Zazu Metals Corporation (TSXV:ZAZ) is a Canadian-based exploration company focused on acquiring and developing base metal properties. They hold a 50 percent interest in the Lik Project, a joint venture with Teck Resources Limited. Zazu is the operating partner, and automatically earns an 80 percent interest if expenditure commitments are met by 2018. The Lik property is one of the largest undeveloped zinc deposits in the west and is located in the mining-friendly state of Alaska.
In March 2014, Zazu released a Preliminary Economic Assessment indicating an average annual production of 234,000 dry tonnes of zinc concentrate, capital cost of $352 million, and a 9 year mine life.
- Lik South is expected to be one of the largest and lowest cost producers of zinc concentrate globally according to March 2014 PEA
- Underground extension provides exploration upside
- Excellent available infrastructure within mining-friendly jurisdiction of Alaska
- Close proximity to Teck’s Red Dog Mine—world’s largest zinc deposit
- Strong cash position, few shares outstanding
- Experienced, goal-driven management team
The Lik Project, Alaska, United States
The Lik Project is a stratiform zinc-lead-silver property located 22 km southeast from Teck’s Red Dog zinc mine in northwestern Alaska. Teck has a 50 percent interest in the property and Zazu Metals has the exclusive right to increase its 50 percent holdings to 80 percent.
The property comprises of a single state claim covering 2,225 hectares. Zazu Metals transferred the claims from federal to state level to access the mine development assistance provided by the mining-friendly Alaskan State government.
The Lik property is hosted within the Red Dog plate of the Endicott Mountains, in a similar geologic setting to the Red Dog Mine. At the Lik property, the immediate host rocks are carbonaceous and siliceous black shale, which may lead to easier extraction of zinc-lead-silver at the deposit. The deposit is continuous outside the Lik property onto the adjacent Teck’s property to the south.
Within the Lik property, the deposit is divided into two parts—Lik North deposit and Lik South deposit — by the Main Break Fault. The Lik North and Lik South are two different zones of mineralization on the southern boundary of the property. As presently tested, the LIK South deposit is about 1,100 m long and about 600 m wide. It has been tested down dip to a depth of about 150 m to 200 m. North of the Main Break Fault, the LIK North deposit is about 700 m long and about 350 m wide. It remains open to the north. It has been tested down dip to a depth of about 300 m. Zazu’s claim area extends several kilometers to the north of Lik North. Lik North remains open on strike, providing substantial room in the claim area for extending the deposit.
The following map indicates the resource outline for Lik South and Lik North, and the approximate pit outline for Lik South. Drill hole locations are shown. The diamond drill holes to the north of Lik North also intersected mineralization, and are currently being considered for inclusion in the Lik North indicated resource.
Lik South is near surface and will be mined as an open pit. Lik North is deeper and is amenable to underground mining methods. Lik South would be mined first. A short ramp from the bottom of the pit enables access to Lik North.
In 2011, Zazu Metals began advancing the project toward the feasibility stage. Further exploration drilling tested the northern boundary of the Lik North and identified mineralized intersections of grades and widths consistent with the Lik North deposit. Metallurgical testing looked at refining the process plan and improving silver recovery. The Company also initiated studies focused on hydrology, hydrogeology, air quality, acid rock drainage, corridor routes as well as road and port analysis. Further refinement and analysis of the mine design was also carried out at this time.
The metallurgical testing completed by SGS Minerals Services shows the Lik deposit is capable of producing saleable grade concentrates at similar recovery rates to Teck’s producing Red Dog zinc mine (Red Dog NI 43-101 Filing, March 2007, Figures for 2006).
Zinc is a crucial ingredient in the galvanization of steel to protect against corrosion and is alloyed with copper to create corrosive-resistant brass. Both processes account for more than three-quarters of total global zinc consumption.Tighter supplies and rising demand will translate into higher prices for zinc which is now trading at around $1800/tonne, down significantly from its high of $4300/tonne in December 2006.
