Zinc recorded a mild decline last week as the U.S. dollar
strengthened against foreign currencies, but industry analysts remain bullish
regarding the metal moving forward. On Thursday, Goldman Sachs upped its
six-month price forecast for zinc to $2,100 a metric ton, an increase of more
than 23 percent over previous forecasts. The investment banking firm cited
stronger than previously anticipated demand from China and a tightening supply
stemming from mine depletions and producer discipline as primary factors in its
calculation.
“We view zinc as the bullish exception in the metals space,
and remain very bearish on the outlook for the other base metals prices, most
notably copper and aluminum, where we see very strong supply growth,” analysts
with Goldman Sachs wrote in the firm’s May 19 report. “Zinc has by far the most
bullish supply-side dynamic.”
Star Mountain Resources, Inc. (OTC: SMRS) is in a favorable
strategic position to capitalize on this market growth following its 2015
acquisition of the Balmat mining complex in St. Lawrence County, New York. In
February, the company announced the results from an Industry Guide 7 (IG7)
Mineral Reserve Report for the property, which reflected 585,000 tons of proven
and probable reserves with 9.2 percent grade zinc that’s expected to generate
roughly $80.8 million in revenue over Star Mountain’s initial 2.5-year mine
plan.
“We believe the findings in the IG7 report are very positive
and reaffirm our confidence that the geological and engineering conditions
reflected in the long production history of the Balmat mining operation can be
sustained well into the future beyond the initial 2.5-year plan,” Joe Marchal,
chief executive officer of Star Mountain, stated in a news release. “We
continue to evaluate the current zinc market and the best strategy to move
forward with a production plan and schedule.”
Last month, Star Mountain took a major step toward
commencing operations at the Balmat property when it secured a $500,000 loan
from a New York public benefit trust. Marchal referred to the promissory note
as “one of many partnerships in our plan to re-commence operations at the
Balmat Mine.” This capital is expected to play a key role as the company
continues to prepare the mining complex for operations before putting it back
into production in order to capitalize on the expected strengthening of zinc
prices in the months to come.
Star Mountain is led by an experienced management team
featuring decades of applicable industry experience. CEO Joe Marchal has worked
in the financial sector since 1983, most recently serving as CEO for the
Asia-Pacific Region of Chi-X Global, Inc. The company’s president and chief
operating officer, Mark Osterberg, Ph.D., has worked for major gold and base
metal mining firms for over 30 years, during which time he has provided high
level technical expertise and managed both domestic and international
exploration and development projects. This combined experience, along with the
experience of other members of the management team, played a key role in Star
Mountain’s acquisition of the Balmat zinc mine late last year.
“The recent rebound in zinc prices along with a
strengthening world-wide economy validates our decision in November 2015 to
acquire the Balmat zinc mine at a deeply discounted price and its 585,000 tons
of proven and probable reserves of 9.2% grade zinc plus the mineralized
material adjacent to the current reserves that in all likelihood will be
reclassified to reserve status as the mine progresses,” concluded Marchal.
For more information, visit www.starmountainresources.com
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