VANCOUVER, Feb. 5, 2014 /CNW/ - Zimtu Capital Corp. (TSXv: ZC; FSE: ZCT1) (the "Company" or "Zimtu") is pleased to announce that the Company and one of its prospecting partners have signed an agreement with Rainmaker Mining Corp. (TSXv: RMG) ("Rainmaker") whereby Rainmaker can earn a 100%-interest in the Peace River Frac Sands Property located in north-western Alberta, Canada.
For its participation in the transaction, Zimtu will receive staged cash and share payments from Rainmaker as follows: (i) $5,000 on signing; (ii) 375,000 common shares on acceptance by the TSX Venture Exchange ("TSXv"); (iii) $5,000 and 375,000 common shares on completion of a successful exploration program on or before September 15, 2014. Zimtu's partner will receive cash and share consideration equal to that of Zimtu. The vendors will collectively retain a 2% royalty on production, 1% of which can be purchased by Rainmaker for $1,000,000. The transaction is subject to acceptance by the TSXv.
Peace River Frac Sands Property, Alberta Canada:
The Peace River Property is located north of the community of Peace River, adjacent to the Peace River Frac Sand Quarry, which is owned and operated by Canadian Silica Industries. It extends for approximately 40 km along the Peace River, straddling both the East and West banks where the target unit is exposed. Within the region, the Lower Cretaceous Paddy Member of the Peace River Formation is currently mined for frac sand. The Paddy Member is a friable sand unit representing a shoreline facies deposited in a fluvial environment, with a thickness up to 16.5 m (7.7 m average). The sand grains are almost entirely colorless quartz and beds are dominantly uncemented, which is ideal as a frac sand proppant in hydraulic fracturing.
The Peace River Frac Sand Quarry reportedly has a total annual capacity of 500,000 tonnes of silica sand. Rainmaker is encouraged by the acquisition given its proximity to infrastructure such as rail and roads, and location near the community of Peace River. Additionally, it is located in close proximity to the Horn River, Montney, and Cardium basins, and is central to the frac sand market within northwestern Alberta.
High priority exploration targets have been identified along the river banks from historic reports and maps. Rainmaker plans to commence exploration on the property with an extensive channel sampling program, as soon as snow conditions permit. Using sample results in conjunction with historic data and public information such as well logs, reports, drill core and cuttings, a follow-up auger program is anticipated to take place within the first half of 2014 to delineate locations with the best combination of quality, distribution, thickness, tonnage and accessibility.
Frac Sands Market:
Frac sand, a specific type of silica sand, is a durable, round grain, crush-resistant material produced for use in the hydraulic fracturing process (more widely known as fracking). The sand is a proppant material, which is used to "prop" open fractures made in shale rock during the fracking process. This allows oil, natural gas and natural gas liquids trapped in rock to flow to the well surface.
The Canadian frac sand market currently uses approximately 3.5 million tons of sand per year, while the U.S. market goes through roughly 30 million tons, both of which have enjoyed a spike in demand coinciding with the widespread use of horizontal drilling. In 2014, sand suppliers are expecting double-digit growth, based on projected meters drilled and well counts. US based Preferred Sands entered Canada in December 2011 with the $200-million acquisition of Winn Bay Sand in a deal that included one mine in Wisconsin and one in Saskatchewan (Hanson Lake). The demand for frac sands has risen sharply in the last few years in response to numerous shale plays developing in many parts of the US and Western Canada and could benefit further from proposed LNG terminals along the Pacific coast and emerging gas and oil fields under exploration and development.
The optioned claims were acquired by Zimtu Capital Corp. and its partner by staking. Zimtu, along with its prospecting partners, continue to evaluate and acquire prospective resource properties to make available for sale or joint venture. As part of the Company's business, Zimtu provides mineral property project generation and advisory services and helps to connect companies with mineral properties of interest.
The technical information in this news release has been prepared and reviewed on behalf of the Company by Patrick Kluczny, P.Geol., of Dahrouge Geological Consulting Ltd., a Qualified Person pursuant to National Instrument 43-101.
About Zimtu Capital Corp.
Zimtu Capital Corp. is a public investment issuer that invests in, creates and grows natural resource companies thereby providing a way for shareholders to indirectly participate and profit in the public company building process. The Company also provides mineral property project generation and advisory services helping to connect companies to properties of interest.
Zimtu Capital trades on the TSX Venture Exchange under the symbol "ZC" and the Frankfurt Stock Exchange under the symbol "ZCT1."
On Behalf of the Board of Directors
ZIMTU CAPITAL CORP.
President & Director
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Statements in this document which are not purely historical are forward-looking statements, including any statements regarding beliefs, plans, expectations or intentions regarding the future.
Forward-looking statements in this news release include that Rainmaker can earn a 100%-interest in the Peace River Property located in Alberta, Canada; that in consideration for its interest, Zimtu will receive staged cash and share payments from Rainmaker, that Zimtu's partner will receive cash and share consideration equal to that of Zimtu; that the vendors will collectively retain a 2% Royalty on the Property. 1% of which can be purchased for C$1 million; that Rainmaker plans to commence exploration on the property as soon as snow conditions permit; that the demand for frac sands could benefit further from proposed LNG terminals along the Pacific coast and emerging gas and oil fields under exploration and development; and that Zimtu, along with its prospecting partners, continue to evaluate and acquire prospective resource properties to make available for sale or joint venture.
It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Risks and uncertainties include, but are not limited to, economic, competitive, governmental, environmental and technological factors that may affect the Company's operations, markets, products and prices. Readers should refer to the risk disclosures outlined in the Company's Management Discussion and Analysis of its audited financial statements filed with the British Columbia Securities Commission.
SOURCE: Zimtu Capital Corp.
For further information:
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