Independent report of the Sully Project; must read
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Over a billion years ago, a mineral treasure of unimaginable wealth was deposited at the bottom of the ancient sea that then covered western Canada.
Part of this treasure trove was discovered in 1892. Now, three of the world’s top mining experts think they’ve found the rest.
If they’re right, shareholders of Kootenay Zinc Corp. could enjoy a phenomenal payday!
This little-known company is using space-age technology to find the missing piece of one of the world’s largest zinc deposits.
By Lior Gantz,
President, Wealth Research Group
Kootenay Zinc Corp. [OTCQB: KTNNF/ CSE: ZNK] isn’t well known – at least not yet.
But I predict it will soon become one of the most talked about natural resource stocks of our time. This not-yet-famous company has:
One of the most impressive lineups of geologists, executives, and consultants we’ve ever seen in our combined 20+ years of studying natural resource companies;
Sufficient capital to complete its exploration work;
Access to infrastructure (water, roads, electricity… even a nearby smelter);
And most importantly…
Preliminary data suggesting the company might find “the missing piece” of one of the largest zinc deposits the world has ever seen…
A Very Special Kind of Zinc Deposit
Before I tell you about Kootenay Zinc, allow me to provide you with some important background information that will help you understand why I’m so enthusiastic about this stock profile.
Although there are several types of zinc deposits, the most important by far are the so-called SEDEX deposits created over a billion years ago at the bottom of shallow, inland seas that have long since vanished. 2, 9, 15
According to the U.S. Geological Survey, SEDEX deposits account for more than 50% of the world’s zinc and lead reserves, and furnish more than a quarter of worldwide production of those two metals. And as you’ll discover momentarily, both metals are far more important than most people realize.
About one hundred and twenty-nine SEDEX deposits are known to exist around the world, but the vast majority of the world’s zinc and lead is concentrated in just six areas. The Selwyn Basin in western Canada is the second largest of these natural resource treasures. 2, 7, 9, 15
The area near the town of Kimberley, British Columbia (where Teck Resources operated the Sullivan Mine) is home to a SEDEX deposit of epic proportions… and Kootenay Zinc is targeting the Sully project approximately 30 kilometers [18 miles] east of the historic Sullivan mine.
The gravity anomaly being explored on Sully coincides with Aldridge Formation strata interpreted to be equivalent to the Sullivan Horizon as mapped on surface and projected to depth on a near-vertical limb of a major overturned fold structure. The gravity anomaly is interpreted to be caused by a mass of similar size to Sullivan.
In terms of present metal prices, value of production from Sullivan is over $40 billion. Clearly, discovery of a similar deposit at Sully would have significant and long term economic ramifications to the province of British Columbia and shareholders of Kootenay Zinc Corp.
The First Piece of the Treasure is Found
In 1892, using technology that’s crude by today’s standards, four prospectors discovered what many believe is just the first part of one of the world’s most valuable mineral treasures. 8
Present day, searching east of the town of Kimberley, Pat Sullivan and three colleagues found one of the world’s largest, richest zinc deposits. 8, 13
Additional exploration and development work continued for several years, and in 1909 commercial operation of the Sullivan Mine began.
Although the typical zinc mine operates for about 12 years, the Sullivan Mine, because of the size and quality of its ore deposit, operated for almost a century. 8, 14
Until its closing in 2001, the Sullivan Mine produced more than 8 million tons of zinc, 8 million tons of lead, and 300 million ounces of silver having a combined value in excess of $40 billion at today’s prices.
Despite being one of the biggest zinc deposits the world has ever seen, the natural treasure that powered the Sullivan Mine for a century might be just part of a far larger deposit waiting to be discovered…
The Ultimate Treasure Hunt Begins
When it comes to SEDEX deposits, the starting point is locating rocks dating to a very specific time period. That’s because every SEDEX deposit on the planet was created in Paleozoic and Proterozoic basins. 2, 7, 9
Looking for a SEDEX deposit among rocks that are older or younger than that specific time window is destined to fail.
So, if you’re looking for a Sullivan-sized SEDEX deposit, you start by finding nearby rock formations of Sullivan age. And to do that, you need someone who knows more about the Sullivan Mine and its underlying geology than anyone else on earth…
The Rest of the Sullivan Deposit?
Within the mining community, Paul Ransom is widely considered the world’s leading expert on massive, Sullivan-sized SEDEX deposits. For more than 30 years, he worked for Cominco (now Teck Resources Ltd.), which operated the Sullivan Mine.
When Sullivan closed in 2001, Paul became an independent consultant working throughout the region. In the course of his work, he compiled a database about the area’s geology, including the location of other rock formations that were formed at the same time as the Sullivan SEDEX deposit. 3, 12
According to Paul’s research, a large concentration of Sullivan Time rocks is located just over 18 miles (30 kilometers) from the Sullivan Mine at what is known as the Sully Project, operated by Kootenay Zinc Corp. And while 18 miles might seem like a significant distance if you’re out for a Sunday stroll, it’s right next door in geological terms.
