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Thursday, May 11, 2017 Derek Macpherson

RCKS Drilling Deeper Lunch; Focus on Zinc


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Yesterday, Red Cloud Klondike Strike Inc. (RCKS) hosted another installment of our Drilling Deeper Lunch series, this time featuring three zinc companies, a producer, a developer, and an explorer. The presenting companies were Tinka Resources Ltd. (TSXV:TK), Ascendant Resources Inc. (TSXV:ASND) and Aquila Resources Inc. (TSX:AQA). We believe all three presenters are well positioned to take advantage of the strong fundamentals we see for zinc.


Tinka Resources Ltd. (TSXV:TK) is an exploration company focused on expanding resources at its 100% owned Ayawilca project in Peru. The company began a 10,000m drill program in February, intersecting meaningful grades and widths, 400m south of the existing resource. In April, Hole A17-56 intersected 10.1% Zn over 51.90m, followed by high-grade results at narrower widths further extending the area at South Ayawilca in May. In addition, new permits allow for 3 years of drilling, the current step-out program is expected to continue to at least July and is fully funded. The next steps for the company will depend on further results from the current program, which will then determine additional drilling and possibly a PEA.

Ascendant Resources Inc. (TSXV:ASND) wholly owns the producing El Mochito zinc, silver and lead mine in Honduras. The company acquired the mine from Nyrstar NV in December 2016, and since then has been focused on optimizing mining operations, lowering costs and exploration opportunities on its 11,000-ha property. Ascendant is guiding 2,200 tpd by the end of 2017, starting Q2 strong with 1,960 tpd in April, an early indication the company is likely to meet expectations. In addition, a new collective bargaining agreement was settled with union leadership and has been ratified by the Minister of Labour of Honduras, which should provide medium-term labour stability.

Aquila Resources Inc. (TSX:AQA) is focused on developing its Back Forty zinc and gold VMS deposit in Michigan. The company has obtained 3 of 4 permits required to undertake construction of the planned open pit mine, the last being for the Wetlands Protection Permit issued by the state. A Feasibility Study for the open pit mine is underway, and is expected to be completed in H2 2017. After construction, the transition into underground mining is being evaluated as a possible amendment, including a PFS specifically for the underground mine. Initial results from the 4,600 infill and step-out winter drill program are anticipated for May, the company expects to continue exploration and test satellite targets.

Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate
 
Red Cloud Klondike Strike Inc.
105 King Street East, 2nd Floor
Toronto ON, M5C 1G6
RCKSTalk@RedCloudKS.com

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All values in USD unless otherwise noted.

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Company Specific Disclosure Details
Tinka Resources Ltd. - TSXV:TK - None
Ascendant Resources Inc. - TSXV:ASND - 2,4
Aquila Resources Inc. - TSX:AQA - None

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