New Century Resources is anticipating a rise in zinc prices due to an increase in global demand as governments boost infrastructure projects to drive their economic recovery plans.
New Century managing director Patrick Walta said that further demand was on the way, after the company announced it had delivered 500,000 tonnes of zinc concentrate since the restart of its Century zinc mine in Queensland in late 2018.
“The milestone of producing 500,000 tonnes of zinc concentrate is a significant achievement for the company and testament to the efforts of our team on site, as well as our strong culture and partnerships with stakeholders throughout the region,” Walta said.
New Century has also secured a zinc price hedging program, which includes a guaranteed floor price in contracts of $US1.20 ($1.56) per pound of zinc for all its sales in the March 2021 quarter and 50 per cent of its sales in the June 2021 quarter.
According to Walta, this will allow New Century to take advantage of current market conditions.
“New Century’s hedging program has successfully locked in the current buoyant market conditions for the remainder of the financial year, while also providing full exposure to further zinc price improvement,” he said.
“The company sees strong potential for zinc price upside, given the continued demand from growth within China and the likely near-term improved demand around the world as infrastructure-focussed government stimulus packages are rolled out.
“This demand is in contrast to continued global supply challenges, with traditional underground miners facing additional operational difficulties in improving production while also implementing social distancing and COVID-19 mitigation practices.”
New Century stated it would continue to seek zinc price hedging opportunities in the 2021 financial year and beyond.