Zinc is perhaps one of the most undervalued resources when it comes to investment opportunities — being bypassed for more favourable commodities such as precious metals including gold and silver — however, what investors might not realise is that the base metal was one of the best-performing commodities in 2020 and continues to rally well into 2021.
Case in point, the metal started the year at US$2,779.85 per tonne and has surged to $2,951.85 per tonne as of June 2021.
In addition to zinc’s surging price value, the commodity is also the fourth most commonly used metal in the world after iron, aluminum and copper. Although global production of zinc was down 6 per cent last year to 13.7 million metric tonnes, it is estimated that production will only rise to 1.53 million metric tons by 2027, or an increase of only 1.67% per year, potentially falling short of demand growth.
Some of zinc’s primary uses include: galvanizing steel and other alloys used in all kinds of fabrication and construction, die-casting in the automobile industry, pigment in paints and skin protection in sunscreen. New zinc-air flow battery technologies promise to store industrial size energy from wind and solar farms that cost a fraction of lithium-ion batteries in compact more efficient systems.
As zinc prices continue to rally over the coming years, there are companies in the exploration space that will be ramping up their efforts to meet the increasing demand.
One such company is Norden Crown Metals Corp. (TSXV:NOCR, OTCQB:NOCRD, Forum), a Canadian mineral exploration company focused on the discovery of silver, zinc, copper and gold deposits. Hosted in the Scandinavian countries of Norway and Sweden, Norden’s projects include: Gumsberg, with high-grade silver VMS targets and a “Broken Hill” type discovery, and Burfjord, an IOCG exploration project joint-ventured with Boliden AB (Sweden’s largest mining company).
Patricio Varas, executive chairman and CEO with Norden Crown Metals, told Stockhouse Editorial that Norden Crown Metals is an exploration company with Scandinavian projects that have been mined in the past but have not been thoroughly explored using modern exploration methods and technologies.
As an example, this strategy allowed the company to make a significant “Broken Hill” type discovery at the Frederiksson Mine (Gruva) target on their Gumsberg project that had not been mined since the 1970s.
The focus in Sweden
Sweden has a deep history when it comes to mining, dating back thousands of years. Present-day, mining in the country continues to advance thanks to technological mining advancements and low sovereign risk and a strong minerals profile.
Varas explained that Norden’s reasons for exploring in Sweden are because it is well known as a friendly mining jurisdiction with world class prospectivity and ample infrastructure to support exploration and exploitation. For example, Sweden has six ore smelters while there are just two in Canada.
Smelters are industrial installations that buy and process ores from mines and then separate the ore into its metal components, such as zinc, for sale and distribution to multiple industries and metal exchanges.
Varas added that Sweden has excellent road access, railways and water supply. The country also has the cheapest power in Europe thanks to the abundance of hydroelectric power.
All of the above, coupled with a stable political environment, the ability to work year-round and the streamlined process for getting permits make Sweden an excellent country in which to do business.
The Fredriksson Gruva Prospect
As it currently stands, Norden Crown Metals is primarily focusing its efforts on the Fredriksson Gruva prospect, located within the Gumsberg project.
At a broader scale, The Gumsberg project contains five exploration licenses in the Bergslagen Mining District in southern Sweden, which spans over 18,300 hectares where multiple zones of Volcanogenic Massive Sulfide-style (VMS) and “Broken Hill” type mineralization has been found.
VMS mineralization on the Gumsberg project has been mined as far back as the 13th century and all the way through to the early 1900’s with over 30 historic mines present on the property; including the Ostrasilverberg Mine, which was the largest silver mine in Europe between 1300 and 1590.
Although the region has an extensive production history, little modern exploration has taken place on the project.
Varas said the company believes the Fredriksson Gruva is “a very interesting prospect” thanks in part to it being a “Broken-Hill” type deposit. “Broken-Hill” type deposits represent many of the most profitable ore deposits in the world.
As Varas explains, “Broken-Hill” type deposits are rare and were first discovered in Australia at Broken Hill, New South Wales. The original Broken Hill deposit contained the largest accumulation of lead, zinc and silver on earth.
The company has already drilled three holes into the Fredriksson Gruva Prospect, hitting mineralization in every hole averaging 11 metres in thickness with the thickest intercept at 13.6 metres in thickness.
In a press release from March discussing the results, the discovery holes intersected significant mineralized widths ranging from 8.15 to 13.60 metres of precious and base metals, massive and semi-massive sulphide mineralization. Additionally, a geological setting unique to mineralization belonging to the Broken Hill Type clan of silver-rich zinc-lead-ore deposits.
