Looks Like Zinc’s Back on the Menu
May 2019
In June 2017, Canadian Vancouver-based Zinc One Resources Inc. acquired both the Bongara Mine and the Charlotte-Bongara projects in north-central Peru. Both projects hold considerable potential, with Zinc One expecting that the currently-closed mine and surrounding property could hold some of the highest-grade zinc deposits in the world.

The Bongara zinc mine was in operation between 2007 and 2008. Ore was mined using an open-pit method at an average rate of 358 tonnes per day for a total of approximately 25kt of zinc-in-concentrate for the year. Ore was shipped 540 kilometres to the west coast where it was processed through a Waelz kiln, a processing technology typically applied to flue dust from steel mills to recover zinc and other low boiling point metals. Operations were short-lived, however, and after producing just 25Mkg of zinc, the mine had to be shut down in 2008 due to a sharp decline in zinc prices which made the operation uneconomical; just one of many mines closed during the year’s financial crisis.

And so, the Bongara mine sat unused, held by then-owner Forrester Metals. In 2016, Zinc One formed, and set about finding appropriate zinc projects to acquire. It closed the purchase of Bongara and the adjacent—and separately-owned—Charlotte-Bongara project in 2017 and begun exploration and development.



Zinc One’s exploration drilling programs at Charlotte-Bongara project has returned significant finds. The exploration program returned very optimistic drilling results with 29.5% Zn across 15.5 meters, 26.1% Zn across 12.5 meters, 29.7% Zn across 11.5 meters, all of which were encountered within seven metres of the surface.  This squares well with historical drilling that defined a 2008 deposit of 1Mt at 21.6% zinc—far higher grade than other high-grade zinc deposits.

The Bongara Zinc Mine technical report was released in March of this year: the exploration results consist of an indicated mineral resource of 822kt at 18.9% zinc (155mn kg of zinc) and an inferred mineral resource of 1.34Mt at 16.8% zinc (225mn kg of zinc) at 10% zinc cut-off. The currently-defined deposits are also very near surface, with outcrop sampling assaying some regions as high as 40% zinc. As such, future development on-site is expected to be open pit.





At this stage, the company has not undertaken studies for capital and operating costs to develop a mine on the Bongara concession. Similarly, no current economic viability studies have been carried out for the Bongara project.  In the near future, the company should complete a preliminary economic assessment to determine the tonnage threshold needed for an economically viable operation and create a financial model.

While development has historically been centred around the Bongara mine, significant undeveloped resources are expected in the adjacent Charlotte-Bongara concession. As the first company to hold these two adjacent projects together, Zinc One has not only claimed a potentially high-grade and low-capex production-ready site but has also landed a relatively rare opportunity for additional exploration and expansion.

With demand expected to remain strong and a market currently in deficit, Zinc One definitely feels confident in its ability to develop their holdings. With potentially slower-than-expected demand growth and a market that will likely enter a surplus by the end of 2019, however, Zinc One may find its medium- to long-term prospects a little less certain than it would like.