Metalline Mining Company

A Junior Developing a large Zinc, Silver, Copper, and Lead Deposit in Mexico

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Metalline is advancing its Sierra Mojada project located in Mexico towards production. The large 6+ billion lb. zinc and 150+ million ounce silver resource continues to expand, with an updated resource expected in late 2010 and the commencement of a preliminary economic assessment in early 2011. Currently the company is aggressively exploring outside of the more well-defined zinc orebody having just added a 7th drill rig to the project, with plans to drill over 44,000m in 2010. [David Zurbuchen] [June 4, 2010]

Metalline claims a land package covering an area of over 47,000 acres, on which are contained over 45 past-producing silver and lead mines. The company's 6+ billion lb. zinc and 150+ million ounce silver resource is likely understated, and has the potential to grow significantly once feasibility drilling is finally completed. We'll have to wait until the end of 2010 for a comprehensive resource update.

We're told that the company has full support of the local community, and the property has easy access to power, roads, rail, and a significant amount of infrastructure. Given the similarities with the ultra-low-cost Skorpion Mine in Nambia bought out by Anglo-American in 1999, and currently producing about 180,000 tonnes (397 million lbs) of zinc per year at a cost of about $0.30/lb, Metalline appears undervalued. However, the company's sense of urgency is completely lacking, having yet to publish any economic study on the project despite several years of promises to that effect. We're now told that a preliminary economic assessment is scheduled to begin in early 2011, so investors may still have another year to wait before any concrete answers about the project's economics are published.

Despite our negative feelings towards the highly dilutive merger with Dome Ventures completed in April 2010, there is no denying that the company possesses a significant zinc-silver deposit. Unfortunately the company moves at a snails pace, and we believe this is largely the fault of management. Hopefully the people brought in from Dome Ventures will be able to revitalize the company and better manage investor relations going forward. [David Zurbuchen] [June 4, 2010]