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Acadian Gold, Blue Note, Breakwater Resources: A Trifecta of Zinc Producers

We agree that after the recent runs in uranium, nickel, molybdenum, and copper, zinc is nearing its turn in the spotlight. It's the only base metal that's down in price on the year, yet it has arguably the best fundamentals going forward.

Acadian, Blue Note, and Breakwater are great producers/near-term producers. Read a lot more about the zinc market and what we believe is the best zinc investment that's a little further from production at our blog.

Despite its small market cap, Metalline Mining has more proven zinc than all 3 of these companies combined, will likely be the lowest-cost producer in the industry (along with Anglo American's Skorpion mine, as both will use a low-cost process on oxide zinc to produce refined zinc, bypassing smelters' huge take), is fully funded through feasibility and for an expanded drill program to prove out their silver deposits, has 100% of their properties, and is now the only zinc junior miner listed on a major U.S. exchange (MMG on Amex). With all their existing infrastructure, which we saw ourselves on our recent site visit (photos on our blog), incredible economics given their world class deposit size and low-cost process (Skorpion went to profitable production at .35/lb zinc), a team that recently did a very similar feasibility study and move to production (Green Team International, doing Metalline's feasibility study, did so at Skorpion), very strong support from the locals (who even pray for success at the mine site each week), and huge upside from their silver (they have 45+ former-producing mine shafts that direct shipped very high-grade silver up to several kg/tonne), Metalline has the lowest risk of having huge success of any miner we know.

Although pre-production juniors who haven't completed a feasibility study yet (Metalline's should be done next year) have more risks than producers and near-term producers, if they are successful moving to production, the upside is enormous, as they are heavily discounted for those risks. We like having some producers/near-term producers, like the ones in this article, for the more conservative part of our portfolio, and great pre-production juniors like Metalline for the more aggressive part of our portfolio. For sizable positions in base metals stocks, we prefer those who have significant precious metals as well, as Acadian Gold and Metalline Mining do. Short-term volatility in pre-production juniors can test an investor's patience, but the longer term upside in quality juniors should reward that patience handsomely.

Technically, MMG looks poised to break out of a triangle pattern that has contained the trading over the last 18 months. As their first zinc project moves toward production and the market begins to recognize their silver potential, MMG should move significantly higher.