Zinc is a versatile metal, with key applications extending from the manufacturing of construction materials, anti-corrosion coating on metals, to cosmetics and even medicine. Additionally, Zinc is a key component in one time use batteries (currently), with Zinc-Air batteries used in hearing aids, while Silver-Zinc is used for alkaline batteries and military purposes.
However, not only does Zinc play a large industrial role, it is also an important nutrient for humans, animals and plants. This means that a zinc deficiency is may lead to many major issues within the human body. According to Investing News, yearly production of zinc reaches approximately 14 million tons in order to keep up with consumer demand.
Zinc rallied well last year, gaining an astounding 65.7% return, making its performance second only to iron ore. This growth has been attributed to the shutdown of major zinc mines, leading to an overall decrease in zinc reserves.
From data reported by Mining.com, the positive trend continued into 2017 as Zinc began on a high note with an increase of 12.5%. This price increase again has been attributed to the rising demand of zinc, but the ever shrinking supply. Despite Goldman Sachs’s forecasts of an 114,000 ton shortage this year (2017), demand is anticipated to increase by 2.1%.
With diverging trends in Zinc’s supply and demand, increasing prices are justified, making zinc related investments potential attractive investments for portfolios. For those looking into the energy and natural resource sectors, this may be a good time to look at some prominent zinc industry players.
Leading the highly-monitored Sully Project in Kimberley, British Columbia, The Kootenay Zinc Corporation (CSE:$ZNK.CN; OTCQB:$KTNNF) is a company that has definitely been on investor radars.
The Legendary Sullivan Mines had enormous deposits of silver, zinc and lead, and was considered one of the largest in the world, with production values estimated up to $20 billion. However, due to geological similarities, along with mirrored gravity anomalies found between the two mines, industry experts believe that the Sully Project can not only replicate, but outperform the production of the Sullivan Mines.
With operations in Peru and New Brunswick, Trevali Mining (TSE:$TV) is another Vancouver based company to watch for.
In 2016 alone, Trevali produced 98 million pounds of zinc, and according to Mining.com, has also secured two advanced staged development projects: Clear Lake and Pine Point. It might be good to note that Pine Point was considered the most profitable lead and zinc mine in all of Canada before shutting down in 1987 when their respective prices dropped.
Through its partnership with Sandvik Mining, the company has reportedly invested another $20 million into its Caribou Zinc mine in New Brunswick. The surge of funding is meant to upgrade dumping machines, drillers, and a variety of other heavy duty equipment. Additional to the introduction of new mining equipment, Trevali has also looked towards an owner-operated model upon reviewing the underground mining projects. With efficient productivity leading to strong fiscal performance, Trevali shows strong indicators of a favourable mining company.
Another company investors will want to pay attention to is Zinc One Resources (CVE:$Z)
With positive outlook on the price of zinc, Zinc One has acquired Forrester Acquisition through a private placement financing of $10,000,000. This marks a great opportunity for Zinc One as it now has the necessary resources to explore and develop the Bongara Mine projects, producing high-grade zinc-oxide.
In the words of former Zinc One CEO Jim Walchuck’s statement, “We believe that this transaction is a tremendous step in moving Zinc One towards becoming a zinc producer. Although there are other quality assets in Forrester, it is the high-grade zinc Bongara and Charlotte Bongara properties which will become the flagship project of Zinc One. This is an exciting opportunity for Zinc One and all its shareholders.”
Additional to new projects, Dr. Williams, who has been a director on the Zinc One board since May 24th of 2017 has been newly appointed Chief Executive Officer. The former Chief Executive Officer and president of Orvana Minerals Corp has also served as a consultant within the mining industry. With a PhD in Economic Geology, Zinc One will also benefit from the talent and experience that Dr. Williams has to offer.
With core explorations in zinc, lead, iron ore, aluminum, copper and petroleum, the final company investors are suggested to watch is London-Based Vedanta Resources (OTCMKTS:$VDNRF). Having purchased a massive zinc portfolio from Anglo American for just $1.34 million, the company stands to profit from the Skorpion Mine in Namibia, Lisheen mine in Ireland, as well as the Black Mountain mine and Gamsberg projects located in South Africa.
As zinc supply consistently come short of demand, investing in the mentioned companies could mean a sizable return in your portfolio.
Featured Image: twitter