By Daniella D’Alimonte – Exclusive to LeadInvestingNews

The spot price of lead had risen over US$0.20 in the last month, currently hovering around US$1.00.
However, the rising production costs and limited power supply is affecting mining output and earnings across China. The quickly approaching Beijing Olympic Games are also putting the squeeze on the country’s lead and zinc production. Transportation regulations, security controls on explosives as well as crackdowns on smaller mines and polluting factories are all playing a role.
“In Xiangxi there are strict controls and most of the private miners have been entirely shut down. It’s not just because of the Olympics, though. The government there is doing a general crackdown and clean up of an unruly sector,” said Zhang Changhai , analyst with metals consultancy Antaike in Beijing, in an interview with Reuters.
China’s second-largest lead miner, Western Mining, has reduced 2008 production estimates from 65,000 tonnes of lead down to 35,300 tonnes. It has also reduced zinc from 70,000 tonnes to 54,300 tonnes. Net profit for the first six months of the year has fallen 16 per cent to US$105.5 million.
Royal Roads Corp. (TSX: RRO) had a 25 per cent or US$0.02 price hike on July 30, bringing it to US$0.10 per share. However, this mineral exploration and development company has remained fairly steady over the last month, hovering around US$0.09 per share. The company recently had a change of directors and officers following the completion of the business combination with Buchans River Ltd.
Toronto-based Kria Resources is expected to purchase two base metal properties from Xstrata Zinc Canada over the next three years. The Halfmile Lake and Stratmat properties, two undeveloped lead and zinc deposits in Bathurst, New Brunswick, will be purchased for about $18.5 million in cash and $7 million in shares.
“There are not many resources in the world with the size and grades that we have in these two properties,” said Mike Hoffman, president and chief executive for Kria, in a recent interview with New Brunswick Business Journal.
Xstrata also plans to phase out its Brunswick Mine by 2010 because of depleted resources. Currently referred to as the largest underground zinc mine in the world, the closure is creating unemployment concerns for the area.
Capstone Mining Corps (TSX: CS) recently released Q2 results claimed record high revenues of $35.3 million as well as record operating profit of US$19 million or US$0.23 cents per share. The average realized price of copper, zinc, lead and silver sales in the quarter was US$3.80 per pound, US$0.91 per pound, US$1.00 per pound and US$8.40 per ounce, respectively. During this period at its Cozamin mine in Mexico, 1.5 million pounds of lead was produced. This sold at an average price of US$1.00, producing US$1.7 million in revenue.
Eagle Plains Resources Ltd. (TSX: EPL) and option partner Blind Creek Resources Ltd. announced plans to start a drilling programs at their Blende property in the Yukon. With a US$700,000 budget and 1,200 metres of drilling plans, Eagle Plains and Blind Creek have released resource estimates including 38,700,000 ounces of silver, 1,300,000,000 pounds of zinc and 1,200,000,000 pounds of lead.
BHP Billiton has announced a new silver and lead drilling program set to begin in October on its Maronan property. BHP aims to create a resource for the next 12 months, it said in its recent Q2 report. The company also plans to explore at least two targets on its separate McKinlay joint venture
before the end of the year.
Due to a fatal accident, operations have been suspended at BHP’s Klipspruit Colliery mine in South Africa. An investigation is being conducted by the company as well as relevant government authorities regarding the death of Petrus Sipho Kgobo, a drill groundsman.

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