Zinc, the fourth most used metal on the planet trailing only iron, aluminum and copper, has a worldwide annual production of roughly ten million tonnes. Zinc’s primary use is in the galvanizing process of steel and in making alloys including brass and bronze. Although zinc doesn’t get anywhere near the same amount of attention as its sexier cousin copper, that may begin to change. China’s refined copper imports fell 43 percent in March year over year due to high stock piles and strong international prices while their Zinc imports surged 108 percent over last year.

In November 2006, Zinc prices hit a record high of US$4,580 tonne. At the time, analysts cited that the growing demand for zinc in China could increase by 56% by 2010 which certainly helped fuel the fire. China became a net importer of zinc in 2004. With the onset of the “Great Recession” in 2008 the price of zinc declined dramatically to just above $1,000 per tonne, far below the bullish projections a few years earlier. But in the first quarter of 2009, as marginal zinc mines were being shut down all over the world, zinc began a swift and steady recovery, reaching US$2,560 per tonne by the end of the same year, just slightly higher than where it trades today.

Today, China produces about a quarter of the world’s zinc and consumes a third of it. And overall, Zinc consumption in China has tripled since 2000 – China consumes more zinc than USA, Japan, India, Germany, Italy and Belgium combined. Some analysts, however, believe this time China’s demand for zinc will continue unabated. This, coupled with demand from other emerging nations around the world is expected to push consumption to 15.5 million tonnes per year by 2020.

Peeyush Varshney, President and CEO of TSX-V listed Canada Zinc Metals is solidly in this camp. In August, 2005 Canada Zinc Metals entered an earn-in option agreement for 65% of its Akie property. A few years later, in 2007, the company acquired 100% of the Akie property and their entire claim package pursuant to a takeover. The next year the company completed its first NI 43-101 report on the Akie property. Soon after, China came calling in the form of Tongling Nonferrous Metals Group which subsequently made a substantial investment in Canada Zinc Metals.  MiningFeeds.com sat down with Peeyush Varshney, President & CEO of Canada Zinc Metals to find out more about the company’s Chinese shareholder and what else is in store for 2011.

Your main project is the Akie zinc-lead-silver deposit in B.C., Canada. Could you give us an overview on the region?

The Akie deposit, and in fact all of our property holdings, are located in the highly prospective Kechika Trough which is the southern-most portion of the Selwyn Basin.  This basin is host to several of the world’s largest zinc-lead deposits and is one of the most prolific zinc-lead districts on the planet.

What is the existing infrastructure in the region and how might this benefit the company down the road?

The infrastructure around our Akie deposit is relatively advanced.  Akie is situated just above B.C.’s largest lake, Williston Lake, home to the largest hydro-power plant in the province. In 2008, we completed the construction of a road to the deposit. The roads connect to the town of Mackenzie (260 km to the south) where there is an existing rail line which could be utilized to haul concentrate. From Mackenzie we could transport the concentrate to Trail, British Columbia, where Teck Resources has a zinc smelter; or, transport the concentrate to the deep sea port of Prince Rupert on the west coast of B.C.  From there, the concentrate could be loaded on to ships and transported to smelters in Asia.

You finished your NI 43-101 resource estimate in 2008, what is the resource estimate on the project and do you see further exploration upside?

Using a conservative 5% zinc cut-off grade, the deposit has an inferred resource of 23.6 million tonnes of 9.1 % combined zinc + lead  (7.6% zinc, 1.5% lead)  and 13 grams per tonne silver, this equates to 3.95 billion pounds of zinc, 780 million pounds of lead and 8.95 million ounces of silver. The resource calculation from 2008 only includes the drilling we did until the end of 2007. It does not include the drilling done in 2008 or 2010. The Akie deposit remains open in all directions so the resource could certainly be much larger than our current 43-101 calculation.

You have some notable shareholders in the company, could you tell us about them and what it means to the company?

Tongling Nonferrous Metals Group currently owns approximately 35% of the Company.  Based in Tongling, Anhui Province, Tongling is a state-owned company and one of China’s largest copper smelting companies. Tongling is involved in exploration, mining, ore processing, smelting and refining; and, processing of copper, lead, zinc, gold, silver and other non-ferrous and rare metals. We were contacted by Tongling in the summer of 2008, they visited the Akie deposit and made an investment in the Company.

Lundin Mining is also a strategic shareholder of the Company – they have participated in several of our private placements and hold approximately a 5% equity interest.

Along with the Akie deposit, our significant prospective land package in the Kechika Trough represents a potential long-term development opportunity for both Canada Zinc Metals and major mining companies. Our properties could potentially provide zinc-lead concentrate for several decades to come.

What are your plans for the remainder of 2011?

Our primary objective this year is to continue doing the work required to advance the project to the completion of a preliminary economic assessment and pre-feasibility study. Currently, a geotechnical drilling program is taking place on the Akie property. From this information, we will submit an application to the government to allow us to proceed with an underground exploration program. We also anticipate a new surface drill program to test some very high priority targets elsewhere on the Akie property.

On a corporate level, we are continuing discussions with several large base metal mining companies that have shown interest in our Company and our extensive property holdings.

This interview was featured in 10 Base Metal Stocks to Watch – Part 1 – CLICK HERE for the article.

Disclosure: at publication Canada Zinc Metals is a client of MiningFeeds.com.