Categories: Base Metals / General Market Commentary
Topics: General Base Metals / General Market Commentary

Zinc Discovery in Arizona looks like “Bre-X”

Zinc Discovery in Arizona looks like “Bre-X”

With zinc prices rocketing, investors are piling into new zinc stocks and Arizona Mining is top of the list. Arizona's shares are flying, up over 1,000 per cent this year, as the company has drilled out its Taylor discovery in the US, eight miles from the Mexican border.

Taylor has pumped out stellar drill results with eye-popping zinc grades, as high as 23 per cent. In September, it reported its “best hole to date”, drilling 105 feet at 14 per cent zinc and 10 per cent lead. “The Taylor deposit could be one of the best growth stories in base metals,” CEO Jim Gowans announced in February.

As drill results have come out of the ground, cash has piled into the company. Arizona raised $16m in March, closing an $18m private placement in May and a $36m bought deal earlier this month. The company's market cap has mushroomed to C$826m ($627m), as the shares have risen from 30 cents to C$3.31 in twelve months.

It is a “globally significant deposit”, says investment bank RBC, and 14 drill rigs are “still turning” on the property. “Isn't 103 million tonnes enough ore? Yes, but we believe it makes sense to understand the geology of the whole land package, particularly if there was a takeover”.

“Incredible”
Some analysts think they have a good enough handle on the geology already: even if Taylor's product comes out of the ground, manganese impurities in the deposit mean smelters may simply refuse to process the metal.

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