News & Analysis

Minco PLC (MIO: AIM) review and analysis

By PSQ Analytics

Minco PLC (Minco) is a metals exploration & development company incorporated in Ireland with zinc exploration projects in Ireland and zinc-silver investments in Mexico. The company is primarily focused on its Pallas Green project in Ireland, and is involved in zinc-silver development projects, Bilbao and Laguna, and gold exploration at Pinos, all in Mexico, through Toronto exchange listed Xtierra Inc. (Xtierra), a 60% subsidiary.

– Pallas Green project: Located on the southern boundary of the Irish Midland Orefield between Limerick and Tipperary, the Pallas Green zinc-lead project is a joint venture between Minco (23.6% stake) and Xstrata Zinc (76.4% stake). Minco has identified four distinct lenses of massive zinc-lead sulphide mineralization at Castlegarde, Srahane West, Caherconlish and Tobermalug. The company estimates that the Caherconlish and Tobermalug sites currently have the potential for resources of 16.2 Mt at an average grade of 10.0% zinc and 1.7% lead. During 1H 09, a JORC compliant Inferred resource estimate of 11.3 Mt grading 10.2% zinc and 1.9% lead was released for the Tobermalug deposit. Minco estimates that 60% of the Pallas Green license area remains unexplored, reflecting tremendous potential for an increase in resources. The project underwent a preliminary scoping study and drilling in 2009 after an extensive drilling program in 2008. Minco aims to increase the resource size at the project, with a USD10 mn drilling program in 2010.

– Bilbao Project: This zinc-silver project, located in Zacatecas (Mexico) is spread over 1,407 ha and comprises 9 concessions. In February 2010, Xtierra released a NI 43-101 compliant Indicated resource estimate of 9.68 mn tonnes grading 2.09% lead, 0.21% copper, 2.43% zinc and 59.4g/t silver (representing a 169% increase from the 2008 resource estimate) and an inferred resource estimate of 4.04 mn tonnes grading 1.55% lead, 0.18% copper, 1.43% zinc and 53.64g/t silver (an increase of 68% on the 2008 estimate). The ongoing feasibility study is expected to be completed in 3Q 10.

– La Laguna Pedernalillo (Laguna) Tailings Project: This is a silver-gold-mercury tailings reprocessing project for which a bankable feasibility study was completed in 2006 by Micon International Ltd (Micon). Thereafter, Micon determined a revised reserve estimate of 6.8 Mt in the Proven and Probable category grading 57.92 g/t silver, 0.31 g/t gold and 328.92 g/t mercury in 2008. On 19 November 2009, it was announced that Xtierra had entered an Option and Sale Agreement for the deposit.

Key recent news

11 February 2010: Announcement of an increased independent NI 43-101 compliant resource estimate for the Bilbao deposit, with Indicated resources now at 9.68 mn tonnes and Inferred resources at 4.04 mn tonnes.

02 February 2010: Minco announced its USD10 mn exploration programme for 2010 at the Pallas Green Project.

20 January 2010: Xtierra announced a non-brokered private placement of up to CAD5,000,000 to fund further metallurgical testing and feasibility work on the Bilbao project.