Metalicity (ASX: MCT) has nabbed itself another project to add to its zinc portfolio, after completing the acquisition of its Napier Range project in Western Australia.
Napier Range hosts the Wagon Pass deposit which has an inferred resource of 750,000 tonnes grading 13.6% zinc equivalent.
According to Metalicity, nine targets along 4km of strike have been identified for further exploration.
“Securing the Napier Range zinc project is a significant step forward for Metalicity’s zinc strategy by providing a potential high grade, low capital, near-term zinc development project the complements the pathway for our 100%-owned Admiral Bay zinc project,” Metalicity managing director Matt Gauci said.
Mr Gauci added the company had looked into financial modelling for Napier Range as well as conducting preliminary field work.
Under the acquisition terms for Napier Range, the vendors Teck and Glencore retain an option to earn 51% in the Wagon Pass deposit if a new JORC-compliant resource is discovered by completing and sole funding a feasibility study or spending A$20 million on assessing the current inferred resource.
Metalicity plans to kick off exploration at Napier Range during the current quarter once the wet season in WA’s north has subsided.
The company anticipates the ore at Napier Range will be suited to conventional processing, recovering high amounts of zinc and producing a quality concentrate.
Metalicity is progressing its flagship Admiral Bay project which has an inferred resource of 170mt grading 4.1% zinc, 2.7% lead and 25 grams per tonne silver.
Earlier this month, China Non-Ferrous Metals finished reviewing a pre-feasibility study for Admiral Bay, with its own engineering, procurement and construction costings to be incorporated into the study.
Analyst Beer & Co has estimated Admiral Bay has a net present value of A$1.2 billion, based on long range zinc prices under the current zinc price.
Zinc price continues rising
The zinc price has been steadily rising the past six months due to current supply shortages. On 25 January, the zinc price was trading above US$3,500 per tonne, up more than 25% from around US$2,750/t in July last year.
Shares in Metalicity lifted 2.22% in early morning trade to hit A$0.046.