Red River makes first delivery from Queensland zinc mine
With zinc prices at ten-year highs, it’s a perfect time for Red River Resources to deliver the first concentrate from its Thalanga zinc mine in Queensland.
Zinc has had a stellar run recently, up 32 per cent since the start of January to last week’s high of $US3369.50 per tonne on strong global demand and tight supplies.
The metal is used to galvanise steel and is benefiting from Chinese infrastructure development and higher steel prices.
Melbourne-based Red River (ASX:RVR) this week delivered the first two loads of zinc concentrate from its Thalanga site in central Queensland to a storage facility in Townsville.
Thalanga is about 200km south-west of Townsville.
The concentrate will be sold to commodity trading group Trafigura under a deal signed earlier this year. Red River is also preparing to make its first lead concentrate delivery from Thalanga to Trafigura.
The deal is for sale of 122,000 dry metric tons of zinc concentrate and 27,400 dry metric tons of lead concentrate.
Pricing is determined by metal prices on the London Metal Exchange (LME) at the time of shipment, with tonnage expected to be shipped in the first 36 months after the start of commercial production.
First deliveries of zinc concentrate came only a month after production began ahead of schedule and under budget, Red River managing director Mel Palancian said.
Sales revenue will go towards funding exploration across its portfolio of deposits in the Mt Windsor Belt.
Red River had no debt and a cash balance of $15.6 million at the end of September.
Its shares climbed 3 per cent yesterday to close at 32c.