Zanzibar Gold (ZNZBF): The New Player in the Booming Vanadium Game

Date : May 13, 2019

 

New Opportunity:  Zanzibar Gold Inc. (OTCMKTS:ZNZBF)

 

 

It is time to look for undervalued junior mineral mining and exploration names. And one that should be considered is Zanzibar.

 

The company reports having an active interest in a Tanzanian mining property and has been entirely disregarded by the market in recent action has money has started to gush back into the gold theme.

 

However, even more interesting is the company’s move to get into vanadium mining. First discovered in 1801 in Mexico City, vanadium has rare qualities that give it the ability to make materials stronger, lighter, more efficient, and more powerful. It is said that Vanadium is the metal that we cannot do without, but it is extremely rare.

 

This company just entered the vanadium space and represents an extremely interesting investment opportunity today. Indeed, its most recent release suggests that it has found both gold and vanadium at its mining property already.

 

 

Symbol:  OTC:ZNZBF, CSE:ZBR

Company:  Zanzibar Gold Inc.

Quote:  http://finance.yahoo.com/q?s=ZNZBF

Latest News:  http://finance.yahoo.com/q/h?s=ZNZBF+Headlines

Who is ZNZBF

Zanzibar Gold Inc. (OTCMKTS:ZNZBF) is set to identify, evaluate, acquire and explore mineral properties for the purposes of identifying a mineral resource deposit on its existing property interests or any of the subsequent properties acquired by the Issuer for the development of a mine.

 

As noted above, the company just entered the vanadium industry as well.

 

The Gold Property is located west of the village of Kwamagome, 35 kilometres southwest of the city of Handeni in the Handeni Region, Handeni – Tanga Rural District, United Republic of Tanzania, East Africa and is centered on 5°33’47”S and 37° 51’35”E.

 

First investigated in 2005, there is no recorded previous exploration on the Property. It is located within a pan-African belt of metamorphic rocks known as the Mozambique Belt. The northwest southeast striking belt of metasedimentary rocks around a central core of a mafic amphibolite unit in granitic gniesses and/or intrusive equivalents which are striking northwest and associated with the Magambazi zone (East Africa Mines – formerly Canaco Resources) located to the south east.

 

A recent alluvium deposition that fills the main valley that are adjacent to the ridges of outcrop that host the main auriferous structures in the Bondo area (which lies immediately north of the Property). The Alluvium appears to be un-stratified composing of cobbles, pebbles, gravel and sand. The cobbles and pebbles for the most part appear to be quartz although a few metasediment types were noted. The auriferous unit is sand and almost colluvial in appearance. The identified mineralization in the adjacent drainages is beneath 5-6 metres of barren clay silt valley fill contains the Gold.

 

A recommended exploration program to evaluate the potential of the Property by test pitting and trenching is being initiated.

Recent Catalysts

The most important announcement for the stock just hit showing that the Company’s samples from its primary mining property confirm the presence of both Gold and Vanadium.

 

According to the release, “During this initial program soil and rock samples were taken in the area and analyzed for ICP 30 elements. Preliminary geological mapping and analysis was also undertaken. One new showing, gossan in a sheared portion of the gabbro was uncovered and sampling (Grab, rock) assayed 0.31% Copper and 1.15 grams gold with high vanadium (84ppm) and another sample from the same zone had copper and gold values and 194 ppm vanadium. This new showing in a shear zone within the gabbro unit that crosses the entire property in a NNW direction and is anomalous in its entirety (2-3 km is present on the property) and continues to the north is part of the continuous unit with several gold copper showings. Values of samples in the adjacent properties and showings that are on the property have been reported in the 1-3 ppm range with high grade (adjacent properties) values in the 10+ gram per tonne range. Gold (over 2000 ounces) was recovered from the region, in the mid-20th Century from small operations. The preliminary sampling has indicated that the gabbro is more mineralized than the surrounding volcanics, with higher vanadium values. Anomalous gold values are associated with higher vanadium values and copper values. A review of the available data indicates that the gabbro is anomalous in vanadium and gold.”

 

The big news here is the company’s announcement that it has signed an option agreement to acquire a potential vanadium Property on Vancouver Island. The Property is located adjacent to an area which has had significant copper gold exploration that revealed anomalous vanadium values in soil sampling.

