zinc prices are going to explode?, page-23

http://www.kitco.com/ind/MetalsReport/2013-07-02-China-Base-Metal-Tiger-Sets-the-Trend-for-Metals.html

TGR: Zinc is another metal with weak prices, but you believe higher zinc prices are not that far off. Why is that?

SI: Zinc is our choice for a base metal to be bullish on in the medium term. Inventory on the London Metals Exchange has been very high for more than 12 months, topping 1.2 Mt not too long ago. Now, it stands at just over 1 Mt.

The interesting dynamic here is the recent closure of several very large zinc mines. There is nothing fundamentally wrong operationally with these mines; they have simply run their course.

The zinc market differs from the copper market in that smaller mines predominate. New advanced-stage zinc projects cannot meet that supply loss, let alone additional demand growth. Despite today's high inventories, mines closing in 2014 and 2015 and the lack of new projects will squeeze the supply side and drive the price higher.

You can count the number of good zinc mines on one hand. Anyone who has any reasonable exposure to zinc stands to do well when the zinc price runs.

SI: We think zinc is a very interesting thesis in the next 12 months.

It is important to do your homework. Look for good projects in safe jurisdictions, led by good management teams. All three of these ingredients are essential, especially given the market's negative sentiment right now. Companies that require near-term financing will be challenged