Tuesday, November 1, 2016

Nevada Zinc - not all Zinc deposits are equal

My chum down south has been beating the drum recently about Tinka and their base metal project in Peru and showing us lots of lovely charts about how zinc prices have been shooting up. So, I took his advice and bought shares in Teck....

I can't see a difference.....
So I thought I would try and be clever and went looking for companies with zinc projects, and I stumbled on Nevada Zinc (link), they have been hitting some great zinc intercepts from their Lone Mountain project in Nevada.

I thought, at last I've found a decent project that no-one knows about, but a crap load of shares and wait for the retail investors to pile in and make me rich (ok, being realistic - slightly less poor).

I brought the drill-data into 3D (you can get the model from here).

look at those grades....

magnificent, thick, juicy zinc intercepts
Everything was looking good until I saw this in their presentation (slide 16) where it states: "Potential for sulfide mineralization at depth"

Crap, we have a zinc carbonate deposit. How many of those are operating around the world? I only know of one - the Skorpion Mine Namibia (link), that produces around 125Kt of zinc metal a year from a alluvial zinc deposit.

All other carbonate zinc deposits I know are hosted in limestone:
  • Accha and Yanque in Peru (Zincore Metals Inc (link))
  • Sierra Mojada in Mexico (Silver Bull Resources (link))
  • The tops of zinc deposits (e.g. Tsumeb, Broken Hill and the MVT deposits in the USA, UK and Ireland that were mined in the 18th century,
So they aren't common, but Skorpion is/was the 8th largest zinc mine in the world, that is good, no?

Skorpion is a bit different, most non-sulfide zinc mines are generally found in limestones, and you know what happens when you tip a load on acid on them, they fizz. Hypothetically you can leach the zinc minerals, but will have massive acid consumption.
Don't worry, Nevada zinc state that they can use dense media separation (DMS) to remove a lot of the waste and they they can leach the zinc, but that is the big issue, the real elephant in the room is the lead.

There is a bit of lead...
There isn't much, but lead carbonate, so what's the problem? Well lead carbonate is romantically called "white lead" and for the older readers it was used as a pigment in paint. Those of you who are or have renovated an old house, you know what a hemorrhoid it is to remove and dispose of the old paint.

This is what Wikipedia tells us:

It tended to cause lead poisoning, and its use has been banned in most countries...

So why is mining lead carbonate bad? Why don't we ask Magellen Metals what they think (link)?

Magellen (now called Rosslyn Hill Mining) operated the Wiluna Mine in Western Australia (link). A oxide lead-zinc deposit. Back in 2006 it was noticed that ~9000 birds died in the town of Esperance, that was discovered to be caused by lead poisoning. The source of the lead was the concentrate from the Wiluna mine that was using the port at Esperance to ship the concentrate overseas.

They also found that 10% (about 1400 people) have blood Pb levels above WHO levels. The concentrate contained lead carbonate which is absorbed much more easily that lead sulfide. The end result was that they had to pay AU$30M to clean up Esperance, and were very much under the microscope from the state government. the mine is currently closed.

So, Nevada Zinc have a carbonate zinc deposit in the USA, a country well know for being incredibly environmentally friendly. Imagine the fun you'll have with the EPA over:
  • Mining ore with lead carbonate - you gonna need good dust control
  • Transporting concentrate with lead carbonate in it
  • Having waste dumps on surface that may contain lead carbonate
    • they don't have any wind in Nevada?
I'm surprised they haven;t had a slap on the wrist for doing RC drilling, which looks like this...

Bit like a steam train, puffing all that dust over the desert. Imagine that dust contained something nasty.....

So in essence, not all zinc deposits are created equally, and if you see a company talking about their great oxide zinc depoist (e.g. Zincore, Silver Bull, Nevada Zinc), just ignore them and move on.


  1. Booo! TK is the zinc play of the future! (and always will be?)

  2. I like TK, maybe I'll pull apart the data someday...

  3. Naturally we have been following TK. Truthfully anything highly Zinciferious is new territory for this cowboy, so kudos again AG. Base metals can be a slippery slope for juniors sometimes. Zinc commodity chart has been doing well no?


  4. been looking into TK too. would love to hear your thought on TK. Btw, otto, your porter boy frank has been pumping gsv, brazil resources and now JDL gold mining at every breath.

  5. Hey Mr Angry. How is Arizona mining looking. They shifted gears to the Zn/Pb/Ag Taylor deposit in 2016. Big resource that will support 10k t/d project.

    1. I should have done my post a bit quicker. The deposit is big, but with issues. I'll ask an interesting question in my final post, which I'll put out on Friday

  6. Been watching AZ since MUCHO lower levels. That is some chart and tis nipping a 52 week high on high volume to boot. We'll be sticking baby up tomorrow.

  7. Been following your blog since I discovered it a few weeks ago, great stuff!

    A question if you don't mind AG: I own Silver Bull, but it seems your take is that it's a lousy deposit that will never be developed? :S

    1. Hello Erik, Silver Bull have been looking to sell the project for a number of years. My frustration with them is that they don't really do anything. A bit of drilling here and there and nothing else. I would rather invest in an company that is actively exploring than buy shares in a company that just sits on a resource (like Defiance Silver, Silver Bull, Golden Tag etc.).

    2. This comment has been removed by the author.

    3. Hi AG, great post, but I'm a bit confused by your reply. Are you saying that in the case Silver Bull were working/drilling (or assuming they actively start up at some point), their deposit does have merit or to just move on regardless due to the sulphide?

    4. Hello Olly,
      I get frustrated with companies like Silver Bull, Golden Tag, Defiance Silver etc. that essentially do nothing and just sit on an average/poor project.
      I would prefer to invest in a company that is looking to grow either through resource expansion or reviewing, acquiring and exploring new projects.

  8. Hey AG,
    Do you have any thoughts on Pure Gold? Many good drill intercepts, but is it adding up to an economic deposit?

  9. Great Admin....thanks for shearing information in this blog. Nice blog post..Bronze sand casting

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