As Zinc Investing News reported last month, the broad consensus among zinc market participants seems to be that prices for the base metal will remain relatively flat for the remainder of 2013.
That was certainly the case in November. Spot zinc began the month selling at $0.87 per pound, and its lowest price since then has been $0.84 per pound.
While such a tight range might seem surprising, it is not unprecedented — though zinc managed to rise to nearly a dollar per pound back in February, since then it has traded in much the same range as it did in November.
Heading into 2014, it will be interesting to see whether zinc prices stay where they are or make serious gains, as some bullish analysts anticipate.
Midway through November, news surfaced that Nyrstar (EBR:NYR) had offered short-term support to Finnish nickel miner Talvivaara Mining Company (LSE:TALV), which on November 15 filed for a corporate reorganization in order to raise money and avoid going bankrupt. Nystar also said that it would not “breach financing agreements in the event of an impairment,” as per Bloomberg.
The two companies have an offtake agreement under which Nyrstar is to pay $335 million for all of Talvivaara’s zinc concentrate until it receives 1.25 million metric tons.
Now, however, the tide has turned. Reuters reported last week that Talvivaara had come forward to say that Nyrstar has withdrawn its support for the corporate restructuring.
Commenting on the development, Antti Viljakainen of Inderes Equity Research told the news outlet, “[i]t was surprising that Nyrstar withdrew. Until now they have been one of Talvivaara’s most patient supporters.” Viljakainen assumes that Talvivaara will now need to approach other creditors for recommendations.
Nyrstar was not available for comment.
Junior company news
On November 18, Nevsun Resources (TSX:NSU,NYSEMKT:NSU) provided diamond drill results from the eight-hole, 2,713-meter infill resource definition drilling program completed this year at its Hambok copper-zinc massive sulfide deposit. Highlights include hole HAM-13-103, which includes 20.1 meters at 1.68-percent copper and 2.61-percent zinc from 225.9 to 246 meters; it “extends thicker massive sulphide mineralization a further 50 m to the north,” according to the company.
The next day, Canada Zinc Metals (TSX:CZX) provided an update on an option agreement that it entered with Teck Resources (TSX:TCK.B,NYSE:TCK) back in September. Under that agreement, Teck will spend as much as $8.5 million to acquire up to a 70-percent interest in the Pie, Cirque East and Yuen properties.
Canada Zinc said at the time that Teck had the right to assign its rights to a 50/50 joint venture between itself and Korea Zinc (KRX:010130).
Now, Korea Zinc has decided to include the agreement under that joint venture, meaning that “Teck and Korea Zinc will hold any interest which may be acquired under the Agreement pursuant to the [Teck-Korea Zinc joint venture].”
Later that week, Zazu Metals (TSX:ZAZ) initiated a NI 43-101 compliant preliminary economic assessment (PEA) on its zinc-lead-silver Lik deposit, located in Alaska. It hopes to complete the PEA by the first quarter of 2014.
On November 25, Trevali Mining (TSX:TV,OTCQX:TREVF) gave an update on activities at its Halfmile and Stratmat deposits, located in New Brunswick, Canada’s Bathurst Mining Camp, commenting that in the short term, one of its goals is to restart the Caribou mine project by reactivating “the 3,000 tonne-per-day Caribou Mill Complex and the associated underground deposit.”
A few days later, the company closed a previously announced bought-deal offering made up of 55,430,000 common shares at a price of $0.83 per share. In total, it raised just over $46 million; the money will go towards the Caribou restart.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.