With zinc in near-top form, Todd River Resources has two favourites in the race
22nd March 2019
Resources Rising Stars
The zinc price has been one of the surprise packages in the year to date. By now, most forecasters had the galvanising metal coming off its 2018 highs to be trading at $US1-$US1.10/lb (reports Stockhead).
But zinc has had other ideas. It was last quoted at a near 8-month high of $US1.29/lb, making it the second best performed metal of the year to date behind nickel.
The metal’s price strength is a response to stocks on the London Metal Exchange falling to the lowest levels since October 2007.
Demand also continues to outpace supply, with the International Lead and Zinc Group estimating a 28,000t supply deficit in January.
The North Queensland floods in February tightened things a bit further when producers in the region had trouble getting their output to export ports.
It’s why the same leading metal forecasters that had zinc back at $1.10/lb by now are now happy to put their names to $US1.35/lb price predictions for later this year.
Add in the revenue boosting benefits of the lower US exchange rate, and it is a case of happy days for producers of the metal.
Zinc’s year to date performance is also fuelling a healthy interest in explorers for the metal, a situation reflected in the number of capital raisings by explorers in recent times in an otherwise tough market for risk capital.
Copper prices have also been working their way back to $US3/lb after getting as low as $2.56/lb early in the new year, with the thematic that supplies could struggle to keep pace with demand growth in company years overcoming US-China trade war fears and a China slowdown.
Put zinc’s 17% price rise for the year to date together with copper’s handy 14% price recovery in the same period, and an exploration project involving both is bound to come to the attention of investors.
One explorer in that “polymetallic’’ category is Northern Territory base metals specialist Todd River Resources (ASX:TRT). It has been trading at 8c for a market value of $11.5 million.
After an entitlement issue and a strategic share placement to ASX-listed S2R Resources (ASX:S2R) late last year, Todd River entered the new year as one of the better funded junior explorers, with cash at the end of December $4.68 million.
The placement to the technically savvy S2R gave it a 19.9% stake in Todd River.
Apart from the stronger market for zinc and copper, it was Todd River’s breakthrough discovery last year at its 100% owned Mt Hardy copper-zinc project, 300km north-west of Alice Springs, that underpinned the support for its equity raisings.
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