Mount Burgess’ Kihabe project is situated on the Botswana side of the Namibian border where the company has tied up an entire portion of a Neo-Proterozoic belt containing zinc, lead, and silver. What makes this region so prospective?

At this stage, we have developed resources of some 25 million tonnes (mt) at just over 3% zinc equivalent grade. This is broken up into two deposits: the Kihabe and Nxuu deposits. We intend to develop the Nxuu deposit first as this presents a potentially low risk path to early production at a modest capital investment. It is a very shallow, basin-shaped deposit with a maximum depth of about 60 meters and the mineralization is totally oxidized. Being totally oxidized means we can potentially produce zinc metal on site through solvent extraction and electro-winning. It is also likely that we can produce both lead and silver on site, and being able to do that means we then do not have to export concentrate which avoids a substantial cost. Producing metal on site would mean we are retaining maximum value-add within the company and within the Botswana economy.

What strategy does Mount Burgess have in place to bring its projects into production?

We hope towards the end of this year we can get to a position where we have defined a resource compliant with the 2012 JORC code. Our 25 million mt resource is currently compliant with 2004 JORC standards. From there we will be able to complete an economic evaluation of the project and on the back of that assessment seek development funds. To accomplish this, in the first instance we need to do some diamond core drilling. What we have found with both the Nxuu and Kihabe deposits is that these two resources as they currently stand have been delineated mainly on reverse circulation drilling. What we are seeing from the diamond core drilling in the same location is a significant increment in the grade from the Diamond Drilling assays we receive versus what we got from the RC drilling. Increasing the grade by about 45-50% will have a significant impact on the economics of the project. We have to drill out the Nxuu resource so that we can calculate it based entirely on diamond core grades.

What logistical advantages does the project enjoy?

It will be a low risk and low capital project. Once we have completed the diamond core drilling, we believe we will be in a position to move forward into doing the feasibility study. We are hoping we will meet that guideline by around about October or November of 2017. We expect a very low waste to ore ratio at around 3:1, and we anticipate not having any geotechnical problems because the deposit is shallow and will not have steep pit walls. We intend a throughput of around 750,000 mt/y. This production level will require low Capex making it a palatable investment hurdle for a junior explorer and our shareholders.

What trends in the zinc price does Mount Burgess foresee and what shifts does the company expect in global supply and demand?

We believe there is the potential to see an increase in the zinc price. It is wavering at the moment and it should be higher. Several large zinc mines are no longer in production or shortly will be going out of production, which creates a situation where close to 7% of world production disappears. At the same time, there is 2.7-2.8% increment increase in world consumption per year. With all the global political turmoil  at the moment, we are seeing a lot of caution in the market. However, as the prices of both zinc and lead decline, we are seeing a lot of stocks being bought at these lower prices.

What players in the zinc production marketplace have the greatest capacity to impact the global supply of zinc?

There are many warehouses, particularly in China, that are outside of the LME and the Shanghai Futures Exchange, and we do not know what their stock levels are. We believe that stocks are going out of LME and going into unmonitored warehouses ready to make a turn. It is not a matter of supply and demand, but rather a calculated maneuvering of the market. Nonetheless, with all of these large producers now going out of production, something must happen to meet supply. The only thing that could disrupt the current situation would be something like if the large Mehdiabad zinc deposit in Iran comes into production. However, there has been much controversy over when it will commence production.