.

Processing will be through a standard crushing and grinding circuit followed by froth flotation, concentrate thickening and filtration. The operation will produce a zinc concentrate and a lead concentrate.

It is worth noting that the Ayawilca zinc zone has not been fully delineated and is open in several directions, including to the east and northeast.

The project also benefits from good infrastructure and lies 15 km from Peru's largest silver mine and 40 km from the country's second-largest zinc mine. It sits 200 km northeast of the capital city of Lima, outside of which is a zinc smelter.

After copper, aluminum and iron, zinc is the most commonly used metal by industry, mainly for galvanizing. It is also used in human health products and zinc-air batteries. Zinc oxide is also widely used in making many household products such as paints, rubber, cosmetics. The company believes additional zinc is needed to avoid future deficits.

It also says there is a prevailing view that a base metals supercycle is developing as the globe recovers from the pandemic with an emphasis on green energy and policy focus on social need.

How is it doing:

Positive drill results have been the order of the day from Tinka so far in 2021.

On April 14, the company reported assay results from its recently-completed 7,600 metre (m) 2020-2021 drill program at the Ayawilca project, which included 12m grading 3.1% tin from a depth of 262.0m.    

Tinka also said it discovered a new zone of high-grade tin mineralization at South Ayawilca, immediately adjacent to the highest grade zinc resource, as what it called “significant” tin mineralization was intercepted in several of the drill holes.

The company noted that this is the first time tin mineralization of such high grade has been discovered at South Ayawilca. It added that tin mineralization was intersected in eight adjacent drill holes, including seven of the recent holes, in zones that typically contain very minor or no zinc mineralization. 

The tin mineralization is believed to be hosted by multiple, flat-dipping lenses with each lens up to 12m in thickness and with horizontal dimensions of about 200m, remaining open to the north. 

With the drill results now fully reported, Tinka said it is advancing Ayawilca towards a resource update and an updated Preliminary Economic Assessment by early 3Q 2021.

On March 17, Tinka had reported yet more high-grade zinc and silver drill assays which came from six diamond drill holes - four were sunk at the Camp area, while two were drilled at the South area.

Meanwhile, in January, the company reported one of the best grade intersections so far from the asset at the Camp area. The assays came from seven holes in a 7,500m resource drilling program and included 1.9m at 24.9% zinc, 7.7% lead and 604 grams per ton (g/t) silver from a depth of 101.1m and 7.8m at 31.3% zinc, 1.7% lead and 225 g/t silver from 112.5m depth.

The company noted that the shallow nature of this mineralization (about 100m depth) opened up the possibility for high-grade zinc-silver-lead resources much closer to surface than previously thought.

Away from drilling, Tinka got a boost on March 128 this year from news that Nexa Resources S.A., one of the largest zinc producers worldwide, had acquired 29,895,754 common shares in the company and to become a new shareholder of Tinka holding approximately 8.8% of the issued and outstanding common shares.

The company noted that the shares were acquired by Nexa from an arm's length shareholder in a private transaction at a price of C$0.26 per share, a 13.0% premium to Tinka's closing share price on the Toronto Venture Exchange on March 16, 2021.

Inflection points:

  • More drill assays from Peru
  • Updated resource estimate
  • Publication of a preliminary economic assessment

What the boss says:

In the April 14 statement, Tinka Resources CEO Dr Graham Carman said: “The new discovery of tin at South Ayawilca is potentially very important as a complement to the zinc deposit, as it is the first time we have encountered such high grades of tin immediately adjacent to one of the best zones of zinc at the property, an area which would likely be prioritized in the early years of a future mining operation."

“This new style of tin mineralization appears to be different to that observed previously in the deeper part of the Tin Zone at Central Ayawilca - the new style contains what appears to be ‘clots' of coarse-grained cassiterite mineral grains,” Dr Carman added.

Contact the author at jon.hopkins@proactiveinvestors.com

Novo Resources sees substantial upside potential at Nunyerry

Novo Resources Corp (TSX:NVO, OTCQX:NSRPF, ASX:NVO) co-chair and acting CEO Mike Spreadborough joins Jonathan Jackson in the Proactive studio to discuss promising gold outcomes from recent reanalysis of drill intercepts in a 2023 program at Nunyerry North in Western Australia. Using advanced...

11 hours, 32 minutes ago