The company’s drilling program, which totaled 569 metres, was part of an 11-hole 2,365.6 metre diamond drill program, which had the objective of demonstrating that mineralization continues beneath historical mine workings that extended to 91 metres below surface.
The program was to also confirm historical silver-zinc-lead grades and thicknesses and testing the continuity of this mineralization. Of note, an important aspect of the mineralization is that the massive-to-semi-massive sulphide intervals are developed with a broader sequence of highly magnetic iron and manganese-rich chemical sediments. As such, the distinctive and thick sequence of chemical sedimentary rocks will lay the foundation for an important marker horizon to be used to track the mineralization along strike and depth.
“This belt of mineralization extends on our property for at least 25 kilometres, and we’re very excited about it,” Varas said, adding that the Fredriksson property has now shifted to the company’s main project focus.
Moving forward, the company anticipates future diamond drilling at Fredriksson Gruva will continue testing the continuity of Broken Hill Type style massive sulphide mineralization following the marker iron formations below the historical mine workings. This is where ongoing 3D geological modeling indicates that silver-zinc-lead mineralization extends to at least 290 metres in depth.
What’s next for Norden Crown Metals
Varas told Stockhouse Editorial that Norden will be busy this summer and fall with the Fredriksson Gruva target and also at the Burfjord project in Norway, its joint venture with Boliden Mineral AB. Varas said Boliden has the potential to earn up to a 51 per cent interest in the property by spending US$6 million on exploration and development of the project over the next four years.
Boliden also has the potential to earn an additional 29 per cent interest in the Burfjord Project by solely funding additional advancement work through completing an NI 43-101 and PERC compliant feasibility study.
Varas told Stockhouse Editorial that Norden Crown Metals will be completing airborne and ground geophysics as well as mapping and sampling at Burfjord before beginning 3,000 to 5,000 metres of drilling.
In addition to summer drilling at Burfjord, the company wants to get a better understanding of the geology of the Fredriksson Gruva area and has crews presently in the field mapping and sampling. At the same time an airborne drone magnetic survey will also be done at the Fredriksson property.
“Once we have that data, then [the company] can do some modeling and make sure that the next drill holes will give us an idea of what we’re chasing,” Varas said, adding that in the mid-term the goal is to build up tonnage.
The Management Team
As the company moves ahead with exploration of its Fredriksson target and Burfjord project, investors in Norden Crown Metals should know that its management team is backed with experience that knows how to get the job done.
J. Patricio Varas, executive chairman and CEO
Mr. Varas has over 30 years of experience as a professional geologist working in exploration, project development and corporate management. He has worked at operating mines, exploration projects — from concept inception to discovery — feasibility studies of world-class deposits and mine development.
In addition, Varas also founded and led Western Potash Corp., as its president and CEO, where the company discovered and developed the world-class Milestone Potash deposit in Saskatchewan.
Varas was also instrumental in discovering the Santo Domingo Sur, deposit in Chile with Far West Mining and was integral in discovering the Diavik Diamond mine as a project manager at Kennecot Canada.
Dan MacNeil, vice president of exploration
Dan MacNeil has over 16 years of experience as a precious and base metals specialist with continental-scale project generation to in-mine resource expansion experience in a wide range of geological settings across the Americas and Eastern Europe. His expertise includes exploration strategy, target and opportunity identification, district entry strategy, business development, strategic evaluation of geological terranes and execution of target testing.
David Thornley-Hall, Vice president of corporate development
David Thornley-Hall is a senior executive with over 25 years of experience in the mineral exploration, mining and finance industries. He previously spent eight years with Western Potash Corp. as executive vice president and corporate secretary. Additionally, Thornley-Hall was a leading member of the Commercial Team at Western Potash where he was responsible for securing over $110 million in strategic equity investments in two different transactions.
Jeannine Web, CFO
Jeannine Webb has over 25 years of experience in the mineral exploration sector having served as a chief financial officer, corporate secretary and director for private, junior and small-cap domestic and international public companies.
Webb has a range of experience and skills in financial management and regulatory reporting and serves as CFO and corporate secretary for private companies and various Canadian venture companies with operations in Canada, the US and South America.
The investment opportunity
At present, Norden Crown Metals sits with a market capitalization of C$10.87 million and has just over 53 million shares issued. The company’s share price is currently $0.21, representing a 13.89 per cent increase year-over-year.
Thanks to its diversified and experienced management team, strong portfolio of projects and its “Broken Hill’ type discovery, Norden Crown Metals presents itself as a strong investment opportunity located in Scandinavia — which is a great, low-risk jurisdiction where year-round exploration programs can be undertaken.
Finally, Norden’s properties are located near active and historical mines allowing for rapid development, putting the company in a solid position to exploit a resource if discovered.
Source: Stock House