This article is a sponsored feature from Mining.com.au partner Tinka Resources Limited. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Tinka Resources (TSX-V:TK) says the 16,800-hectare Ayawilca Project is one of the largest undeveloped zinc resources in the Americas.
The company has announced that it will undertake a strategic review process, with the assistance of an advisor, to identify and evaluate a broad range of potential strategic alternatives to advance its high-quality zinc asset in Peru.
Tinka’s key asset, the Ayawilca Project, is located in the Andes of central Peru, just 130km from the Pacific coast and a new port facility at Chancay.
Ayawilca is a skarn/carbonate replacement deposit formed via a similar process to porphyry deposits. Skarns are important sources of economically valuable copper, zinc, silver, lead, tin, gold, molybdenum and iron.
The largest skarn deposit in the world, Antamina in Peru, is one of the world’s most profitable copper-zinc mines — owned by BHP (ASX:BHP), Glencore (LSE:GLEN) and Teck (NYSE:TECK) — due to its size and high grade. It is a prime example of just how fertile and large skarn systems can be. Antamina produces various metals including copper, zinc, silver and molybdenum.
CEO Dr Graham Carman says, “base metal projects of the quality of Ayawilca don’t grow on trees!”
“Peru has some of the largest skarn and carbonate replacement deposits in the world,” Carman notes.
“The world-class mines of Antamina and MMG’s Las Bambas have huge reserves of copper, zinc and precious metals and are dominated by skarn mineralisation. The prevalence of large skarns in Peru is due to the abundance of thick limestones and the fertile magmas which have intruded them.”
The potential of Tinka’s Ayawilca Project has attracted the backing of one of Peru’s largest mining companies, Compañia de Minas Buenaventura (NYSE:BVN), as well as a top-five global zinc producer, Nexa Resources (NYSE:NEXA).
Carman tells Mining.com.au there is “huge exploration upside” at the project, a fact recognised by Buenaventura and Nexa, which each own a 19.9% stake in Tinka and have mining operations within 40km of Ayawilca.
Both Buenaventura and Nexa increased their stakes in Tinka late last year by participating in a C$1.7 million ($1.9 million) non-brokered private placement.
Buenaventura and Nexa between them own and operate five mines and one zinc refinery in central Peru.
The Ayawilca Project sits around 250km from Lima, where the Callao Port and Nexa’s Cajamarquilla refinery are located.
The Cajamarquilla zinc refinery is a potential source for Ayawilca zinc concentrates.
Discovered by Tinka in 2013, Ayawilca has been subject to 95,000m of drilling so far which has defined a large footprint and resource base.
It is a “blind” deposit occurring between 80m and 450m from the surface.
The 2022-2023 drilling campaign returned top hits like 38.9m @ 20% zinc including 10.4m @ 42% zinc, and 145m @ 10.9% zinc including 29.3m @ 20.2% zinc in the South area.
From the West area, Tinka reported results of 44.9m @ 12% zinc including 16.1m @ 22.2% zinc, and 97.9m @ 8.8% zinc including 35.8m @ 19% zinc.
“We believe that we can replicate our exploration successes at South and West Ayawilca – the highest grade parts of the Ayawilca zinc deposit incorporating all of the indicated mineral resources – with resource expansion drilling at East Ayawilca, where the existing zinc resource is wide open,” Carman says.
“Meanwhile, the tin mineralisation underlying the zinc at Ayawilca is open along strike and untested at depth.
“Tinka also has high-grade outcropping copper-gold skarn targets that have never been drilled just 20km away at the Silvia project.”
The Zinc Zone at Ayawilca so far hosts indicated resources totalling 28.3 million tonnes @ 5.82% zinc, 16.4 grams per tonne silver, 0.2% lead and 91g/t indium reported in underground mining shapes.
The Zinc Zone also has an inferred resource of 31.2 million tonnes @ 4.21% zinc, 14.5g/t silver, 0.2% lead and 45g/t indium.
The Silver Zone has an inferred resource of 1 million tonnes @ 111.4g/t silver, 1.54% zinc and 0.5% lead.
The Tin Zone, which lies beneath the zinc mineralisation, has an indicated resource of 1.4 million tonnes @ 0.72% tin and an inferred Resource of 12.7 million tonnes @ 0.76% tin. Tin is hosted by cassiterite, the favourable tin mineral for eventual recovery and concentration.
Tinka believes it has only drilled into the very top of the tin system at Ayawilca, as several drill holes ended still in mineralisation, with much more tin potentially lying underneath.
The company says the robust resource figures, coupled with strong financial metrics outlined in a 2024 Preliminary Economic Assessment (PEA), underscore the project’s potential to become a major player in the production of zinc, silver and tin.
The PEA estimates that the Ayawilca underground mine will be capable of processing 2 million tonnes of zinc, silver and lead and 300,000 tonnes of tin each year via two separate circuits.
This would give the operation a net present value of US$434 million and an internal rate of return of 25.9% after tax, producing zinc for 21 years and tin for 15 years.
The revenue breakdown would be 82% zinc, 11% tin and 7% silver and lead.
During the second half of 2024, Tinka undertook a detailed geological review of the mineralisation at Ayawilca, factoring in the key findings from the 2022-2023 drill program.
Carman says the greater understanding of the mineralisation at Ayawilca and a reinterpretation of the geological controls on the deposit has led to an updated resource model and points to additional potential.
“On the exploration front, we are confident there remains considerable upside at Ayawilca over and above that demonstrated in the 2024 PEA,” he says.
“Several priority exploration opportunities have been identified with significant potential to improve the economics of the deposit as we progress the project.
“Outside of Ayawilca, we will also be looking to advance the highly prospective Silvia NW copper-gold target, which we expect to be fully drill permitted by mid 2025.”
Previous exploration at Silvia NW returned surface trench samples including 1m @ 12.3% copper and 18.6g/t gold. Tinka acquired the project from BHP in 2021 in exchange for a 1% royalty on future production.
Silvia NW is a copper-gold exploration target with skarn outcrops that extend discontinuously over 4km strike.
Meanwhile, the Silvia South target previously returned rock chip samples grading up to 7.5% copper and 0.7g/t gold.
The strategic review is expected to be completed during Q2 2025.
Write to Angela East at Mining.com.au
Images: Tinka Resources
