Superior Lake Resources Limited (ASX: SUP), a company from the metals and mining sector, which explores and develops mineral prospects in Australian and Canadian regions.
On 31 May 2019, Superior Lake Resources Limited released its Annual General Meeting presentation. The presentation discussed the Superior Lake Zinc Project, the zinc market, opportunity, significant exploration.
The presentation mentioned the Proxy votes wherein 31,224,703 votes were in favour of the adoption of the Remuneration Report and 141,538 were against the opinion. 106,856,973 votes were in support of Re-election of Director, Mr Peter Williams, while 30,000 votes were against this opinion. Lastly, 106,636,573 votes were in favour of approval of additional 10% placement capacity as per Listing Rule 7.1A and for all other purposes and 250,400 were against this opinion.
Further, in the presentation, the company highlighted the global zinc market vs the North American zinc market.
Global Zinc Market:
- Stockpiles are at record lows. It is expected that its position will remain the same until 2021.
- There was a 2.1% increase in Chinese market consumption.
- The zinc mine output in China region has pulled world output down by 9.5% to 4.3 Mt.
North American Zinc Market:
- It is expected that there will be ~400 kt reduction concentrate in its production by 2021.
- Various zinc smelters across North America are expected to close.
- In North America, SUP is one of the most advanced zinc development assets.
Canada has a long history in the resources sector. It is considered as one of the top global jurisdictions to explore as well as develop mining operations. The investors from North America have shifted from the resources industry into new growth industries leaving many the sector underfunded.
Superior Lake being one of the highest-grade zinc projects worldwide, drives the exceptional low forecasted operating costs into the lowest cost quartile, driven by exceptionally high-grade ore.
The historical operation had produced concentrates as follows:
- Zinc: 52% to 53.5% of Zn.
- Copper: 22% to 25% Cu and;
- Gold and Silver: 11g/t of gold and 310g/t of silver.
In either of the concentrates, no harmful elements were found. The three zinc smelters in Canada were accessible through the existing rail networks. The rail terminal is 30 km from the site.
The preliminary project financing discussions are under progress. The company has received strong interest from global banks, private equity along with the offtakers. There is an opportunity to connect offtake with funding.
The Superior lake is a VMS deposit with multiple lens potential. The system opens along strike and at depth, containing two mineralized areas. Key mineral, as well as alteration zones, are defined. Golden Grove is a VMS deposit where 17 mineralized zones have been identified.
At the project site, only two deposits have been discovered to date. In more than 20 years, only limited exploration was completed, and there was no modern exploration work carried out. Now, the focus of the company on near mine exploration targets would be to utilize the existing infrastructure and expediating additional production.
In 2019, the company had been able to complete its first exploration program in the period of the last 20 years. Three major near mine geophysics anomalies were identified. The definitive feasibility study is under progress, expected to be completed by the middle of 2019. Also, project financing, offtake negotiations and permitting process are under progress phase.
The company has recently entered into a binding agreement with certain minority shareholders of Ophiolite to acquire an additional 15% interest in the Superior Lake Zinc project based on the approval from shareholders.
By the end of the trading session, on 31 May 2019, the shares of SUP were at A$0.021, down by 4.545% as compared to its previous closing price. SUP holds a market cap of A$19.04 million and approx. 865.45 million outstanding shares.
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