As I write this, Zinc has just hit another all time high of...

As I write this, Zinc has just hit another all time high of $1.4624 per pound, up 5% on today's trading.

Zinc has now risen 60% in 2 months. I dont think even the most passionate zinc investor would have predicted such a stunning run in recent months.

Zinc stockpiles are diminishing rapidly and China's demand for zinc is only increasing at an exponential rate. They currently gal;vanise 1% of their steel as opposed to majority of western counties which galvanise at 20% and japan at 10%. China's demand is infinite.

I remember last year attending the UCL conference in August last year in Melbourne. I remember them estimating a NPV of $2 billion based on the then current zinc price. I am not sure what zinc price was used to calculate the NPV but looking at the chart now for Zinc I'd say they would have used a figure close to 50c.

Assuming that all other variables remain constant, the NPV of the project now would be pushing the $6 billion mark.

That is assuming only the price of zinc has changed and nothing else.

In a recent ann by UCL ,it was estimated that there are 11.6million tonnes of zinc. COnverting that to revenue we would have 11,600,000 x 2,200 (conversion from zinc to pound) x $1.45 = $37,004,000,000

That is $37 billion of revenue and that is not inclusive of their silver and lead resources.

UCL have always been adamant that Mehidiabd would be the lowest cost zinc mine once it starts producing. Even in the dark days of zinc, when it was lagging at 30c, Murdoch always maintained that the project would go ahead.

I believe it is seriously time for the program to be accelerated. Even if costs initially may be higher than anticipated, the extremely high zinc prices should more than offset any increases in production costs.

After a year or so of production, econcomies of scale wopuld improve dramatically and Im sure the project would be a low cost producer.

It is interesting that UCL have not made any press releases of late with regards to the profitability of the project. Obviously they are aware that the project is now 2 to 3 times more profitable than it was a year ago. I wouldnt be surprised if the feasibility report is released soon and the company obtain the financing to build the plant very soon.

I cant believe that the UCL share price is lagging at 7c. Iran being in the news in recent months has had a material effect on current price but WILL NOT effect one bit future profits generated from the project and therefore the fair long term valuation of the company.

I have a heap of UCL and UCLOB which I have put away and I know are going to be worth so many more fold than current levels eventually.

Im sure UCL will define their intentions much clearer in the quartrerly and will make mention of hoping to bring procution forward to take advantage of the zinc boom.

The Mehidibad project will be the second largest zinc mine in the world when it comes into fruition. At a current mkt cap of $70m for UCL, $1 plus will eventually be on the cards and I have no doubt bout that.

Cheers