Zodiac Gold

This morning, January 29, Zodiac Gold began trading in the TSX Venture Exchange under the ticker ZAU. Zodiac is a privately owned company based in Canada that concentrates its efforts on locating and extracting gold in the West African nation of Liberia.

The company has 100% interest in 418 square kilometers of land in a key location along the Todi Shear Zone, which is known to produce substantial gold deposits.

In addition to the Todi gold exploration project, Zodiac Gold owns two other early-stage licenses to explore along the Todi shear zone located northwest and southeast of the main Todi site. These additional licenses cover 2,200 square kilometers.

Preliminary satellite surveys and analysis of these northwest and southeast areas identified 20 high-priority zones within the Archean composite unit rock layers that have promising gold deposit potential. In total, these priority zones cover over 400 square kilometers across the additional licenses. Further analysis of sediment from regional streams outlined a significant gold-rich corridor spanning over 40 kilometers long and 10 kilometers wide in the license areas. Initial studies indicate substantial gold exploration promise in these satellite licenses along the geologically favorable Todi shear zone.

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 15 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 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) 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. 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.

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, 19% of Zodiac is owned by insiders and management. The rest is retail.

The company said there are 71.6 million shares outstanding. It has a market cap of CA$19.2 million.