The zinc market is currently experiencing a sharp increase in demand and conversely, dwindling supplies as a shortage of large projects continue to create an amiable environment for zinc miners.
Zinc of Ireland (ASX: ZMI) is stepping up its resource exploration by deploying two diamond drilling rigs at its flagship Kildare project in Ireland, where the junior hopes to expand its current inferred resource of 5.2 million tonnes grading at 8.6% zinc and lead.
At the current time, Ireland is the world’s richest zinc real estate in tonnes of zinc per kilometre and is the home of several large high-grade zinc mines including Navan, Lisheen, Galmoy and Tynagh.
As zinc supply continues to fall worldwide, Zinc of Ireland has said it intends to capitalise by seeking to establish a significant zinc resource at Kildare – and expand upon it with explorative drilling.
Spinning the drill in Ireland
Zinc of Ireland is targeting new ore positions and extensions to its existing resource and plans to conduct around d 7,500 metres of drilling that is expected to last between four to five months.
The emergent zinc producer has aspirations to grow its resource base and identify new ore positions within an area known as the “Allenwood Graben”, centred around Kildare’s principal McGregor resource. Zinc of Ireland says it is currently in a “strong cash position” with around A$4 million on hand to complete “this and further” stages of drilling.
The rationale for the boost in exploration activity is largely based on zinc’s recent performance on world markets.
Since June last year, zinc prices have risen from around US$2,500 per tonne to as high as US$3,500 per tonne in February this year and are currently trading at US$3,219 per tonne for spot delivery, according to the London Metals Exchange (LME).
According to market analysts, up-trending zinc prices are being helped not only by growing demand for the metal on the back of energy-storage, battery and traditional industrial applications but also because zinc stockpiles at the LME are reported to be at 12-year lows and nursing 500,000-tonne deficit from last year. This has been largely put down to the limited amount of new zinc projects being developed and brought online.
“We embark on a drilling campaign designed to evaluate the prospects of Kildare hosting a mining proposition. The zinc price is strong, and likely to remain so for many years, making deposits such as McGregor increasingly attractive,” said Mr Peter van der Borgh, managing director of Zinc of Ireland.
Mr van der Borgh added that “a lot was learned about Waulsortian Reef hosted deposits from Lisheen and the nearby Galmoy mine since things wound down at Kildare, so we benefit from that knowledge, a good amount of historical data, and a couple of years of our own activity on the project, all of which has helped to finesse our exploration model”.
According to Zinc of Ireland, its first rig has already commenced drilling at its Allenwood East prospect with hopes of detecting a “McGregor lookalike”.
Its second rig has commenced drilling approximately 250m north of the main zone of mineralisation at McGregor, in a bid to see the deposit “considerably extended”.
The two drill rigs announced today are expected to serve as only the first salvo of the explorer’s assault on the Kildare project over the next 6 months, testing a range of targets including new ore positions including several holes to test extensions to its current resource.