Trevali Mining Corp (TV.TO)

Zinc in Peru and New Brunswick. He thinks this is the go-to name in zinc. It is a good name to trade.

Probably the best levered play to zinc you can find right now. A pure play with 2 assets. One in South America and one in New Brunswick. There are not a lot of pure plays in zinc. It is a commodity which probably has the best supply/demand fundamentals. As the steel industry starts to grow, which we are starting to see in China, zinc prices go up.

It is hard for him to go down into smaller companies because of how his own company has grown (Liquidity issue with small companies). The zinc story has been developing for 5 years. If global growth does not fall off a cliff then zinc might get tight. This could be the year. Markets have already started to anticipate this. It is the first pure play in zinc.

A good name if you like zinc, which he does. They have 2 mines. One is in Peru where there are also some other high grade base metals. They have also redeveloped the Caribou mine in New Brunswick. Both mines are going well. If you believe that global growth is starting to accelerate again, base metals typically do well during that period.

He doesn’t follow zinc, but the stock looks great. It is cheap and the volumes are there. It has had a nice run and the volumes are steady. This is the kind of stock where people, who have been playing it in and out, would continue to sell it at $1.40-$1.50 as it has never gotten through that.

(Market Call Minute.) If you own, continue to Hold, but you can Buy on weakness.

(Market Call Minute.) This is interesting. It is levered to zinc, and is one he is looking at. There is a supply deficit in zinc.

Zinc is one of the base metals that has one of the best fundamentals right now. There is not a lot of new supply coming on. There are mines that some of the bigger players have shut down, which have come to the end of their useful life. The commodity is almost getting into a deficit right now. This is one of the better zinc players. It has a mine in South America and one in Eastern Canada. The East Coast mine is just getting up and running now. If you want to play zinc, this is probably the best way right now.

A nice focused zinc play. Base of production started in Peru, and more recently now commercial production in New Brunswick with the Caribou mine. It should be about a 140-million pound producer of zinc in 2017. There is the ability to see that doubled through expansion in Peru and on the Caribou. Zinc fundamentals should tighten up through 2017 due to declining Western mine supply and stable demand. This pick is really about growth as well as improving zinc prices.

A zinc producer so it is kind of in the sweet spot for him in that zinc, year-to-date, has been the best performer. Zinc is currently at $1 now, and he sees upside to $1.20. This company has performed as zinc has started to move, and is the cleanest way to play zinc. They just went commercial on their New Brunswick mine, Caribou, which should lead to a ramp up slowly to 140 million pounds, when cash flow starts to get generated. The biggest question for this company is, what’s next. You can own this for 2-3 years and do quite well.

Their mining operation is fine in a really big bull market for zinc, but the costs aren’t very low. He isn’t a big bull on zinc. Zinc prices have moved up quite a bit, and he thinks it is going to come off.

Zinc has done really well and has been the best performing metal. They’ve closed a bunch of mines, so it seems to have a better supply balance than a lot of other metals.

The largest reason for this doing so poorly is that zinc prices are down about 25% year to date. Although they have a great outlook for growth, they will probably double production in the next year with Caribou starting up, to complement what they have in Peru. Right now the commodity is trading towards breakeven territory on an all-in basis, and not something that attracts the market. An issue overhanging zinc is the Glencore probably putting metal into the market to try and deleverage its balance sheet. Zinc will probably be his favourite commodity going into the latter half of 2016.

This is a real problem with mining companies that go into production. If we could plot this company’s market cap, you could see it going up, but the share price has not done very well. What this means is that they keep issuing and issuing shares to build. They get production, but the problem is that as shareholders, we get no benefit.

This is zinc. Very unique because it is zinc focused. You can’t really find pure zinc players on the globe. Usually it is a secondary product from silver and also has lead usually. Likes this because it is an existing producer. Its 1^st mine is Santander in Peru with 50 million pounds. They just started their 2^nd mine in New Brunswick, which will effectively double their production by the end of 2016. Hopefully they can add to their Caribou. Hope that they can triple their production by 2020. A great target for anybody who wants to increase their zinc exposure.