ZonteMetals, TSXV:ZON is a relatively new junior explorer, starting out at the top of the market in 2011
It is run by Terry Christopher, a PhD and smart cookie in my books. The previous two companies he was involved with Nayarit Gold and Linear Gold both made discoveries and were bought out by mid tier Gold companies rewarding shareholders handsomely.
ZON has survived the downturn as they are very frugal, do everything in house (financials filings etc.) While Christopher is paid a salary he does all the boots on the ground and no consulting or contract fees are paid out.
Zonte first staked the Wings project in NFLD Canada. It is very unique and had been overlooked because the Gold is hosted in a different type of rock. You can stand on it and looks normal until you chip off a fresh piece and can see the mineralization on the fresh surface.
A lot of information they first obtained was from a gravel pit operation that did numerous samples with many running over 2 grams. What was an interesting story is they assayed a guys freshly graveled driveway and it ran ½ gram Gold.
Since then Zonte has mapped out these zones of host rock, done many of their own samples and IP surveys. Basically it is a very large Carlin type deposit target. Barrick even looked in the area early 2000s because it hosted Carlin type characteristics but they were further South and never found or tested this type of host rock.
In late 2016, Christopher's vision in NFLD was recognized with a staking rush that grabbed all the ground around Zonte, all the trend to the south where Marathon has discovered the Valentine Lake deposit.
Shawn Ryan, left the Yukon and came to NFLD with TORQ. Sheldon Inwentash of Pinetree fame has come back and moved into the NFLD trend with Palisade Resources and Pat DiCapo of PowerOne Capital in another junior.
To give the company more depth Zonte decided Colombia was the place to be, under explored and just recent stability from a lengthy civil war. And a more modern mining code in 2001.
With juniors in a bear market and no pressure Christopher over time evaluated around 100 projects in Colombia, looking for something further advanced - resulting in licenses applied for 3 projects in March 2014
Now news on the 1st of these projects, it looks like Zonte could end up with a chunk of AngloGold's 5 million ounce Gramalote deposit in Colombia. AngloGold has filed an Environmental Impact Statement so this is nearing mine build and production. The EIS states 5M ounces Gold and perhaps as much as 7M oz and production of 350,000 to 450,000 ounces per year with about and equal amount of silver.
For mine claim staking, Colombia uses an older system, the Universal Transverse Mercator (UTM) that uses a 2-dimensional Cartesian coordinate system to give locations on the surface of the Earth. One must download the UTM coordinate data from the Mine Ministry to ensure accuracy of claims.
It seems AngloGold was sloppy some where along these lines and there are areas of free ground left open at their Gramalote deposit. Zonte's Colombia partners became aware of this - so on behalf of Zonte they filed applications for these titles.
After a very long time, approx. 1 ½ years or so with no progress, Zonte took legal action to have the titles awarded under the mining code. With this pressure finally a decision was made and the applications were denied by the department of Antioquia, Colombia, where the application was made, because the claims were too small and would interfere with a mining operation (Gramalote)
The application for open areas over the Gramalote deposit and surrounding areas cover a total of almost 30 hectares. This compares to a recently issued title in Colombia that covered less than 0.1 hectare.
Colombian Mining Code 685 of 2001 does not specify a minimal size for titles, nor does the mining code make any reference to interfering with mining operations. In fact, according to the company's Colombian legal counsel, the mining code is clear, in that it is a first-in-time system for open areas with no minimum size and a maximum size of 10,000 hectares.
Most mining applications are processed by the Colombia Mining ministry but in this case it is the only province (Antioquia) left that still processes it's own applications. Seems there is some short comings there.
Zonte is now taking legal action as they believe these titles were wrongfully denied.
Recently in June 2017 the first actions were taken by the courts and they have suspended AngloGold's application at Gramlote until Zonte and Anglo settle in courts or other wise. Zonte applied for their application in 2013 and Anglo applied for the same claims 2 years later in 2015, so essentially admitting their mistake.
It reminds a lot of a similar situation In 2011 with Rye Patch – RPM. They staked claims amongst Coeur de Alene's producing Rochester Mine in Nevada. Basically Coeur made a huge mistake and let a number of claims lapse, they did not pay the renewals and Rye Patch knew Nevada well and quickly staked the lapsed claims.
About a year later Rye Patch and Coeur settled out of court where Coeur paid Rye Patch $10 million cash up front and around $32 million in Royalties over 4 years, so ended at about $42 million
Zonte appears to have legal right to these titles but are simply not being awarded because it would cause a problem for AngloGold, who is spending a lot of money and creating employment in that province. AngloGold has filed their Environment Impact Study so is close to putting Gramalote into production, but will not be able to proceed without these claims as some of them extend over the planned open pit for the mine.
With most juniors it is all about the risk/reward of the drill bit and discovery. Here there already is a large discovery but the risk is will the titles be awarded? And how much will AngloGold pay Zonte for these titles?
Gramalote is at least 5 times bigger than Coeur's Rochester Mine so a payout/royalty of something in the order of $50 to $100 million seems a conservative and reasonable assumption.
ZON only has 42M shares out so this would be a value between $1 and $2 per share.
Yukon - another brilliant move
After considerable negotiation, Christopher managed to land a 100% option on the Jest project in the Yukon. It is right adjacent to Victoria Gold's 6.3 million ounce Dublin Gulch project that is fully permitted and headed to production.
About Dublin Gulch here
All the indication at Jest and worked and confirmed by a number of Geologists that worked the Dublin Gulch project is that Jest looks better.
Drilling expected to start July 2017, here is map of first two targets for July drilling, Hill zone and two four
Also not in top right corner the location on the Pluton edge
Zonte's newest project Croos Hills a Copper/Gold Iron Oxide system is proving to be very interesting with large anomalies identified in early magnetic surveys.The ground magnetic survey was carried out over Dunn’s Mountain and it shows a large strong anomaly measuring 650m by 400m which is also coincident with known surface copper and silver mineralization.
The ground magnetic survey at Carols Hat has identified a three large anomalies. The area of Carols Hat hill produced a strong anomaly meansurein 550m by 600m and 500m deep. Extensive veining, similar to that at Dunns, is located at Carols Hat. The southern portion of this anomaly is covered in granite and in this area a mineralized fracture in the granite returned 2.82% Cu and 0.17% U3O8.