The last thing most investors would want to hear or read about is another minerals discovery, especially in those highly unwanted metals, zinc and nickel.
Or news that a leading nickel miner had boosted output in the latest quarter.But that’s what we got yesterday.
Due to the global economic slump the world is awash with too much of too many resources and commodities and the situation will remain that way for at least the next 12 to 24 months.
In fact later today we will see just how the oversupply of commodities has impacted the world’s largest miner when BHP Billiton reveals its December quarter and half production figures, and hopefully some commentary on how it sees the outlook and what it will be doing to accommodate itself to the recession.
There might be a speck of good news for some of the nickel hopefuls, like a couple of our reports yesterday, if BHP closes or curtails nickel output, especially from the Ravensthorpe Mine and from the associated metal processing facilities near Townsville in north Queensland.
The likes of Vale of Brazil and Xstrata have cut nickel metal production and trimmed output from their mines and plants in Canada, Indonesia and China.
But interesting as yesterday’s statements were, there’s an element of ‘so what’ about them. In better times they would have produced some interest, especially from day traders and other investors who punt in the small miners. But now….?
An announcement from Overland Resources (OVR) was headlined "SPECTACULAR HIGH GRADE DRILLING RESULTS – DISCOVERY OF NEW DARCY ZINC DEPOSIT".
The shares remained on 10c for most of the day before investors noticed the announcement and chased the stock, pushing it up 35% (or 3.5c) to 13.5 cents.
But there does seem to be something there in the wilds of Canada’s Yukon.
"The Company is very pleased to announce the discovery of the Darcy Zinc Deposit following the return of exceptional analytical results from diamond holes drilled to test for the continuation of mineralisation at the formerly named ‘Darcy Zone’, located 600m south east of the Andrew Zinc Deposit.
"These results confirm the presence of extensive high grade, near surface mineralisation in a new deposit – the Darcy Zinc Deposit."
And some intersections are rich: 77 metres of 11% zinc, 34 metres of 12.8% zinc and so on. Not to be sneezed at, but its one for the future given the depressed state of the zinc market.
Overland said that the Darcy deposit remains open along strike in both directions and further drilling is required to fully define its size.
The company said that the discovery supports its view that the potential exists to establish satellite mining operations to provide additional feed to any processing facilities at the defined Andrew deposit.
Overland said it is continuing to advance the Yukon project towards permitting and production.
"The Company views these results as particularly encouraging as they indicate that additional deposits of economic mineralisation may well occur elsewhere within this underexplored 2,500 meter long anomalous corridor.
Potential also exists to make additional discoveries elsewhere at the Yukon Base Metal Project with continued exploration," the company told the SAX.
And it’s those sorts of announcements at times like this which nicely illustrate the difficulties of junior miners: good, interesting prospects in metals nobody wants.
