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Buy on mystery, sell on history. So the old trader’s wisdom goes...

On the face of it Emerita Resources’s future may seem a mystery, to some. But the drama around the company’s massive zinc acquisition, still playing out before the Spanish courts, tells a tale of opportunity that should fascinate any savvy investor.

The acquisition of the famed Los Frailes zinc mine in Aznalcóllar, spanning two decades, including nearly four years of an allegedly corrupt tender process, accusations of bribery and influence peddling, investigations, criminal charges, and courthouse revelations that appear to have left EMO as the sole bidder for the prized property. The Los Frailes has an estimated 80m tonnes of extractable ore, containing copper, zinc and lead. The deposit remains open for further expansion by drilling at depth.

The market though, in a bit of a “show me” mood, appears to have over-reacted again, this time in fear, and discounted EMO’s potential ownership of this huge zinc mine to virtually nothing.

So it could be that investors who are willing to step up to the plate now are about to get one of the world’s most prolific sources of zinc for next to nothing. Moreover, EMO has diversified holdings that should give buyers at current share price levels a good measure of comfort—an insurance policy, of sorts. But let’s not get ahead of ourselves.

To understand this story we need to flip through the back pages some 20 years, to a mining disaster that rattled the entire EU and resulted in the moth-balling of a very profitable zinc mine.

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