Red River unveils maiden zinc reserve for Thalanga Far West deposit

Red River Resources (ASX: RVR) has unveiled its first reserve for its Far West deposit at its Thalanga zinc operation in central Queensland.
The maiden reserve of 1.5 million tonnes (mt) grading 12% zinc equivalent is predicted to boost the operational life at Thalanga.
When broken down further, the 1.5mt reserve comprises 1.3% copper, 1.6% lead, 5% zinc, 0.2 grams per tonne (g/t) gold and 45g/t silver, which, when combined equates the 12% zinc equivalent.
The mine design has been completed and early development and permitting have begun at Far West with first ore expected in the second half of 2018.
“This result gives greater certainty regarding the future operational life of our Thalanga operations,” Red River managing director Mel Palancian said.
“It represents the first stage in increasing utilisation of the Thalanga mill and extending the overall operational life of Thalanga,” Mr Palancian added.
As part of the reserve increase, the resource estimate for Far West was updated to 1.7 million tonnes grading 15.5% zinc equivalent.
Far West is the second deposit to be mined at Thalanga with commissioning starting at West 4, located less than 1km away, earlier this year.
According to Mr Palancian, Far West mineralisation remains open at depth which provides potential for extending the mine life even further.
Once operational, Far West ore will be processed through the company’s mill, which has 650,000 tonne per annum capacity and is currently running at less than half that with the West 45 ore.
Red River has offtake agreements in place for its copper, lead and zinc concentrates with copper sold to Glencore and lead and zinc sold to Trafigura. Concentrate produced from Far West will be sold under these agreements.
Zinc market fundamentals
In mid-October, Small Caps reported on the zinc market’s current situation which has seen the commodity slip into a supply deficit.
At its October meeting, the International Lead and Zinc Study Group published data revealing refined zinc had a 287,000t shortfall in the first eight months of 2017.
Additionally, major zinc miner Teck Resources claims zinc production will not be able to keep up with demand for at least the next two years. The miner also cautioned the current pipeline of zinc projects would not be able to meet forecast consumption requirements by 2025.
Due to tight supply, the cash zinc price on the London Metals Exchange has soared more than 30% to US$3,197.50 per tonne on the 20 November 2017, compared to its US$2,434 per tonne low in mid-June.