In the absence of any new news, here's my notes from the recent...

In the absence of any new news, here's my notes from the recent AGM.

Any mistakes are mine, I can be a bit deaf.....

Alta Zinc (Shares:1.4bn, Mkt Cap @ 0.5c is $6.8m, cash $1.7m)

Seven projects, four in Italy, three in Australia:

Gorno Zinc/Lead/Silver Project: The company maker andcurrent focus

Punta Corna – Cobalt project Northern Italy.  “Could be a company maker in its own right “(but early stage). Worth watching

Salafossa/Predil – early stage smaller projects

Paterson Province WA – small holding in sexy area (RIO bigunannounced copper find, pegging rush). AZI has been approached to farm thisout. Whilst small (250 sq km), there is outcropping and previous drilling onthe tenement. Worth watching

McArthur River / Nyang Uranium – No activity

Gorno Project

Gorno has a 2,500 mining history dating back to pre-romanceltic days. It has 240km of underground tunnels, a lot of drilling history andmultiple high-grade ore-bodies remain to be exploited from the currentinfrastructure.

Recent ASX rule changes to the way juniors report JORCmineral classifications do not allow AZI to report mineral resources based onhistoric (pre-2012) drilling unless twinned with a new drill hole. This makesit very difficult for AZI to communicate its prospectivity with shareholders,but not with other sources of potential finance. Whilst frustrating, it is ofless concern in the context of a strategy of no further share-holder dilution.

Due to a recent dip in zinc prices, a number of smeltersaround Europe are getting concerned about ore availability. The quality ofGorno ore is well known to these smelters from previous mining and Due Diligenceon the project. Gorno ore is uniquelyhigh grade and low impurity and evidently very sought after. This point wasrepeated frequently during the presentation.

The Smorgon Family Trust have interests in smelter(s) nearto Gorno (Sardinia and a closer one 15km away?). Smorgon took a $1.7m chunk ofAZI in the last raising at 1.2c. It is evidently the first direct investment ina developer they have taken. They put a director (from Arete Capital) on theBoard and they have the facility to add another director if their holding risesto 20% of the company. Glencore also owns and operates nearby smelters. Smorgonclearly have a vested interest in securing ore supplies to feed their smelters.Recent low zinc prices have resulted in less exploration/development, additionallyenhancing the attractiveness of near-production assets such as Gorno to thesmelters.

The Gorno project is working towards production on theinitial Zorzone deposit (3mt of ore for $650m value of in-ground metal) withmultiple bolt-on projects at minimal additional capital cost. There are atleast three further advanced exploration projects ready to go after Zorzone, eachadding similar (or better) size and grade ore bodies to the project (based onpre-2012 drilling, so no ASX JORC). The expanded Gorno project could have aresource of $2bn worth of metal within a year (by my calculations).

 AZI hope to have aDefinitive Feasibility Study finished on the expanded Zorno project by the endof next year. One would expect this to be a big event for the company. [Typicalmarket caps for pre-development projects of this size are $40-$100m (?)]

Funding is the big issue. Alexander Burns is adamant therewill be no further dilution. As an aside, he said himself, his friends andrelatives were in at over 2.5c and it was “his life’s work” to get a return onthis investment.

I asked one of the other directors (Stephen Hills) if therewould actually be a mine at Gorno, he replied “definitely”. If this is can bedone without undue dilution of shares, then it will be immensely profitable forholders at this level.

Again an off-hand comment from Alexander Burns, “The projectlooks better than it ever has”, ironic given two-year share price collapse. [AZIis priced like an early stage explorer and probably has zero value assigned toGorno, it would be worth these prices on the basis of its other projects].

 The question oftimetable came up often. The original mining timetable had them in productionby 2020. It is now expected to be more like 2021.

There was a lot of 3-d mapping of ore-bodies at thepresentation, which causes the average audience to glaze over (I know I did!).I liked this in a way. They didn’t “talk-up” the company. Most of the bullishstatements above are my interpretations from the facts they gave.

The PFS is imminent. I suspect they already have it. But Idon’t think the market will shine to it. The biggest catalyst will be From Burnsie(to his mates) running around all his contacts in Zurich and London securingfinancial backing, or a “big brother contributor” as he termed it.

So perhaps not a one-month play but almost certainly aone-year play, and how much cheaper can it really go……. 

There was a lot more, but it was technical. These were themain value drivers