Since our last article, Canada Zinc Metals Inc. (CZX .V) has encountered a significant and lengthy pull back which has occurred despite being engaged in a drilling campaign at their Akie location (Cardiac Creek) and the continued rise in zinc prices.
While CZX.V reports occasional meetings with Tongling Nonferrous Metals Group Holdings Co. Ltd. (i.e. own 30% of CZX's shares), little details have been reported publicly. In addition, details of Teck Resources and Korea Zinc Company involvement have not been reported on, to date this year, though a some information is available in their last investor presentation (page 11).
Furthermore, the discussion of spin offs and talks with Lundin and Excelsior Mining for optioning other parts of the property (Mt. Alcock) mentioned last winter have yet to amount to any formal agreements. In addition, CZX.V has yet to pick up analyst coverage despite the bullish climate for zinc.
This, perhaps, explains the pull back since February. However since then the company has engaged in a share buy back pr0gram (started Aug. 1) and committed to purchase 8.1M shares versus the 569K they had purchased in the last 12 months at the time of the announcement (July 28).
On August 30, CZX.V released an update on their drilling program of which initial results are expected in the coming weeks. To their credit, the campaign was reportedly been completed on time and under budget resulting in 1,100 sample coming from eight holes from 4,700 meters depth.
Hence, the upcoming drilling results represent a potential catalyst for the stock price from current levels. We are also hoping that these results will enable the company to capitalized on said opportunities further by providing them with more bargaining power with potential partners.
Either way, the key here is that CZX.V has to unlock the value of its assets for existing and future shareholders. With a current book value of $0.50 cents, we believe that the company is very much undervalued. As such, it's time for some results.
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