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Zinc One Resources steadfastly heading towards first resource at Bongara project, where Mina Chica discovery has excited

A highlight of this year's drill program was the Mina Chica deposit discovery at Bongara
Pictured is surface sampling at the Bongara project
Surface sampling at the Bongara project

Zinc One Resources Inc (CVE:Z) says a first mineral resource estimate for the flagship Bongara mine project is now earmarked for early 2019 - marking a key moment for the company in Peru.

All data from its 2018 drilling has now been compiled, the company said, and the document will include the near-surface, high-grade, zinc-oxide mineralization encountered at the Mina Grande, Mina Chica, and Bongarita deposits.

READ: Zinc One Resources set for resource estimate for Bongara zinc project in Peru

A highlight of this year's drill program was the Mina Chica deposit discovery, the resource group noted, adding it hoped this would make an "important contribution" to the overall resource figure.

The most significant intercepts from Mina Chica have included 19.8m (meters) at 46.8% zinc from 1.9m depth, and 49.5m at 38.7% zinc from 7.3m.

The new resource report will be issued under the eye of recently appointed interim CEO Dr Bill Williams, an experienced geologist, who was previously the chief operating officer and a director of the Vancouver-headquartered group.

"... Zinc One is well-positioned to pursue project funding under Dr Williams' guidance," said Greg Crowe, director of Zinc One in October.

So what is the Bongara project?

Zinc One got its hands on the asset when it bought Forrester Metals last year in a one-for-5.5 all-share acquisition.

The mine was discovered in 1974 and various companies have completed exploration programs across the area. Zinc One has access to most of the data and technical work that date back to the 1990s, and was included in the technical report issued in 2016.

The Bongara zinc mine and the associated Charlotte Bongara zinc project are home to zinc oxide mineralisation occurring over a 2.5 km trend, and much of the area has been subject to sampling from pits and trenches, as well as by shallow drilling.

Previous exploration has resulted in a resource of up to 1.2 mln tonnes of oxides grading around 21% zinc, although this is not a number that is compliant with modern NI-43-101 legislation.

Bongara was previously a mine in production (between 2007 and 2008) exploiting high grades at surface (150,000 tonnes mined at over 20%) but was shut down due to the zinc price decline and the global financial meltdown.

The historical measured and indicated resource is around 1.007mln tonnes at 21.61% zinc.

Production via open pit is targeted for 2021 and permitting is on track. 

Peru a leader in the mining sector

The South American country, with a growing economy, is the third largest in terms of its zinc reserves and is the second largest producer of the metal on the planet.

Zinc production dates back to the pre-Colonial era and La Oroya, Peru’s first modern zinc refinery, started operations in 1922.

In 2017, Peru produced 1.47 million tonnes of the stuff, up 10.2% from 1.3 million tonnes of the metal in 2016.

It is a mining friendly country with legal and tax regimes designed to support the industry.

Company leveraging the zinc market

Industrial metals are doing well at the moment, buoyed by the apparent cooling of the US-China trade war. 

Base metal prices fell by 23.43% in 2015, but in 2016 they rose 26.77%. In 2017, the sector of nonferrous industrial metals was the best-performing commodities sector posting a 21.99% for the year.

So the zinc price has been somewhat volatile but the World Bank has predicted a more stable picture by 2030, when prices are expected to hover around US$1.09 per pound, giving zinc a strong economic forecast and boosting confidence for juniors like Zinc One.

On Friday (November 30) LME zinc over the three-month price soared to US$113 a tonne - the highest since 1997.

The share price

Zinc One shares in Toronto are up 10.53% at $0.105 on Tuesday  - up around 10% on the last month - but down from the $0.15 seen around three months ago.

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