Tinka Resource Ltd. (TK.V) is a mining company focused on exploration and discovery. TK.V's 100% owned Ayawilca property is located 200 km north of Lima in the zinc-led-silver belt of central Peru with access to infrastructure.
TK.V also has over 50% institutional ownership and has analyst coverage from GMP Securities, Industry Alliance and Canaccord Genuity. Coverage was initiated on June 2018, with notes on November 2018 , June 2019 and March 2020.
News releases
Mar. 26 - Advises of COVID-19 Case in Peru - One of its employees has tested positive to COVID-19 in Peru.
The Company is complying with all protocols with respect to the COVID-19 pandemic that have been established under the state of national emergency in Peru which was declared on March 15th, 2020. Ayawilca has been in lock-down since the state of national emergency was declared and all non-essential personnel were removed from site.
May 11 - Provides Update On Peru Activities. Company’s employee in Peru who tested positive to COVID-19 as disclosed on March 26th has now fully recovered from the virus and is in good health.
The state of emergency in Peru has been in place since March 15th and is now extended until May 24th following a recent announcement by the government of Peru. Prior to the restart of exploration activities, Tinka will be required (along with all resource companies) to obtain approval from government bodies for its own health protocols. The protocols will incorporate self distancing, disinfection procedures and COVID-19 testing among other measures.
The Company is planning for the next exploration phase at Ayawilca to commence during the latter part of 2020. Tinka is well funded, following the investment by Buenaventura and Sentient in January 2020, and has no debt.
June 9 - To Recommence Exploration At Ayawilca In Peru: The state of emergency in Peru is expected to continue until June 30th. As such, reactivation of exploration activities will require additional and carefully planned logistics.
Tinka will reactivate its exploration programs at Ayawilca cautiously over the course of a period of weeks. A gradual, cautious approach is essential to ensure our health protocols are functioning well and as safely as possible, to minimize the risks of COVID-19 infections to our employees and our nearby communities.
Sep. 9 - Provides Update on Upcoming Drill Program at Ayawilca Zinc-Silver Project: Preparations are underway for a ~7,000 metre drill program consisting of approximately 20 diamond drill holes.
Three drill rigs are expected to mobilize to site and commence drilling by the end of September 2020. The program will target areas where earlier drilling identified high grade zinc and silver mineralization, often outside of the known resources. It's anticipated that the drill program will be completed in early 2021, subject to potential delays (Covid-19).
Oct. 8 - Commences Drilling at the Ayawilca Zinc-Silver Project: Initiated the 7,000 metre drill program at Ayawilca. The 20-hole program is anticipated to take approximately three months to complete.
The drill program has two objectives: firstly, to convert inferred resources to indicated resources in areas at the project with thick, high grade zones of mineralization; and, secondly, to test for extensions of zinc and silver mineralization down-dip of known zones in several planned step-out holes.
Two drill rigs are on site and will test the extensions of the high-grade mineralization within the Ayawilca Zinc Zone (West and South areas - Figure 1). A third rig is expected to be added to the program by the end of October.
Nov. 19 - Provides Update on the Drill Program at Ayawilca, Mobilizes a Third Drill Rig: As at today's date, 2,000 metres have been drilled in the 2020 program and the overall program is about 30% complete. A third rig has been mobilized to site and has commenced drilling. We now expect the drill program to continue until February 2021, at which time a break in the drilling will occur to compile data and update the project resource estimations.
Three holes have been completed since the program commenced in October (drillholes A20-169, 170, and 171), and three holes are in progress (drillholes A20-172, 173 and 174). Samples for the first two drillholes are in the laboratory, and we expect assay results to be received by the end of November.
Nov. 30 - Drills 26 Metres Grading 10% Zinc at Ayawilca: pleased to announce partial results from drill hole A20-170 and full results from A20-169, the first two holes of the 2020 drill program at the Ayawilca project in central Peru.
Hole A20-170 (South Ayawilca): 12.2 metres @ 4.1% zinc, 1.2% lead & 60 g/t silver from 202.9 metres depth, including; 2.2 metres @ 10.2% zinc, 2.5% lead & 121 g/t silver from 202.9 metres depth; 25.9 metres @ 10.0 % zinc & 15 g/t silver from 282.6 metres to end of sampled interval, including 13.7 metres @ 15.9% zinc & 26 g/t silver from 282.6 metres depth.
Hole A20-169 (West Ayawilca): 0.9 metres @ 13.7% zinc, 0.6% lead & 133 g/t silver from 108.8 metres depth; and 1.1 metres @ 12.4% zinc, 2.1% lead & 147 g/t silver from 136.0 metres depth; and 1.1 metres @ 18.8% zinc, 5.0% lead & 172 g/t silver from 190.0 metres depth; and 0.7 metres @ 15.2% zinc, 1.3% lead & 71 g/t silver from 210.5 metres depth; and 1.2 metres @ 22.7% zinc, 3.9% lead & 190 g/t silver from 356.8 metres depth.
President and CEO of Tinka, Dr. Graham Carman, stated: “These initial drill results are a great start to the 2020 drill program. Hole A20-170 intersected a better than expected zone of high grade zinc mineralization at South Ayawilca, with additional mineralization to be reported from deeper in the hole once results are received from the lab. Importantly, this hole hit high grade silver-zinc-lead mineralization as well as massive pyrrhotite at shallower than usual depths, suggesting that replacement of limestone by sulphides is much thicker in this area than previously recognized. Additional holes are planned to further drill test this high grade area, as well as the large gap between West and South.”
Summary
Covid-19 definitely had an impact on Tinka's drilling schedule for 2020. The campaign which typically is initiated in mid-spring (April) was pushed back to late September 2020. Results of this year's twenty holes drill program have been very positive with high grades of Zinc and Silver in the two holes (A20-170, A20-169) reported to date.
Therefore, it's very much early days in a program that can be material in providing a positive updated PEA. While it is expected that drilling will end in February 2021, the reporting of outstanding drill holes will likely exceed this period.
As a reminder, Tinka delivered PEA (Preliminary Economic Assessment) in July 2019 with a base case of US$1.20/lb zinc, US$18/oz silver, and US$0.95/lb lead. Back then (July 30, 2019), Industrial Alliance set a price target of $0.90 cents.
The last six months have seen a significant increase in the Zinc Spot price with a flat lining of the stock level. Indeed, the US$1.20/lb zinc threshold per TK.V's 2019 PEA has recently been surpassed (early November).
In addition, Silver prices have exceeded the $18/0z threshold for months while Lead is approaching the $0.95 cents.
Unfortunately, the increase in metals value, along with drill results, continues not to be reflected in the stock price. In fact, TK.V has still not consistently traded above the investment levels of Buenaventura; BVN ($0.245 cents). Why?
It's (ironically) perhaps related to the last nine months overall market performance across equities. Another factor to consider is the time needed for pre-pandemic economic activities to resume. The Covid-19 vaccine is still in the early days of a massive roll-out. Assuming it all goes well, there is still at least six months of ramping up which is needed.
Hence, valuation continues (and might be for a while) not to be representative of metal prices and its progress to date.
DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.
