Darnley Bay Resources: Bringing an Old Zinc District Back to Life

Several zinc mines have shut down in the past few years due to depletion, and the warehouse inventory levels of the base metal have been steadily declining. The market is finally waking up and starting to look at zinc companies again. Thibaut Lepouttre of Caesars Report profiles Darnley Bay Resources, one of the companies hoping to fill the supply gap.

Darnley Bay Resources Ltd. (DBL:TSX.B) acquired a past-producing zinc asset in receivership and will publish a new PEA within the next few months.

Pine Point produced almost 10 billion pounds of zinc, and it hasn’t been mined out
In October of last year, Darnley Bay entered into an agreement with the court-appointed receiver of Tamerlane Ventures to take possession of the Pine Point zinc project, located less than 50 kilometers east of the Hay River in the Northwest Territories.

The project isn’t just one big zinc zone, but actually consists of in excess of 40 zinc-lead deposits over a total strike length of almost 70 kilometers. Of these deposits, ten have been the subject of an NI-43-101 report, compiled for Tamerlane Ventures, which owned the asset before going into receivership.

The acquisition terms are actually very straightforward—the receiver probably really wanted to get it off its books and recoup a part of the losses. Using a valuation of CA$0.20 per share, which is where Darnley Bay priced its most recent hard dollar private placement, Darnley Bay paid a total consideration of approximately CA$8M to acquire 100% of the asset in a mix of cash and stock.

Pine Point is a historic producer, and the district has been known for its zinc and lead assets for almost 100 years when Cominco started to explore the tenements before the Second World War and started to sink a shaft. The company discovered almost …read more

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