Sometimes, all that’s necessary for a company to break through and reach the next level of success is a new perspective. That’s exactly what Vancouver-based Zincore Metals gained in 2009 when its new management team took over. Manager of Investor Relations Adam Ho says the company has a new outlook on life, from big-picture optimism all the way down to how it approaches its assets in the field.
“[The new management] brought us to a new strategy, a new way of looking at the assets and how the company moves forward,” Ho says.
Zincore Metals was spun off from Southwestern Resources into its own company in 2006. Ho says Southwestern wanted to concentrate on precious metals and remove its zinc assets. After a brief period of dormancy brought about by Southwestern’s issues with a project in China and a weak zinc market, Zincore Metals returned in 2009 with a new management team led by President and CEO Jorge Benavides. Ho says Benavides, a 30-year veteran of the mining industry, is the architect of the company’s new strategy and the driving force behind the company’s future.
At the core of the company’s new strategy was a renewed focus on its assets in Peru as well as careful diversification into other mining-friendly, zinc-endowed countries, namely Mexico and Canada. Zincore Metals has two developments in the Accha Zinc Oxide District in southern Peru – the Accha deposit and the Yanque deposit. Before 2009, Ho explains, the company had a less concentrated profile. “Previously, the company had assets in a number of different countries, and the new team didn’t feel these were the best places for us,” he says.
“One of the real big changes in the new strategy is the approach to the Accha zinc oxide district,” Ho says.
Under the previous administration, Zincore Metals brought the Accha deposit in the 50,000-hectare district to a pre-feasibility study, but the metallurgical process it used did not work with the ores from the Yanque deposit. In addition to the Accha location, the company continues work on the Yanque location and has its sights on nine other targets within the district.
“The way we view this district now is it’s a complete district strategy,” Ho says.
Previously, the company’s management envisioned a metallurgical process that could process only the ores from the Accha deposit, but not those from Yanque. The company’s new outlook provides for a different plan. “Our strategy is to have a single processing facility that can process the ores from all the deposits,” Ho says.
To accomplish this, Ho explains that the company plans to use a rotary reduction roaster, called the Waelz kiln, a process that is non-selective. This will make it possible for the company to achieve good recoveries on ores from both locations while still producing an excellent product.
The company also plans to take full advantage of the fact that the Accha District is a zinc oxide resource. Most of the world’s zinc is refined from zinc sulfide, which requires an expensive smelting process that most zinc companies farm out to others. With zinc oxide, Zincore Metals can build the electrowinning portion of the refining process and produce a final product of zinc metal for sale to end-users.
The biggest challenge for Zincore Metals coming into its new approach to the Accha district was that although it had technical reports on both the Accha and Yanque deposits, there wasn’t a lot of information about mining either of them in an economic manner. So, the company has undertaken a program of in-fill drilling to remodel the resources. Ho says the company now is now confident that much of the higher-grade mineralization at the Accha deposit is in a coherent body that can be selectively mined. The company is currently conducting a similar program for the Yanque deposit.
Testing its metallurgical process was another hurdle Zincore Metals had to clear before feeling confident about its assets. However, Ho says the company tested the process last year and got “fantastic” results in converting metal into concentrate. Zincore Metals is now in the process of optimizing that process through more testing, he adds.
“Those two things take us a long way towards a new pre-feasibility report, which we are hoping to have finished before the end of the year,” Ho says.
All of this gives Zincore Metals confidence that it will be able to begin production in the Accha district within the next few years. “Our feeling at this point is depending on what happens, we would be looking at the prospect of a feasibility study completed within 2012,” Ho says.