asx guru comments on ovr

www.asxguru.com.au

Jan 27, 2011
Overland Resources (OVR) Zinc Shortages
Categories: ASX Speculative Stocks

Not long after my last post about Overland Resources (OVR) back in October of 2010, we saw a new 52 week high of 40c being made and then there was a sell-off. You can see from the above chart that the selling has been quite severe with lows of 18c being reached in mid December of 2010.
Over the last few weeks however, some sense seems to have returned to the market lately and now we are beginning to see a nice recovery in Overlands chart. Today the stock price pushed higher again and closed at the days high of 33c.

Perhaps it was the growing awareness of emerging zinc shortages as this snippet of information from an unrelated news article shows:

As a result of the impending closure of several major zinc mines over the next few years, we believe the development of Dugald River to be very timely, chief executive Andrew Michelmore said.

MMGs Century mine in Queensland, Australias largest open-pit zinc mine, is scheduled to close around 2015, taking out about 4 per cent a year of the global zinc supply.

Zinc mines in Canada and South America are also scheduled for closure around the same time, meaning more than 1 million tonnes of zinc from a global supply of about 12 million tonnes a year will be taken out of the market by 2015.

With limited exploration in the zinc sector and limited plans for new supply to enter the market in the next few years, Dugald is scheduled to be the only major new project to come onstream to start meeting the supply shortfall, as demand is expected to increase.

We still may see another bout of panic selling in Overland Resources, as our local market is still very fragile, but the fundamentals remain. As my initial post about Overland Resources shows, the company is sitting on a very nice Canadian based project called the Yukon Base Metal Project.
News on an upgraded JORC resource should be due any time now as well!