Mr. Wayne Hubert reports
INZINC PROVIDES CORPORATE UPDATE
Inzinc Mining Ltd. has provided an update on its activities over the past several months, which have focused on strategies to advance its North American project portfolio while preserving working capital.
- Strategic discussions -- corporate and asset level -- no assurance of a positive outcome;
- New strategies forming to improve economics at West Desert project, Utah -- upside potential from resource expansion and improved resource classification -- higher confidence in potential indium revenue;
- Favourable amendments to option agreement at Indy project, British Columbia -- shallow, high grades discovered in 2018 open for expansion -- regional-scale exploration;
- Executive transition;
- Continued low administrative and project-carrying costs.
The company has received overtures from, and had discussions with, various parties regarding potential corporate- and asset-level transactions. COVID-19 has influenced timing of some of the related activities. There are no assurances that anything will result from these discussions.
West Desert, Utah (100 per cent)
The company has been evaluating new strategies to improve the economics and advance this infrastructure-rich project. West Desert is the largest known zinc resource in the lower 48 of the United States not currently owned by a major base metal producer. The project also contains the only known indium (defined as a critical mineral) resource in the U.S. Indium is a vital component of touchscreen technologies and is used in a variety of photovoltaic (solar) cell technologies.
West Desert is host to an expandable resource containing 691 million pounds zinc and 65 million pounds copper in indicated resources and 1,781 million pounds zinc and 224 million pounds copper in inferred resources. Important byproducts include indium, silver, gold and iron. A 2014 preliminary economic assessment returned positive economics, concluding that additional high-value (zinc and copper) resources would further enhance economics in the next stage of advancement. In 2018, a successful drill campaign discovered new shallow and high-grade (copper, zinc and indium) resource potential proximate to the existing resource. A preliminary estimate for a drill program to follow up these results is $1.4-million (U.S.).
The 2014 PEA also outlines the flexibility of the resource at West Desert, stating that an increase of up to 200 per cent in indicated resources could be achieved by excluding indium from the current resource given the lower frequency of sampling for indium relative to other metals. If indium was excluded, the project would still capture the revenues from the indium contained in concentrate sales and would benefit from a reduction in the drilling required to upgrade the resource for production.
Recent preliminary discussions with concentrate marketing specialists support the estimated revenue for indium contained in the 2014 PEA. Future concentrates from West Desert remain uncommitted.
Production studies balancing higher-value zinc-copper and iron resources may also offer improved efficiencies in revenue and enhanced project economics.
Indy project, B.C. (100 per cent option)
With a large claim position (25-kilometre strike), discoveries of shallow, high-grade mineralization and multiple untested targets exceeding five km in aggregate length, the Indy project provides multiple opportunities and scale for discoveries of a sedimentary-hosted exhalative (sedex) type deposit in an accessible and unexplored region of central B.C.
As previously announced on April 2, 2020, the company has an additional year to earn a 100-per-cent interest at Indy. As amended, the option agreement requires no property expenditures in 2020 and reduced expenditures in 2021. The aggregate property expenditures remain the same as those outlined in the original agreement. A preliminary estimate for a follow-up exploration program including airborne geophysics, additional soil sampling and drilling is $800,000.
Wayne Hubert, the company's chief executive officer, has advised that he will be stepping down as CEO due to new and existing commitments within the gold industry. To ensure a seamless transition, Mr. Hubert will continue as CEO for the next few months and will remain an active board member. The aforementioned strategic discussions may influence the timing and outcome of a CEO search process.
Low administrative and project carrying costs
Management has continued to keep administrative costs low while retaining the ability to respond to improving base metal markets as needed. Core property retention costs are comparatively low and supported by favourable tax incentives such as the METC in B.C.
About Inzinc Mining Ltd.
Inzinc is focused on growth in zinc through exploration and expansion of the advanced-stage West Desert project (100 per cent) in Utah and exploration of the early-stage Indy project (100 per cent option) in B.C. West Desert has a large underground resource open for expansion and has district-scale exploration potential. A West Desert preliminary economic assessment completed in 2014 forecasted 1.6 billion pounds of zinc production over 15 years. Byproducts would include copper, magnetite and indium, the latter being identified by the U.S. in 2017 as a critical mineral. West Desert is well located with easy access and existing infrastructure. The Indy sedex project comprises near-surface discoveries, large untested exploration targets and regional discovery potential. Indy is readily accessible by road from Prince George, the major hub for transportation and heavy industry in central B.C., and is located 85 km south of the Canadian National Railway.
We seek Safe Harbor.
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