News

May 27, 2008

Firestone Ventures May Bring Its Torlon Hill Zinc Project Into Production Just As The Metal Price Is Ablaze

By Charles Wyatt

It looks like a very sensible move by Lori Walton, chief executive of Canadian-listed Firestone Ventures, to hive off her company’s non-zinc assets into a new listing called Northern Tiger Resources. Even if everything goes according to plan and schedule at Firestone’s Torlon Hill zinc-lead project in Guatemala it won’t be in production much before 2011. That could be the year when zinc once again becomes a top performer among base metals. A huge benefit would then befall Firestone, if it’s seen as a pure zinc producer at that time. In any case, shareholders will still participate in the other assets via the holding in Northern Tiger. At the moment zinc is going through a rough time, and there are plenty of short positions out there adding to the downward pressure. There will come a time when these shorts will have to be covered, but that may provide only temporary respite.

One more-than-educated commentator, Teck Cominco chief Don Lindsay, expects that low prices will cause some marginal zinc mines to close in the coming months, and that development should then cause demand once again to overtake supply. The big push forward in price will follow and Mr Lindsay sees a significant improvement in 2010, up from the low of around US$0.77 cents per pound expected next year. There are also a couple of extraneous factors which could accelerate his prediction. First, the...