Barry FitzGerald: Luck of the Irish behind zinc player as it targets WA gold and base metals

“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.

It is a tough ask for a sub-$10 million market cap junior explorer to come up with a project that creates some excitement in exploration circles.

Zinc of Ireland (ASX:ZMI) has done just that with its pick up of the Mt Clere project in Western Australia’s Gascoyne region.

Since the deal, the stock has raced from 1c to 1.4c for a market cap of $8 million in a broader market where everything has been heading south.

ZMI is doing what everyone wants to see a junior doing – having a crack with a high risk/high reward drilling program that just might produce a craic on ninety outcome for shareholders.

Interest abounds Mt Clere because ZMI’s exploration will be targeting Robin 21, a large-scale geophysical anomaly with strong magnetic and gravity signatures.

Those who know about these things reckon the “bullseye” anomaly stands as a rare exploration opportunity in WA as it has never been properly tested.

BHP (ASX:BHP) drilled a single hole in to the anomaly in the 1990s testing for sedimentary-hosted base and precious metals deposits like the 1981 Abra discovery, about 115km to the north-east of Mt Clere.

But it pulled up short of the buried target, leaving it to those who followed to apply increasingly sophisticated geophysical techniques to refine the Robin 21 target.

As for Abra, it finally became a producing mine in March 2023 only for the operating company to be placed in voluntary administration in April 2024. It continues to produce and work is underway on its recapitalisation.

Back at Mt Clere

ZMI reckons the scale and characteristics of the anomaly align with globally significant SEDEX (sedimentary exhalative) and IOCG (iron oxide copper gold) deposits like the historic Sullivan deposit (zinc-lead-silver-tin) in British Columbia in the first instance, and Evolution’s Ernest Henry (copper-gold) mine in Queensland in the second.

Only the drill bit will tell if any of that is on the mark. While there is a chance of success, there is also a real chance of failure. But as suggested earlier, at least ZMI is having a crack in the hope of creating some craic for its shareholders.

Exploration types in Perth that have gone through all the technical stuff ZMI has published on Mt Clere reckon drilling the anomaly is certainly worth a shot, which is why the share price has been bubbling in recent days.

ZMI plans to drill at least one hole into the anomaly. Planning for that on the heritage cleared site is underway.

Because of ZMI’s modest market cap, its share price is highly leveraged to success with the drill bit. Share price downside on Mt Clere being a failure is limited by ZMI’s current modest market cap, its zinc interests in Ireland no less, and its recent push into Murchison gold exploration.

Zinc deficits coming

ZMI controls 32 prospecting licences covering 130km of prospective strike along Ireland’s zinc-rich Rathdowney Trend which is home to the company’s flagship Kildare deposit (11.3Mt grading 9% combined zinc-led).

The Irish zinc presence will still be there whatever comes of Mr Clere and the Murchison gold exploration effort. And it could well come into its own if zinc prices take off, as some suspect will need to happen if future demand for the galvanising metal is to be met.

South32 (ASX:S32), a big zinc producer and getting bigger thanks to new projects, reckons global demand growth is expected to outpace production by 3 million tonnes to 2032; an industry challenge similar in magnitude to copper.

Zinc prices aren’t responding to that sort of assessment just yet. The current price of $US1.27/lb is just ahead of last year’s average but further ahead of the 2023 average of $US1.20/lb.

ZMI said recently it was closely monitoring zinc market fundamentals while pursuing potential non-dilutive funding arrangements to advance its Irish zinc interests, supported by both EU and Irish-back initiatives. Discussions with potential partners are ongoing.

The views, information, or opinions expressed in this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.