While the deal making and swapping paper is where a lot of the fun is, and can be good or bad for shareholders the facts remain that a certain increasing amount of equity/debt and capital is all doing a dance around getting access to Zinc metal in the ground, and not just in the ground but not so deep as to be uneconomic, and in a juristiction where the rules don't change or there aren't cripplingly high capital hurdles to overcome. Sure there will be the short term "smoke and mirrors" of warehouse stocks story continue but when the music stops, people will want the metal delivered to their factory, or the concentrate delivered to their smelter. Almost no-one has been seriously spending money looking for Zinc in either greenfields or brownfields environments in the last 20 years, even the last 5 "minutes of sunshine" of high Zn prices from 2005-2007 didn't really result in much new metal being found, it been a strictly "batten down the hatches" survival mode and value destruction story for Zinc miners since the GFC.
With low exploration expenditure and little readliy available metal in the ground, eventually transactions will have to happen in the Zinc space that allows some metal to come out of the ground.
Whether thats from Zinc majors such as Trevali/Teck/Vedanta or Glencore or from the smelters themselves, something is going to happen eventually. Lets not forget that it was really Glencores supply cuts/disclipine that really got things going with the price of Zinc....
I know its been said a bazillion times before but when you look at nearly all other Zinc development possibilities in the future there is nearly always something "wrong" with all the proposed projects i.e. Privately owned or not listed on the ASX, orebody too deep, too expensive, juristiction risks, insufficient grade, delays in permitting/takes too long to get to production, unknown metallurgy etc etc - then only one that dosen't have an obvious flaw or show stopper is RVR.
RVR Price at posting:
25.0¢ Sentiment: Buy Disclosure: Held
