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Miner Releases Resource for Arizona Zinc-Lead-Silver Deposit
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A BMO Capital Markets report gave the new figures for tons and grades and compared them to ones in a prior estimate.

In a June 17 research note, BMO Capital Markets analyst Edward Sterck reported that South32 Ltd. (S32:ASX; S32:LSE) published a mineral resource for its Taylor deposit in Arizona.

Sterck noted the new JORC compliant resource is generally similar to the NI 43-101 compliant one completed by Arizona Mining, the previous property owner, in January 2018, but with three differences, which he specified.

One is that the new resource encompasses more tons, 155 million tons (155 Mt) versus 145 Mt.

Secondly, grades in the new resource are lower across the board. When comparing South32 and Arizona Mining's resources, grades, respectively, averaged 3.39% versus 4.1% zinc, 3.67% versus 4.4% lead and 69 grams per ton (69 g/t) versus 78 g/t silver.

Finally, the new resource reflects a 10% reduction in contained metal on a zinc equivalent basis when compared to Arizona Mining's resource, despite the same cutoff grade of about 4%.

Sterck indicated that the prefeasibility study for Taylor is still expected before June 2020.

In other news, noted Sterck, South32 also released an updated resource estimate for its Illawarra met coal project. Resources there have dropped to 22 Mt from 114 Mt because the company "relinquished a portion of the license area."

BMO has a Market Perform rating on South32.


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Disclosures from BMO Capital Markets, South32, June 17, 2019


Analyst's Certification
I, Edward Sterck, hereby certify that the views expressed in this report accurately reflect our personal views about the subject securities or issuers. I also certify that no part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.

Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Company Specific Disclosures
Disclosure 9C: BMO Capital Markets makes a market in South32 in Europe.

For Important Disclosures on the stocks discussed in this report, please click here.

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