Paul’s research was confirmed by Kootenay Zinc’s drill holes that revealed the existence of Sullivan Time strata, along with trace mineralization of zinc and lead.
But finding the right general area is just the first step…
A Geological Dream Team, Armed with High-Tech Tools
Kootenay Zinc has assembled a three-man “dream team” of geologists to pinpoint the precise location of what’s looking more and more like the rest of the Sullivan mineral treasure.
In addition to Paul Ransom, the company has tapped the expertise of:
Dr. David Broughton, one of the world’s most renowned experts on sediment-hosted mineral deposits. Dr. Broughton, who has a PhD in geology, received the prestigious Thayer Lindsley Award for his discovery of the largest copper ore deposit in the world.
Brian Jones, who was instrumental in finding one of Canada’s most famous mineral discoveries, Voisey’s Bay, is one of the world’s top experts in the use of gravity surveys. 6
This treasure-hunting triumvirate has a combined 100+ years of experience locating some of the most valuable mineral deposits on the planet:
Voisey’s Bay nickel project was sold for $4.3 billion.
Ivanhoe Mines has a market capitalization of over $3 billion and it contains one of the world’s largest copper deposits and a massive platinum deposit and a world class zinc deposit. Dr. Broughton was instrumental in some of these discoveries and received awards as a result.
And what they’ve found at Kootenay Zinc’s Sully Project, a scant 18 miles from the famed Sullivan Mine, has the potential to make history…
Treasure Maps Reveal All
Using technology that would have seemed like magic to Pat Sullivan back in 1892, Kootenay Zinc’s geological dream team has created a series of maps that reveal what might lie below the surface of the Sully Project.
These maps were created using what’s known as gravity mapping, a space age technology that measures the exceedingly small variations in gravity caused by the density of underground rocks. 11
When subterranean rocks are relatively dense (like lead and zinc ore), their extra gravitational attraction increases the downward pull and creates anomalies that show up as color variations on a computer generated map. 7, 11 (see website)
In the map of the Sully Project below, the grey-green areas represent two gravity anomalies indicative of very dense rocks like sphalerite (zinc ore) or galena (lead ore).
As you can see, there appear to be not one, but possibly two, large anomalies. It doesn’t provide details about the type of anomaly or potential for deposits themselves though.
That’s where computer modeling comes into play…
A Closer Look (see website)
The following map, created from data collected by Kootenay Zinc’s geological team, uses sophisticated algorithms to provide a much more detailed look at what lies below the surface.
Move your cursor over this map and you can see a three-dimensional view of what appears to be two massive, side-by-side anomolies. After reviewing the data that was used to create this map, David Broughton was absolutely intrigued regarding the potential to be a once-in-a-generation discovery.
But how likely is it that two huge SEDEX deposits would form side by side? And how likely is it that they would exist 18 miles from the Sullivan Mine?
Highly likely. Here’s why…
Vent Fields are the Norm
Hydrothermal vents responsible for the creation of SEDEX deposits rarely occur in isolation. Typically, they’re found in clusters, what geologists refer to as vent fields. This is to be expected since the geological forces that create hydrothermal vents affect large areas rather than just a single location. 1, 2, 7
A study conducted for the National Oceanic and Atmospheric Administration shows that vent fields can sometimes stretch for miles.
So, it’s highly unlikely that the Sullivan deposit is the only SEDEX deposit in the area. In fact, about 3 miles from Kootenay Zinc’s Sully Project, the Kootenay King Mine is tapping large zinc and lead SEDEX deposits.
Preliminary drilling at Sully may suggest this could be a SEDEX deposit of historic proportions. And the timing couldn’t be better…
Surging Demand, Dwindling Supply 4, 5, 10, 16
Demand for zinc is soaring even as supplies are dwindling, pushing prices relentlessly higher (and making every ton of zinc ore sitting in the ground worth more and more with each passing day).
Consider these facts:
FACT: Zinc is the fourth most-used metal in industry, behind iron, aluminum, and copper.
FACT: The market for zinc is $34 billion per year, larger than silver ($18 billion), platinum ($8 billion) and molybdenum ($5 billion) combined.
FACT: Zinc is indispensable for many important industrial applications. It’s used to galvanize steel or iron to prevent rusting, and to manufacture specialized batteries. It’s also a crucial component of important alloys like brass.
FACT: Major zinc mines have been shutting down. China recently shut down 26 lead and zinc mines for environmental reasons. Ireland’s Lisheen Mine and Australia’s Century Mine have also shut down, reducing annual production by 630,000 tons.
FACT: China’s demand for zinc is growing even as it’s reducing supplies. In 2015, China consumed 47% of the world’s zinc as it continued building mega-cities, bridges, airports, and seaports at a frenetic pace.
FACT: Belgium-based Nyrstar, the world’s #1 zinc producer, has explored shutting down mining operations in an effort to deal with a burdensome debt load. If that were to happen, it would reduce supply even more.
