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 and June 2019.
July 2 - Reports Positive Pea For The Ayawilca Zinc Project. Highlights: 1) After-Tax NPV8% of US$363M and IRR of 27% using metal prices of US$1.20/lb zinc, US$18/oz silver, and US$0.95/lb lead on a 100% equity basis; 2) Initial Capex of US$262M; 3) 21-year mine life with average head grades of 6.05% zinc, 18.3 g/t silver, 67.1 g/t indium, and 0.25% lead; 4) Average annual production of approximately 101,000 tonnes of zinc recovered in concentrate and approximately 906,000 ounces of silver in a silver-lead concentrate; 5) Numerous opportunities identified for potential economic improvement & exploration upside.
July 29 - Drills 20 Metres at 15% Zinc And 10 Metres at 17% Zinc.
Aug. 15 - Filing Of Ni 43-101 Technical Report For The Pea On The Ayawilca Property, Peru.
Sep. 5 - Drills 5.7 Metres at 32.6% Zinc at Ayawilca. Hole A19-163 intercepted two intervals of high grade zinc mineralization close to the margin of the current inferred resource. The hole intersected one of the highest grade intervals ever drilled at South Ayawilca. In addition, a new style of silver-rich mineralization with disseminated zinc - lead was intersected deeper in hole A19-163 within a down-faulted limestone more than 100 metres beneath the current resource, with mineralization remaining open to the west and at depth.
Oct. 8 - Intersects Exceptional Zinc Grades and Expands Silver Zone Discovery. This new "Silver Zone" discovery supports the view that Ayawilca still has significant exploration potential, including upside for precious metals.
Hole A19-165 has returned some of the best zinc intersections ever drilled at South Ayawilca, both from within and immediately outside of the zinc resource boundary. Hole A19-167, a recently completed and deepened 2017 drill hole, intersected very high grade silver mineralization (>1,000 g/t Ag) accompanied by base metals (14.5% Zn, 0.3% Pb).
Nov. 25 - Drills 26 Metres Grading 10% Zinc at Ayawilca and Receives Approval of Drill Permit for 2020-2021 Programs. Pleased to announce that it has received final approval of its modified semi-detailed Environmental Impact Assessment ('EIAsd' or 'the Permit') for the Ayawilca project from the Peruvian Ministry of Energy and Mines.
The approved EIAsd modification allows Tinka to drill from a large number of drill platforms (up to 240 platforms) within the existing permitted work area at Ayawilca consisting of approximately 300 hectares, within the next 2-3 years.
This Permit enables to carry out all of the drilling activities needed to advance the project.
Dec. 19 - Announces Strategic Investment by Buenaventura - Buenaventura is a precious and base metals mining and exploration-development company with numerous mining operations in Peru, listed on the New York Stock Exchange and Lima Stock Exchange (NYSE: BVN & BVL: BUENAV).
Under the terms of the Agreement, Buenaventura will subscribe for 65,843,620 common shares of Tinka at a price of C$0.243 per Common Share for gross proceeds to Tinka of C$16 million. Buenaventura will become a new insider of Tinka holding approximately 19.9% of the outstanding common shares on a non-diluted basis, subject to the exercise of pre-existing pre-emptive rights. The long-term nature of this strategic relationship is demonstrated by Buenaventura agreeing to a 24-month equity lock-up on the Common Shares, as well as to certain customary standstill provisions.
The net proceeds will be used for development of the Ayawilca Project, further exploration, and for working capital and general corporate purposes.
Jan. 13 - Announces Closing of C$18.5M Private Placement. Closing of the strategic private placement financing announced on December 19, 2019. The Company has issued 65,843,620 common shares to Buenaventura at a price of C$0.243 per Common Share for gross proceeds to Tinka of C$16 million
Sentient IV subscribed for 10,288,066 Common Shares in the Private Placement at the Issue Price for additional gross proceeds to Tinka of C$2.5 million. Pursuant to the closing of the Private Placement, Sentient IV holds an aggregate of 74,036,831 common shares of Tinka or approximately 21.7% of the Company’s outstanding common shares.
Jan. 16 - Sentient Global Resources Fund IV, L.P. Acquires Securities of Tinka Resources Limited.
Jan. 24 - Announces Grant of Stock Options. Directors, officers, and consultants to purchase an aggregate of 6,450,000 common shares of the Company at an exercise price of $0.25 per Optioned Share for a period of five years.
Summary
Even before the past month, TK.V's valuation was already under-pressure. The delivered PEA (Preliminary Economic Assessment) last July had a base case of US$1.20/lb zinc, US$18/oz silver, and US$0.95/lb lead. Back then (July 30), Industrial Alliance set a price target of $0.90 cents. However, the prolonged US-China trade dispute and of late the emergence of the Coronavirus has been detrimental to the zinc (spot) prices and consequently on the stock levels.
However, the highlight for the last period has been the investment by Buenaventura; BVN for $18.5M at $0.245 cents.
For perspective, the day previous to the announcement (Dec. 18) TK.V closed at $0.11 cents; on December 19th it closed at $0.16 cents. The day of the closure of the investment (Jan 13, 2020), TK.V closed at 0.165 cents. Last Friday, it closed at $0.11 cents. Even with a major premium from BVN's, TK.V never reached BVN's value ($0.245 cents), surprised?
Although BVN could have purchased TK.V outright, the decision not to do so at the time suggests a belief that there is possibly more upside. By investing now, BVN is potentially de-leveraging a future acquisition. Similar to South32's initial investment in Arizona Mining, BVN investment in TK.V came roughly six months after the PEA.
As such, while current valuation is reflective of the weak fundamentals, it is definitely not representative of the progress made to date. Now with BVN's investment, TK.V has $23M in cash & no debt. Not a typical junior.
As noted above, the TK.V's Ayawilca property is located nearby BVN's Colquijirca and San Gregorio (zinc properties) but also in proximity to Uchucchacua and Yumpaq (silver properties). Both zinc and silver properties are not as numerous as the gold and cooper projects at BVN. Hence, the investment is sensible.
Moreover, On October 8 2019, TK.V reported the discovery of a New Silver Zone ( high grade silver mineralization (>1,000 g/t Ag) accompanied by base metals (14.5% Zn, 0.3% Pb). Ayawilca is not widely known for its silver deposit but future meaningful discoveries might change that. TK.V also highlighted this in their latest investor presentation.
No doubt the outlook for zinc looks grim today, but it's worth speculating that governments around the world will be looking for ways to create growth once this crisis is neutralized. In essence, the likelihood for numerous major infrastructure projects taking place simultaneously globally are strong possible catalysts for zinc prices.
Otherwise, the advancement of Ayawilca's silver zones certainly adds a nice silver lining.
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