Here's why the New Century Resources (ASX:NCZ) share price has rocketed 12% today

The New Century Resources share price is rising rapidly today after the company revealed the benchmark treatment charge for zinc concentrate.

| More on:
investor looking excited at rising fortescue share price on laptop

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The New Century Resources Ltd (ASX: NCZ) share price is rising rapidly today after the company revealed the benchmark treatment charge for zinc concentrate has been significantly lowered this year.

The New Century Resources share price is up 12.12% to 18.5 cents per share today.

New Century Resources Ltd is an Australian-based mineral exploration and development company spread across Australia and the United States of America. Its assets include the Kodiak Coking Coal Project and Century Mine project. 

New Century Resources zinc pricing

The New Century Resources share price is jumping on news that the company will benefit from a lowered 2021 zinc concentrate benchmark treatment charge at US$159/t. 

The current price is a 47% reduction from the 2020 benchmark of US$299.75/t and New Century Resources says the reduction will "provide significant economic tailwinds for the operations in 2021". 

Zinc is used in a huge variety of medical products, in food production, and in the basic materials and rare earth sectors. There is a large amount of current market tightness around zinc, which continues to drive strong price fundamentals.

The pressure on supply is resulting from prolonged coronavirus related supply interruptions against strong metal demand in China.

What is the zinc benchmark?

The zinc concentrate benchmark is a base-level price on the mineral that's negotiated annually between industry heavyweights Teck Resources Limited and Korea Zinc Co. Ltd.

It traditionally forms the basis for the pricing of zinc concentrate smelting contracts between other miners and smelters globally. In 2021, approximately 85% of New Resource Century zinc concentrate shipments are anticipated to occur against contracts linked to the annual benchmark TC of US$159/t.

The reduction in the benchmark has significant positive economic implications for New Century. The benchmark represents the largest overall business cost, at approximately 30% of outgoing expenditure.

The 2021 benchmark price is retrospectively applied from 1st January 2021, resulting in New Century receiving back-payment for shipments issued at higher prices during 2021.

New Century Resources share price snapshot

The New Century Resources share price has been on a wild ride over the past 12 months.

From a value of 17 cents per share in April 2020, it rose to 24 cents by May 19, fell to 11 cents by September, rose to 26 cents by January 2021 and is now at 18 cents.

These fluctuations represent a 23% overall gain over the past 12 months, but that's 20% down against the basic materials sector.

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

Female worker sitting desk with head in hand and looking fed up
Resources Shares

What does the $100 billion blow for mining exports mean for these ASX 200 stocks?

Are these mining shares worth snapping up at a discount?

Read more »

a female miner looks straight ahead at the camera wearing a hard hat, protective goggles and a high visibility vest standing in from of a mine site and looking seriously with direct eye contact.
Resources Shares

Could Rio Tinto shares be a gold mine in 2025?

Let’s unearth whether this ASX mining share is an opportunity.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

BHP shares rise amid positive class action news

Here’s the latest from BHP on its huge legal case.

Read more »

A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.
Resources Shares

The under-the-radar metal trading at record prices (and 4 ASX mining shares exposed to it)

Which ASX miners have exposure to this soaring, under-the-radar metal?

Read more »

Miner looking at a tablet.
Resources Shares

Why is the Mineral Resources share price racing ahead of the benchmark on Wednesday?

Here’s what’s happening.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Should you buy the 28% dip on Newmont shares?

Is this sell-off a golden opportunity?

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

3 ASX mining shares just upgraded by brokers (one with 60% upside!)

Here are 3 ASX mining shares that brokers are backing for growth in an uncertain climate.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Resources Shares

Is the BHP share price a buy? Here's my view

Is it time to dig into this beaten-up miner?

Read more »