As investors we are all in search for the next Big Win. The big question is how to get positioned to seize future opportunities most effectively. The trick is to align ourselves with an organization that has the experience, expertise and smarts to transform the basic building blocks of a junior resource company prospects, projects, people and money into solid corporations that create real value for its shareholders.
If such an organization existed, we would all want to know about it. Well, it does exist!
Rockstone is involved in such a prospect generator that deserves the attention of any smart investor active in the resource market. This company is a veritable ray of light in this challenging investment climate.
Rockstone Research would like to introduce you to Zimtu Capital Corp.
Zimtu is an unparalleled company with an enticing portfolio of equity investments adding new positions on a regular basis however not by buying from the public market, but by way of generating its own projects and companies. Once publicly listed, Zimtu builds and backs these new market entrants that we all want to be a part of.
The Zimtu Business Model
Heres how Zimtu works. By keeping a close watch on the markets, Zimtu identifies commodities where profit opportunities are particularly promising. Zimtu then alerts its network of geologists, prospectors and staking partners from various backgrounds and in different geographic locations to evaluate and secure strong assets/properties of that specific commodity.
Zimtu is able to find quality assets quickly and efficiently because it has a long history of working with its network and has developed a partnership system (principally on a 50/50 basis), whereby the partners are incentivized to bring the best of what they discover to Zimtu first. During the bear market in commodities, Zimtu has expanded greatly and today has offices in Toronto and Stuttgart/Germany with a wide exposure to prospect generation, deal flow and capital.
Once an asset is secured, Zimtus internal team matches the projects with appropriate management teams, corporate structures and financiers. As these newly created companies move forward, Zimtu builds and backs them with everything that is required to advance them to the next level: know-how, partners, money, shareholders and awareness (just to name few key ingredients of making a quality asset getting what it deserves to be fairly appreciated by the market and to stick out among all the other companies).
By being involved at such an early stage in the company building process, Zimtu has access to financings not generally available to the public on the one hand making its highly selective shareholder base constantly happy, and on the other hand investing itself at lowest possible entry prices. Over the past 10 years, the Zimtu team has raised over $150 million for its own companies. The result is an unbeatable portfolio of resource companies that keeps growing with newly added holdings on a regular basis while its respective share prices appreciate over time from a low-cost price level with limited downside risk.
Zimtu caught the attention of Rockstone after realizing that Zimtu has been part of the building of a number of companies we have been following. Recent developments around the Zimtu Family illustrate why it is poised to launch a big win itself. Though Zimtu holds stock in over 40 companies, three companies are described briefly hereinafter to exemplify our determination and urge to get involved.
Western Potash Corp.
Western Potash Corp. (TSX: WPX; FSE: AHE); a company familiar to followers of Rockstone. Western Potash is a well-funded potash development company with a feasibility study completed on their Milestone Project in Saskatchewan, Canada. Since December 2013, shares of Western Potash have increased more than 100%. According to the most recent financial statements, Zimtu owns over 2.7 million shares and 2.7 million warrants in Western Potash. I urge readers to refer to our recent reports of Bidding War on Western Potash on the Horizon? and Potash Power Plays: Rio Tintos Big Blunder to view our comments on the continued potential of Western Potash.
Lakeland Resources Inc.
Lakeland Resources Inc. (TSXv: LK; FSE: 6LL) is a uranium exploration company focused on the Athabasca Basin in Saskatchewan, Canada; home to some of the worlds largest and richest high-grade uranium deposits. In 2013, Lakeland announced the addition of two Zimtu managers to their Board of Directors. Since that time, Lakeland has made several significant acquisitions, attracted a joint venture partner for its Gibbons Creek Property, and raised over $3.5 million to advance its assets. During this time, the Lakelands share price has increased from $0.04 to $0.19. Zimtus 4.9 million shares and 2.78 million warrants in Lakeland represent a significant asset. Lakeland and its joint venture partner Declan Resources Inc. (TSXv: LAN; FSE: DCR) have recently launched their winter/spring exploration program for Gibbons Creek which will include drilling of up to 52 holes on the property. Our articles Bright Stars in the Athabasca Basin Uranium Hunt and Athabasca Basin The Place to Be for the Upcoming Uranium Boom present the tremendous potential of Lakeland.
Commerce Resources Corp.
Commerce Resources Corp. (TSXv: CCE; FSE: D7H) is an exploration and development company focused on deposits of rare metals and rare earth elements. They are focused on the development of their Ashram Rare Earth Element Deposit in Quebec and the Upper Fir Tantalum and Niobium Deposit in British Columbia. Since December 2013, the share price has risen from $0.055 to $0.15, and the company just completed a $2.54 million financing with Secutor Capital Management, increasing their shareholder base with Bay Street funds. Commerce has just begun a drill program at its Ashram Rare Earth Deposit in order to increase the confidence level of existing resources from the current inferred category to the indicator and/or measured categories. The company anticipates that the current program will be sufficient to fully define the heavy rare earth enrichment of its Middle and Heavy Rare Earth
Element Oxide Zone at the indicated or measured level. In December and January, we published articles explaining why Commerce is our top-pick in the rare earth space and why we are confident that the Ashram Deposit will be put into production. In a few days, we will publish a third article.
Zimtu Capital Corp. maintains equity holdings targeting commodities such as potash, uranium, rare earth elements, rare metals, graphite, diamonds, copper, zinc and gold. Already in 2014, Zimtu has announced three more transactions adding to its growing asset base.
Zimtu has 11.2 million shares issued and outstanding with no warrants. Yes, only 11.2 million. Something that has caught my attention is that while building its asset base, the company has been able to maintain the integrity of its share structure a fact worth noting.
Considering the recent general uptrend in the venture market, prospect generators could provide a significant opportunity for investors. Those with significant equity holdings in a diversity of commodities possess strong upside potential. Zimtu Capital Corp. has been identified as one of those companies.
It is the opinion of Rockstone that Zimtu is well positioned to take advantage of the recent appreciation of its equity holdings but also to accelerate the growth of its asset base through its unique prospect generation business model.
Link to live chart (15 min. delayed): http://scharts.co/Pevm4X
Compared statistically with any other means of discriminating between exploration investments, the payoff from the prospect generator/joint venture business model portfolio, to any other kind, is unassailably better.
(Rick Rule, Chairman of Sprott US Holdings in an interview with Palisade Capital in March 2014)
The author, Stephan Bogner (Dipl. Kfm., FH), owns shares of Zimtu Capital Corp. and thus would profit from a share price appreciation, whereas the author may sell those any time without notice. Please read the full disclaimer within the full research report (available as a PDF below) as a conflict of interest exists with Zimtu Capital Corp. and none of this content is to be construed as a "financial analysis" or "investment advice".