According to the release, “ZBR will pay $50,000 and will issue 1,000,000 common shares on signing and conduct $75,000 in exploration by December 31, 2018. Further payment include an additional $50,000 on or before May 15, 2019, 1,500,000 common shares on or before October 31, 2019 and $150,000 in exploration expenditures incurred on or before December 31, 2019. During this soil program (2006) over 60 samples were taken in the area and on the claim they were analyzed for ICP 30 elements. A review this year outlined for vanadium, found that most of the samples were above the world wide back ground of 50 ppm and a high proportion (90%) were above 100 ppm with almost all on the Panther Claim along a 2 km stretch above 200 ppm and 2-3 above 300 ppm.”

 

Another important recent catalyst here is all about the Fed blink we saw last week when Fed Chair Jay Powell stated that the Fed would take a far more patient and data dependent path forward.

 

The key impact of this “rhetorical ease” in policy was seen in the Fed Funds Futures market. Coming into that statement, investors were expecting 1-2 rate hikes in 2019. After that, the expectation dropped to 0 hikes in 2019, and a lean toward a possible rate cut early in 2020.

 

The shift sent stocks ripping to the upside along with gold.

 

The market is good at discounting such shifts in tone, so you will find that gold and the gold miners started to outperform ahead of this shift because it was somewhat easy to see the Fed was cornered into reinforcing the notion of the “Fed Put” – the idea that the Fed will have to ease policy when things go haywire.

 

Otherwise, the main key catalyst here is the company’s successful listing on the Canadian Stock Exchange, which is an achievement that shouldn’t be discounted. It grants credibility and legitimacy to the company’s brand among the investing public. If gold takes off above $1500 – which many analysts are starting to believe, with trillions in printed money still floating around from central banks following the global financial crisis, and now that the tide is turning once again – then Zanzibar may be one of the most explosive speculative possibilities.

Technical Analysis

As you can see in the chart shown below, the stock has been locked in a recent upward trend despite the extreme volatility that has gripped most of the market since the start of October.

 

Naturally, most traders will know that the gold market has been reviving its 2009-2011 fervency over the past couple of months, ripping from $1168 to $1300 in that time. We would watch closely for a move above $1360 per ounce from here. That could spell an important technical breakout that quickly brings the $1500 to $2000 zone back into play and gets the whole gold bull energy back in gear for the first time in 7 years.

 

In addition, the steady and rising demand for vanadium should add to this positive technical outlook.

About ZNZBF

ZNZBF (Zanzibar Gold Inc) is set to identify, evaluate, acquire and explore mineral properties for the purposes of identifying a mineral resource deposit on its existing property interests or any of the subsequent properties acquired by the Issuer for the development of a mine.

 

The Gold Property is located west of the village of Kwamagome, 35 kilometres southwest of the city of Handeni in the Handeni Region, Handeni – Tanga Rural District, United Republic of Tanzania, East Africa and is centered on 5°33’47”S and 37° 51’35”E.

 

First investigated in 2005, there is no recorded previous exploration on the Property. It is located within a pan-African belt of metamorphic rocks known as the Mozambique Belt. The northwest southeast striking belt of metasedimentary rocks around a central core of a mafic amphibolite unit in granitic gniesses and/or intrusive equivalents which are striking northwest and associated with the Magambazi zone (East Africa Mines – formerly Canaco Resources) located to the south east.

 

A recent alluvium deposition that fills the main valley that are adjacent to the ridges of outcrop that host the main auriferous structures in the Bondo area (which lies immediately north of the Property). The Alluvium appears to be un-stratified composing of cobbles, pebbles, gravel and sand. The cobbles and pebbles for the most part appear to be quartz although a few metasediment types were noted. The auriferous unit is sand and almost colluvial in appearance. The identified mineralization in the adjacent drainages is beneath 5-6 metres of barren clay silt valley fill contains the Gold.

 

Key Points:

  • ZNZBF is the newest player in the booming Vanadium market and just confirmed the presence of Vanadium at its primary mine.
  • ZNZBF has benefitted from a recent shift toward rhetorical easing of monetary policy in the US by the Fed, sending gold and junior gold miners to the upside. We expect this to potentially continue.
  • ZNZBF has interests in play in Tanzania and is actively exploring other properties.
  • ZNZBF is coming off an RSI trough under 40, pointing to a massively oversold stock now heading back the other way.
  • ZNZBF just recorded a MACD Bullish reversal, suggesting a technical change in trend.

Conclusion

 

As noted above, the mineral mining space is heating back up. Zanzibar is a deeply overlooked and undervalued name in the junior mining space.

 

With Vanadium booming as a red-hot mining space, the company’s move to get into the game should do nothing but help the stock’s outlook.

 

In addition, as the Fed continues to ease in the face of potential recession indicators – such as widening credit spreads and a flattening yield curve – we would watch for a new gear in gold and the more speculative names in the gold mining space, such as Zanzibar.

 

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