Resource World Magazine

22 www.resourceworld.com A U G U S T / S E P T E M B E R 2 0 1 8 Z inc One Resources Inc. [Z-TSXV; ZZZOF-OTC; RH33Z-FSE] recently caught our attention in its bid to expand and restart the Bongara high-grade zinc oxide deposit in northern Peru. The Bongará zinc mine was in operation in 2007 and 2008 by a previous owner. Material averaging more than 20% zinc- oxide was mined by open-pit methods, dried at the site, and then shipped 540 km westward to the coast where it was processed through a Waelz Kiln. A zinc calcine concentrate averaging greater than 60% was then sold to smelters/refineries in Peru and the United States. The Waelz Kiln is a proven processing technology that is typically used in steel mills to recover zinc oxide from electric-arc-furnace dust. In August 2008, the Bongará Mine was closed mainly due to a sharp decline in the price of zinc at that time. In June 2007, the zinc price was near all-time highs at US $3,840/tonne and by December 2008 the price had dropped to lows near US $1,100/ tonne. The previous operator mined at an average rate of 358 tonnes/day producing a total of 25,000 tonnes (55.1 million lbs) of zinc metal in 2007 and 2008. The mine had a historical (not NI-43-101 compliant) mea- sured and indicated resource containing 1.0 million tonnes averaging 21.61% zinc. In June last year, Zinc One acquired Forrester Metals which held the Bongará Mine. It also acquired the neighbour- ing Charlotte-Bongará Project which also hosts near surface, high-grade, zinc oxide mineralization that has yet to be properly delineated. Zinc One has consolidated these two projects under one operator and now has the potential to delineate a substantial resource over a prospective 8 km-long trend. Towards that end, recent drilling by the company in the newly outlined Mina Chica Zone of the Bongará zinc mine proj- ect intersected grades as high as 38.7% zinc over 35 metres (true width) as well as 19.8 metres averaging 46.8% zinc and 16.5 metres averaging 35.6% zinc. The big question on everyone's mind is: Why should the operation work now when it failed in 2008? Let's ignore the typical arguments of a larger resource base and a higher zinc price for now. The main catalyst that caught our attention was that Zinc One reports that it now has commu- nity approval to build a Waelz Kiln on the property and process zinc-oxide on-site. This is a huge advantage over the previ- ous operation. The kiln can be installed at a relatively low capital cost and its waste products are much easier to manage than the tailings from zinc leach technologies. This cuts operating costs significantly and makes the project much less susceptible to sharp dips in commodity prices and more likely to remain profitable over the long term. Zinc One's management is stacked with a proven team of geologists and engineers who have previously constructed and operated successful mining operations. The company is led by Jim Walchuck, President, CEO and Director, who is a min- ing engineer with over 38 years' experience and among other notable accomplishments was previously the Mining Manager for Barrick at the Bulyanhulu Gold Mine. The company cashed up in a recently closed private placement raising $5.4 mil- lion at $0.24 per unit. Each unit consisted of a half warrant exercisable at $0.35 per share for three years. The money is earmarked for resource expansion at Bongará. The goal is to issue an updated mineral resource esti- mate and, subject to favourable economics to place the Bongará zinc mine back into production within 24-36 months. The com- pany currently has a market capitalization of about $24 million. n Stew Vorberg and Doug Wood are Investment Advisors with Mackie Research Capital Corporation (MRCC). This article was pre- pared, in part, under contract by Thomas Schuster. The opinions, estimates and pro- jections herein are those of the authors and may not reflect that of MRCC. The informa- tion and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or war- ranty, expressed or implied, is made as to their accuracy or completeness. The issuer(s) men- tioned in this article may not be suitable for all investors. Please consult an investment pro- fessional for advice regarding your particular circumstance. Neither the author nor MRCC accepts liability whatsoever for any loss aris- ing from any use of this article or its contents. Information may be available to MRCC which is not reflected herein. This article is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. The informa- tion contained in this article is not intended to constitute a research report. Stew Vorberg and Doug Wood are beneficial owners of the com- pany highlighted in this article. Broker's Picks by Stew Vorberg and Doug Wood Zinc One – looking to profit with zinc The big question on everyone's mind is: why should the operation work now when it failed in 2008?

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