Zinc Investing News

By Daniella D’Alimonte - Exclusive to ZincInvestingNews.com

The price of zinc is continuing on its nearly 12 month downward slide. It is now sitting at around US$0.75 per pound; US$0.07 below its price at the beginning of August.

“It’s a difficult time right now,” said Chris Reeves, operations assistant for Canadian Zinc Corporation (TSX: CZN). “The operation costs for all producers have been going up quite a bit. We’re still in the process of just going into production so we haven’t had to deal with the heavy cost increases that a lot of other people have had to deal with.”

“In the industry right now, its so competitive,” he said. “You’ve got companies from Australia setting up shop in Canada because there is such an extreme shortage of workers over there.”

The Western Australia Small Business Development Corporation has begun a campaign to lure workers from New Zealand into Western Australia to fill the 27,000 job shortage. Employment opportunities on the skilled occupations list, especially in the mining industry, are readily available with much higher than average wages.

The State Government is also running a “Go West Now” website to promote worker migration.

However, some Australian zinc exploration and mining company are still feeling the sting from the plummeting price of zinc.

In the last two months, CBH Resources has cut its work force by two thirds in order to cut costs. It also plans to slow production at its Endeavor mine, putting focus on areas with a higher grade of zinc mineralization.

“What we’ve tried to do is stem the bleeding and put ourselves in a position where we can break even,” said Stephen Dennis, CBH managing director in an interview with The Australian.

In addition to the reduction from 600 to 233 workers, CBH will also lower ore output from the original target of 1.3 million tonnes down to 940,000 tonnes.

After rising 8.7 per cent August 8, CBH is back down 8 per cent or US$0.01 to US$0.115 per share.

Vancouver-based Grande Portage Resources Ltd. (TSX: GPG) has announced the beginning of its drill program at the Pass property near Smithers, B.C. The company plans to drill about 40-50 holes as a follow up to promising samples that were taken last year. Six of the samples taken showed over 20g/t gold while six samples also reported over 100g/t silver. Samples also showed 20.14 per cent zinc, 29 per cent lead and 11.13 per cent copper, according to a Grande Portage press release.

Lundin Mining Corp (TSX: LUN) warns that its Aljustrel zinc may have to be shut down as it can not continue with the current prices. After recently taking a charge of US$164.6 million on the mine and a forecast reduction of over 20,000 tonnes in Q2, the situation for this production-phase mine is looking bleak.

First Metals Inc. has released Q2 results with earnings of $3,515,579, or US$0.08 per share. Although it is a copper company, First Metals is currently working on the advancement of a second project with deposits of zinc, copper, gold and silver. Entitled the Magusi, the project is close to its Fabie Mine in Quebec.