In March 2014, JDS Energy and Mining Inc. completed a Preliminary Economic Assessment on Zazu’s Lik Property that specifically considered the open pit potential of the Lik South deposit. The PEA involves the construction of a 5,500 tonne-per-day mill that will produce both a zinc and a lead concentrate using on-site crushing/grinding and sequential flotation methods. Results of the assessment indicated the Lik South deposit will be one of the largest and lowest cost zinc concentrate producers in the world.
Zazu Metals is an exploration company focused on developing the zinc-lead-silver Lik Project, which contains an Indicated and Inferred Resource of over 25 million tonnes. The Company holds the exclusive right to earn an 80 percent interest in the property by meeting development expenditure targets. Zazu Metal’s management team holds years of experience in exploration, mine development and finance, and is committed to advancing the project through development. The property is located in the mining-friendly state of Alaska near the world’s largest zinc producer, Teck’s Red Dog mine. Zinc demand is forecast to rise alongside falling production rates and stalled mines starts creating tighter supply in 2015 and beyond.
Gil Atzmon – Founder, Chairman, CEO, and Director
Mr. Atzmon has over 20 years’ experience in the mineral resources sector. His career has included positions as a mining executive, investment banker, mining fund manager and geologist. Mr. Atzmon has participated in many global exploration and mining projects and has successfully arranged financing for the exploration and development of several mineral properties. In 2001 and 2002, Mr. Atzmon acted as Vice President, Corporate Development of Ivanhoe Mines Ltd. In 2000 and 2001, Mr. Atzmon served as a global energy and mining specialist in institutional equity and sales for BNP Paribas. From 1998 to 2000, Mr. Atzmon was Chief Investment Strategist and Portfolio Manager for US Global Investors, Inc. Mr. Atzmon holds a Bachelors degree in Geology and Geography from Columbia College, Columbia University and obtained a Master Degree in Energy and Mineral Resources from the University of Texas at Austin, Texas.
Matthew Ford – President
Mr. Ford has 16 years experience with mining and exploration companies. Mr. Ford founded an exploration services company and worked as a geologist in West Africa, Australia and the UK. He later worked as a research analyst and portfolio manager focusing on the mining sector which provided extensive travel to evaluate mineral properties. Mr. Ford completed his B.Sc. in Exploration and Mining Geology at the University of Wales, College of Cardiff and his M.Sc in Mineral Resources Engineering and Management at Nottingham University, England.
Ralf O. Langner—Chief Financial Officer
Mr. Langner is a Certified General Accountant with over 25 years of accounting and financial experience including over 20 years in the metals sector. Prior to joining the company, Mr. Langner was the Chief Financial Officer of Romarco Minerals Inc (a publicly listed gold exploration company) from 2003 to 2007, Financial Analyst at Bema Gold Corporation (a publicly listed gold producer) from 2000 to 2003, a self-employed accounting and financial consultant in 1999-2000 and held various positions at Dayton Mining Corporation (a publicly listed gold producer) from 1986 to 1999, including Accountant, Chief Accountant and Financial Analyst.
Joe M. Britton – Vice President Exploration
Mr. Britton is the principal geologist for the Lik property. He has over 35 years of mineral exploration and development experience, principally in Alaska. This experience includes direct field responsibility and supervisory roles in nearly all aspects of the Lik project since 1978. In addition to his experience with the Lik project he has also been involved in the execution and management of several regional exploration projects in Alaska and a variety of general mineral assessments ranging from regional to property specific projects in Alaska, the western United States and Costa Rica. He has substantial experience with governmental, land ownership, regulatory, environmental and social issues in Alaska as they relate to mineral exploration and development projects. His years in the minerals business have included employment by several mining and minerals companies and since 1989 he has been a consulting minerals geologist. Mr. Britton holds a Bachelor of Science (Geology) and a Master of Science (Geology) from the University of Alaska-Fairbanks.
Joshua Crumb – Director
Mr. Joshua Crumb is an engineer and mineral economist with a wide range of experience in the mining industry. His career included roles in project/construction management, engineering design, corporate development, and metals market research and strategy. Mr. Crumb was recently the Senior Metals Strategist at Goldman Sachs, working for the Global Economics, Commodities and Strategies research division in London. Mr. Crumb also held various positions within the Lundin group of companies, serving as Director of Corporate Development at Lundin Mining, and Special Project Analyst for group chairman Lukas Lundin, and is currently a director of Astur Gold.