FACT: Zinc stockpiles are plummeting. Warehouse levels are less than half of where they were in 2013.
And all of this has had predictable consequences…
FACT: Zinc prices are skyrocketing. This vitally important industrial metal began 2016 at $0.70 per pound, and ended the year at $1.04 per pound – a 48.5% increase in a single year. As 2017 began, zinc continued to move higher and is consistently above $1.20 per pound.
Soaring demand, combined with tight supply, means higher prices for zinc in the years ahead. But that doesn’t mean you should buy shares of just any zinc miner. In fact, in our combined 20+ years of experience with natural resource stocks, I estimate that only a small percentage of junior mining stocks deliver triple-digit returns for shareholders.
Here’s why…
Our Secret for Finding Winning Resource Stocks
In the mining industry, reputation is everything. Nobody of any stature is willing to get involved in a project unless he or she is convinced it has real merit. And believe me, the big names in the mining business have access to information you and I will never have.
So, when analyzing a mining company (especially the smaller companies), the first thing I look at is personnel. Because having people with a proven track record opens the door to capital.
A company that’s able to attract big names has a good chance of raising the capital needed to complete its projects. A company that doesn’t, will likely run out of money before it’s able to turn a potential discovery into a proven find.
And Kootenay Zinc, in addition to its 3-man dream team of geologists, has managed to secure the backing of three of the biggest names in mining:
Peter Meredith has been a director of Ivanhoe Mines Ltd. (formerly Ivanplats Limited) since 1998. He has also served as the company’s Deputy Chairman and Chief Financial Officer. Prior to joining Ivanhoe, he was a partner at Deloitte LLP, Chartered Accountants. Peter is the right hand man to Robert Friedland where they discovered one of the world’s largest gold and copper projects, the Oyu Tolgoi.
Jonathan Rubenstein is Chairman of Mag Silver Corp. as well as Vice President of Andagan Resource Corp. In 2001 he was co-founder of Canico Resources Corp. Four years later, he was instrumental in the sale of the company for $941 million. He also played a key role in the 1999 sale of Sutton Resources (where he served as a Vice President) to Barrick Gold for $525 million.
Stuart (Tookie) Angus is a widely known and highly respected independent business advisor to the mining industry. Tookie is the current chairman of Nevsun Resources, a billion dollar copper and zinc producer. In addition to serving as Chairman of K92 Mining, he has served as a director of numerous mining companies, including: First Quantum Minerals, Canico Resources, Bema Gold, and Ventana Gold.
Having people of this caliber on board has allowed Kootenay Zinc to close two private placements, raising the capital needed to carry out its exploration and development plans at the Sully project. Interestingly, both financings were oversubscribed – a good omen for any future offerings if the need should arise.
The Final Ingredient for Success
As you’ve seen, Kootenay Zinc Corp. has what appears to be a very good chance of finding a sizable mineral deposit of immense value. It also has world-class management, consultants, advisors, and backers.
The company is also fortunate to be located in an area where the infrastructure needed to operate a commercially successful mining operation already exists.
The Sully project can take advantage of all the roads, bridges, power lines, railroad spurs, and water resources constructed over the years for the Sullivan Mine 18 miles away. There’s even an existing smelter in the nearby town of Trail that’s already set up to process zinc and lead ore.
This infrastructure cost tens of millions of dollars – money that Kootenay Zinc won’t have to spend. And every dollar saved increases profits, which, in turn, impacts share prices.
The Importance of Timing & How to Play the Coming BOOM in Zinc
I’m convinced shares of Kootenay Zinc [OTCQB: KTNNF/ CSE: ZNK] have the potential to hand shareholders returns that could rival many of our previous recommendations.
But to make huge profits with mining stocks, you have to buy before the company confirms a major find. Typically, junior mining stocks experience a surge in interest within days of a discovery. Trading volume skyrockets, and the price mushrooms.
You might find it hard to believe returns like these are possible. But let me assure you that fast, triple-digit returns are actually the norm, not the exception, when a junior mining company announces a major discovery.
Zinc is now in what we call the “Aggressive Takeover” stage. Small-cap companies that own promising deposits are being merged for a thick premium into large-cap mining behemoths.
I have personally examined 109 zinc projects in 2016–2017, and today, I want to make sure you get the full scope of what your biggest winner could be in 2017/2018.
I encourage you to do your own due diligence on Kootenay Zinc Corp., and if your research confirms what I’ve written here (as I am confident it will), consider investment exposure to this red-hot zinc market. If the company is able to confirm finding the rest of the historic Sullivan deposit, those shares could become one of the best investments you’ll ever make.
P.S.
Our recommendations are based on intensive research, including contact with management. Once you’ve completed your due diligence, consider locking in your position!
Instead of giving you a sales pitch, go to our website to understand the wealth of knowledge we publish to arm investors with critical data.
About Lior Gantz
Lior’s business model is driven by teaching the principles of wealth, the habits of asset accumulation, and the art of getting richer, by arming his subscribers with the confidence and capability to build a brighter future.