Full Metal Zinc (ZN:TSXV) 1 Day Chart (Yahoo Finance)

Full Metal Zinc (ZN:TSXV) 1 Day Chart (Yahoo Finance)

McLeod-Williams zinc play, Full Metal Zinc (FZ:TSXV) announced that it intends to acquire the San Andres Silver Project in Durango, Mexico.  The project is brownfields and comes with a 300tpd mill and tailings facility, supposedly costing $6 million.  From 1890 to 1915, the property is said to have produced some 17 million ounces of silver.  Full Metal will pay $260,000 cash, 10 million shares and a 2% NSR on the project (which the company can buy back half of for $5 million).  With less than $300,000 in cash today, the company needs to raise money to complete the acquisition and is planning a $1 million financing (20 million units at $0.05).

The market seems not to care about the 30 million new shares being issued at a discount and is trading up 75% at the time of writing on 2.5 million shares.  Perhaps some of the excitement is due to the fact it is located just 8km east of Chesapeake Gold’s enormous Metates deposit (18.5 million ounces of gold, 526 million ounces of silver, 4.2 billion pounds of zinc).

News Release: Full Metal Zinc Signs Binding Letter to Acquire the San Andres Project and Mill