Robert F. Giustra – Director
Mr. Giustra brings extensive experience in the mining industry having founded, developed and managed publically traded mining companies since 1992. After earning an Economics degree from the University of Western Ontario, he initiated his career in the public markets as a securities broker. Giustra then moved into investment banking and went on to co-found the institutional equity sales and corporate finance departments for an international investment dealer, specializing in the junior mining sector.
Giustra took his first senior executive position with a junior mining company in 1998. He currently serves as the Chief Executive Officer of Columbus Gold Corporation and holds board positions with a number of other publicly traded entities.
Bryan Morris – Director
Mr. Morris worked for Teck Cominco Limited as Vice President, Business Development and was responsible for identifying, evaluating and negotiating acquisitions, primarily in the zinc business, until August 2003. Prior to that appointment he was Vice President, Finance and director of Cominco Resources International Ltd., the stock exchange listed international exploration arm of Cominco Ltd., and had held senior positions in Teck Cominco Limited’s finance organization. During his career with Teck Cominco Limited, Mr. Morris also served as a director of several subsidiary and associated companies. Mr. Morris is currently a director and Chief Financial Officer of Andean American Mining Corp. (since July, 2005) Sinchao Metals Corp. (since December, 2006) and Inca Pacific Resources Inc. (since February, 2004), all publicly traded companies. He is also a director of the following Canadian publicly traded companies: Mediterranean Resources Ltd., Animas Resources Ltd. and, until late August 2007, a director and Chief Financial Officer of Morgain Minerals Inc. (since May, 2005). He is a Fellow of the Chartered Institute of Management Accountants (United Kingdom).
Dennis H. Peterson – Director
Mr. Peterson is a securities lawyer and the principal of Peterson Law Professional Corporation, a Toronto-based securities law boutique focusing on resource companies. Mr. Peterson was called to the Bar of Ontario in 1988. In the past five years, Mr. Peterson has served in the following capacities for the following public companies: director, Seven Clans Resources Inc. (2001 to 2003), a predecessor to Gammon Lake Resources Inc.; director, Franc-Or Resources Corporation (1996 to 2006); director, Probe Mines Limited (2001 to 2006); Secretary, Liberty Mineral Exploration Inc. (2003 to 2005); Secretary, Nayarit Gold Inc. (2005-2006); President and director, Consolidated Ophir Ventures Inc. (2004 to 2006), a predecessor to CIC Energy Corp.; President and director, Denroy Resources Corporation (2005 to 2007), a predecessor to Nevoro Inc.; director, EM Resources Inc. (2005 to present); President and director, Canadian Baldwin Resources Limited (2005 to 2006), a predecessor to Aura Minerals Inc.; and President and director, GGD Resources Inc. (2006 to present). Mr. Peterson holds a Bachelor of Commerce (Honours) degree from Queen’s University and a Bachelor of Laws degree from the University of Toronto.
Paul F. Saxton – Director
Mr. Saxton is a mining engineer who has been active in the mining industry since 1969, holding various mining positions including mining engineer, mine superintendent and executive positions for several Canadian mining companies. Most recently these include executive positions at Lincoln Gold Corp. (President and Chief Executive Officer, April 2004 to present), Pinnacle Mines Ltd. (Chairman and Chief Operating Officer, June 1995 to present), Doublestar Resources Ltd. (Chairman and Chief Operating Officer, January 2001 to July 2005), Standard Mining Corporation (President, June 1997 to July 2005) and Viceroy Resources Corp. (President, May 1996 to February 1998). Pinnacle Mines Ltd., Doublestar Resources Ltd. and Standard Mining Corporation are all publicly traded companies. In addition to holding a Bachelor of Science (Engineering) degree from Queen’s University, Mr. Saxton also earned a Master of Business Administration from the University of Western Ontario.