Zodiac Gold Inc. (ZAU:TSX.V) has begun trading in the TSX Venture Exchange under the ticker ZAU. Zodiac is a privately owned company based in Canada that concentrates its efforts on discovery and mining gold in the West African nation of Liberia.
Liberia is the least explored and virgin part of the prolific West African Craton, one of the largest gold-producing regions containing numerous world-class deposits with gold endowments of 450 million ounces (Moz) discovered so far. The country has a great potential to discover additional world-class gold deposits.
The company has 100% interest in 418 square kilometers of exploration license in a strategical location along the fertile Todi Shear Zone, a gold-rich regional structure known to host substantial gold deposits, many gold occurrences with hundreds of extensive hard rock artisanal mining sites where visible gold is exposed within the bedrock. Zodiac Gold also owns an early-stage reconnaissance license covering an area of 1,898 square kilometers to the North West of Todi Project. Reconnaissance exploration works conducted so far, including satellite survey and interpretation, regional sampling, and mapping campaigns, shows that the gold mineralization trend within the Todi Project is extending into the northwest license along a 40-kilometer-long and 10-kilometer-wide corridor. There are at least 20 additional targets identified in the northwest license with a strong potential to discover gold and deliver resources additional to the Todi Project. A district-scale land package with enormous gold exploration and discovery potential, the company said the project one of the most promising projects in West Africa with potential to deliver a multimillion-ounce resource.
Geologically, the project is located on Archean basement and amphibolite rocks and cross cut by Todi Shear Zone, which is the main structural domains of West Africa. Similar to many other gold deposits in West Africa, gold in Todi Project is concentrated along the well-defined shear zones. Greenstone rocks (amphibolites) are the main targets for gold exploration in the Liberian geological domain with many gold deposits discovered so far. In Todi land package, these priority target zones cover 400 square kilometers.
The project also has advantage of excellent logistics and infrastructure located one-hour drive from Monrovia, the capital city. All-year access, road coverage all around the tenements, close vicinity to domestic and international airports and sea ports, and availability of water and power sources are the main advantages for logistics and infrastructure for the future mining operation.
Surface exploration, including soil sampling and trenching, defined an 18.5-kilometer mineralization trend and at least five multi-kilometer gold exploration prospects with many drilling targets containing hard rock artisanal mining pits and visible gold in Todi property, the company noted. Initial scout drilling campaigns in Alasala and Arthington yielded encouraging high grade mineralized intersects with highlights such as 6.15 grams per tonne gold (g/t Au) over 19.6 meters, 7.3 g/t Au over 9.6 meters, 10.60 g/t Au over 6 meters, 4.6 g/t Au over 9 meters, and 7.69 g/t Au over 6 meters. Scout drilling results proves that Todi project has significant exploration potential for discovery of world-class gold deposits.00
Why Gold?
Potential interest rate cuts could lead gold prices to close as much as 10% above current levels (US$2,024.80 per ounce early Monday). In a research note reported by CNBC, UBS described recent price changes as "minor" and that the "power of the [Federal Reserve's] policy pivot should not be underestimated."
UBS forecasted a rise to US$2,250 per ounce by the end of the year.
Geopolitical instability and market uncertainty can boost gold as a "safe haven" asset, but markets are becoming uncertain that the Fed will begin rate cuts in March, CNBC said.
According to the World Gold Council's Gold Outlook 2024, the market is expecting a "soft landing" for the economy in the U.S. this year — traditionally not attractive for gold.
"That said, every cycle is different," the Council wrote. "This time around, heightened geopolitical tensions in a key election year for many major economies, combined with continued central bank buying, could provide additional support for gold . . . Further, the likelihood of the Fed steering the U.S. economy to a safe landing with interest rates above 5% is by no means certain."
Why Liberia?
To any average person, Liberia may not be the first place that comes to mind when you think about mining. However, according to Zodiac, Liberia presents a stable and welcoming environment for gold mining investment. As Africa's oldest republic with a government modeled on the U.S. system, Liberia has been a peaceful democracy since 2003. A series of free elections and smooth transitions of power have given Liberia over 20 years of continued political stability.
In addition, Liberia's mining policies encourage foreign investment with competitive tax rates, 100% profit repatriation, and flexible regulations. Liberia is underexplored and virgin for gold compared to other areas of the West African craton (a large portion of Precambrian crust that extends across western Africa), even though this ancient geological formation hosts over 450 million ounces gold (Moz Au) resources and reserves. Liberia lies on the least explored part of this gold-rich terrain, providing substantial greenfield opportunities.
Major mining companies have committed billions in investment, indicating confidence in Liberia's stability, policies, and unrealized mineral potential. With promising geology, favorable mining codes, political maturity, and significant room for additional exploration, Liberia stands out as an exceptional destination for gold mining projects and production.
Comparable Company: Montage Gold
Gold hounds will tell you one of the keys to success is being in a great neighborhood near other successful projects.
To the east of Zodiac's project in northwest Côte d'Ivoire, Montage Gold Corp. (MAU:TSX.V) is developing its Koné gold project (KGP).
"In the three years since Montage went public, we have evolved from an exploration company with a 1.5 Moz Inferred Mineral Resource into a development company with Probable Mineral Reserves of +4 Moz and total Indicated Mineral Resources of nearly 5 Moz," Montage Chief Executive Officer Rick Clark said.
"The KGP is now positioned to become the largest gold mine in Côte d’Ivoire with an expected average gold production of 349,000 oz (ounces) per year during the initial three years of operations at an AISC of less than (CA)$1,000/oz, leading to a short payback on capital of 2.6 years," Clark noted.
Streetwise Ownership Overview*The Toronto company focuses on projects in Côte d'Ivoire, including its 100%-owned KGP, which covers a total area of 2,258 square miles.
The company estimates a mine life for KGP of at least 16 years and expects to have an updated feasibility study completed this year.
Ownership and Share Structure
According to the company, 26% of Zodiac is owned by insiders and management, 13% by Institutions, and 61% by retail and others.
The company said there are 76.8 million shares outstanding. It has a market cap of CA$10 million.
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