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Tuesday, April 3, 2012

Zone Resources: World Class Iron Ore Opportunity


Zone Resources:

Girard Property... One of the Biggest Iron Ore Targets in the Trough


Zone Resources   
ZNR-V $0.08


















Zone Resources ZNR-V is Beat the Market's first TMX listed IR client!! 

Shares Out... 62.8M
War. & Opt... 51.3M
Fully Diluted... 114.3M  

Market Cap... $5M

ZNR-V $0.085 is a company that I have followed closely for the last year writing it up to premium subscribers at $0.185 when they first announced acquisitions of key historical iron ore projects in the Labrador Trough.  The company went on a little run after, but the general atmosphere for junior explorers and risk appetite has tanked most materials companies since March to the point where most are trading at fire sale prices.  Zone is no exception currently trading at year lows even after confirming major iron ore discoveries on both Girard and Moore properties which were subject to discovery and exploration in the 1950's.

Zone Resources Inc. Retains Investor Relations Firm

Zone Resources has been mis-priced by the market concerning the material discoveries they made this winter on both the Moore and Girard properties.  When considering the valuations of Zone's peers and neighbors in the Labrador Trough whose valuations start at $50M and not $5M...ZNR is fast approaching an arbitrage situation.  The Girard Iron Ore Project has been significantly de-risked with the company making discoveries through the drill bit validating some very large targets on both Girard and Moore properties.  Zone Resources is now in a position for rapid growth focusing on creating shareholder value aggressively defining and developing the recent iron ore discoveries in the Labrador Trough which represent some of the largest and highest grading iron ore targets anywhere in Canada.

The massive 63,000 hectare Girard Project lies south of Ungaava Bay where Oceanic Iron Ore is developing the 20Mtpa 1.5Bt 32% Fe Hopes Advance Project and north of Adrianna Resource's 50Mtpa 6.45Bt 29% Fe Lac Otelnuk.

Here is news of the acquisition which explains a lot of the historical work done on Girard...
Zone Resources Inc. Acquires Iron Ore Project in Quebec

Zone has done a lot of work since the initial acquisition last spring...
  • Expanded overall land packages to over 100,000 hectares
  • Created an advisory board with Adrianna Resources founding members
  • Drill tested iron ore discoveries on Moore and Girard Projects

Zone Resources has caught a 'Tiger by the Tail' in the Girard Iron Ore Project.  Girard and Moore are both early development projects that create a very good early stage investment opportunity. The anomalies covering the 63,000 square kilometer Girard property are some of the biggest anywhere in the Labrador Trough.  




Girard & Block 103... The Two Big Discoveries in the Labrador Trough

The targets on Zone Resource's ZNR-V Girard and Cap-Ex Ventures CEV-V Block 103 were the two projects that Beat the Market identified early in 2011 as prospective material iron ore discoveries in the making.  Subsequently both companies have made material discoveries within the first year of acquisition of their high value projects.  CEV has been recognized for their discovery near Schefferville by a rapid share price appreciation last fall while Zone Resources has not.  Both discoveries are comparable and early indications suggest the Zone's Girard will grade much higher.  The first two intervals returning an average intercept of great than 35% Fe over the entire mineralized intersection.

Cap-Ex is a season ahead of Zone Resources when it comes to exploration being able to mobilize the drill last summer, but if the SP appreciation of CEV is any indication when the value for discovery happens for an iron ore project...

Zone is now entering into that sweet spot focusing on aggressive exploration at Girard expanding the two areas discovered late last year.
  1. Cap-Ex Ventures has subsequently made a big discovery on Block 103 near Schefferville and begun defining that discovery over a very large 16 km area whose share price appreciated from  a $0.26 low at the beginning of October to a $1.25 high 6 weeks later.  
  2. Zone Resources has drilled iron ore discoveries on both Moore Ross and Girard this winter and is now ready to develop drill test anomalies on Girard with a cumulative area of more than twice the size of Cap-Ex's Block 103 with intercepts 3% - 4% higher than Block 103's best intercept.  Zone Resources is trading at multi-year lows with a $0.085 ask.  
In Iron Ore... Size does matter

Zone's discoveries on Girard are on targets that dwarf Cap-Ex's Block 103.  Cap-Ex's Block 103 is only 7,175 hectares while the Girard Property is a giant at 63,041 hectares... nine times the size of Block 103.  The size of the anomaly where Zone Resources drilled 35.64% Fe over 137.0 meters would clearly have a hard time fitting in the space that Block 103 occupies and is just one of ZNR's high value targets on Girard.    This yet to be named monster anomaly is the same size or even a bit bigger than Cap-Ex's entire Block 103!!!  

CEV-V currently commands a market cap more than 10 times that of Zone Resources at over $100M fully diluted vs. $10M fully diluted.  This makes Zone Resources an ideal investment opportunity and is materially undervalued when comparing other recent discoveries in the Labrador Trough.  All while ZNR is entering into the meat of the exploration program in 2012 at the exact same time in company life-cycle when Cap-Ex started to appreciate in value materially.

Will things happen identically?  I can't suggest that, but what I cannot highlight enough is that ZNR is starting to aggressively defining some major targets this year that once completed will compare favorably to any iron ore deposit in the Trough.  One thing that makes Zone's Girard even more enticing is the fact that this deposit has been worked and de-risked on a historical basis.  Previous work tested high grading zones of greater than 40% over a significant strike length and recent drilling has confirmed high grades over extensive intersections to depth.  These early results from both the 50's and last year suggest Girard has the potential to be one of the highest grading Taconite deposits in the Labrador Trough.  Both holes to date assayed greater than 35% on average along the entiere mineralized core. .

Zone's first drill tested anomaly at Girard... Dec. 7th 2011
Zone Resources Inc. 35.64% Iron Intersected Over 137 Metres on Labrador Trough Property

Zone's second drill tested anomaly at Girard...  Jan. 10th 2012
Zone Resources Inc. Intersects 35.77% Iron Over 243.00 Metres on Labrador Trough Property

So how big is big???

It's freaking huge!!!  The Girard anomalies have a cumulative strike length extending over a 70km length with widths generally ranging from 1km to 2km. That is one of the biggest targets in the trough for any iron company.  Once the anomalies have been drill tested and confirmed along strike, it will be very easy to make size comparisons to some of the biggest projects in the Labrador Trough including Lac Otelnuk and Lab Mag.  On top of early indications of size, the potential grade on Girard is much higher than both of these two projects.  With a project that has both grade and size, early metrics indicate favorable comparisons to the largest iron ore discoveries in the Labrador Trough.  The Girard Iron Ore project one of the best kept secrets in the Trough.

Not for long.

Stay tuned as I bring the Zone Resource story to you over the next several months and unveil this very promising iron ore project in the Labrador Trough.

2 comments:

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