Galaxy Capital Acquires Graphite Property from Zimtu CapitalDocument Transcript
ZIMTU CAPITAL CORP. ANNOUNCES TRANSACTION WITH GALAXY CAPITAL CORP. FOR SUN GRAPHITE PROPERTY IN QUEBECFebruary 23, 2012 - Zimtu Capital Corp. (TSXv: ZC; FSE: ZCT1) (the “Company” or“Zimtu”) is pleased to announce that the Company and three prospecting partners havesigned an agreement with Galaxy Capital Corp. (TSXv: GXY) (“Galaxy”) wherebyGalaxy can earn a 100%-interest in the Sun Graphite Property located in southernQuebec.A summary of the property is as follows: Large 4,200 hectare claim block, multiple target areas and anomalies the longest of which is 3 kilometres, trench and drill ready. Identified by Outokumpu Mines Inc. in exploration for base metal mineralization, ground work confirmed graphite. Road accessible.For its participation in the transaction, Zimtu will receive staged cash and sharepayments from Galaxy as follows: (i) $3,750 on signing (paid); (ii) $3,750 and 250,000common shares on acceptance by the TSX Venture Exchange (“TSXv”); (iii) $7,500 and125,000 common shares 14 months from the date of TSXv acceptance; and (iv)$10,000 and 125,000 common shares 24 months from the date of TSXv acceptance.Zimtu’s three prospecting partners will each receive cash and share considerationsequal to that of Zimtu. The vendors will collectively retain a 2% Net Milling Royalty onthe Property; 1% of which can be purchased by Galaxy for C$1 million. During theperiod which is 12 months from the date of TSXv acceptance, Galaxy will complete aminimum of $150,000 of exploration on the property.Graphite MarketGlobal consumption of natural graphite has increased from ~600,000 in 2000 to 1.2 MMt in 2012. Demand for graphite has been increasing by approximately 5% per year since2000 due to the ongoing modernization of China, India and other emerging economies,resulting in strong demand from traditional end uses such as the steel and automotiveindustries. Graphite also has many important new applications such as lithium-ion
batteries, fuel cells and nuclear and solar power that have the potential to createsignificant incremental demand growth. There is roughly 20 times more graphiterequired by weight to produce a lithium-ion battery than there is lithium. Demand forgraphite is expected to rise as electric vehicles and lithium battery technology areadopted as well as increasing uses in new technology applications.Natural graphite comes in several forms: flake, amorphous and lump. Of the 1.2 milliontonnes of graphite produced annually, approximately 40% is of the most desirable flaketype. China, which produces about 73% of the worlds graphite, is seeing productionand export growth leveling and export taxes and a licensing system have beeninstituted. A recent European Commission study regarding the criticality of 41 differentmaterials to the European economy included graphite among the 14 materials high inboth economic importance and supply risk (Critical Raw Materials for the EU, July2010). Graphite prices have been increasing in recent months and over the last coupleof years prices for large flake, high purity graphite (+80 mesh, 94-97%C) have morethan doubled.The Sun PropertyThe Sun Graphite Property consists of one large contiguous block of 76 claims totalingapproximately 4,200 hectares located 125 km northwest of the city of Baie-Comeau,Quebec. Access to the property is excellent with road access via the main lumber haulroad which originates in Baie-Comeau and Labrieville.The Sun Property was originally explored by Outokumpu Mines Inc. in 1998 exploringfor base metal mineralization. An advanced helicopter borne geophysical programconsisting of 2600 km of flight path in the region was performed. The airborne programlocated multiple electro-magnetic (EM) anomalies in the area, outside or coinciding withmagnetic anomalies. In a 15 km long trend, there are multiple target anomalies and off-set structures, the longest of which is 3 km long.This helicopter borne geophysical survey was followed by ground exploration on abouthalf of the major conductors only. The program was abandoned midway when it wasconcluded that all anomalies visited were related to graphite mineralization and that thebase metal sulphides of interest were nearly absent. Some of the graphite occurrencesseem to be associated to the contact (shear zone) between the different geologicalunits.
Galaxy plans to mount an aggressive exploration campaign on the propertycommencing with a complete compilation of historic geologic work followed by surfacework, trenching and diamond drilling. The exploration target is multiple crystalline flakegraphite deposits similar to other graphite deposits and mines in Quebec such as FocusMetals Inc.’s Lac Knife Deposit and Timcal Graphite and Carbon’s Lac des Iles Mine.The geology of the property is primarily on the contact zone between the Lac de laBlache anorthositic complex and the cataclastic gabbro suite and a variably magneticsequence of cataclastic gabbro interlayered with paragneiss.The Company cautions that it has not verified the quality and accuracy of the historicsampling results reported in this news release which predates the introduction ofNational Instrument 43-101 and cautions readers not to rely upon them. The historicfigures were generated from sources believed to be reliable; however, they have notbeen confirmed. Although the sampling results are relevant, they have not been verified.The optioned claims were acquired by the Company and its partners by staking, andwere acquired for project generation. Zimtu, along with its prospecting partners,continues to evaluate and acquire prospective resource properties to make available forsale or joint venture. As part of the Company’s business, Zimtu provides mineralproperty advisory services and helps to connect companies with mineral properties ofinterest.Jean-Sebastien Lavallée (OGQ #773), geologist, a Qualified Person as defined byNational Instrument 43-101, has reviewed and approved the technical content of thisrelease.About Zimtu Capital Corp.Zimtu Capital Corp. invests in, creates and grows natural resource companies therebyproviding a way for shareholders to indirectly participate and profit in the publiccompany building process. The Company also provides mineral property advisoryservices helping to connect companies to properties of interest.Zimtu Capital trades on the TSX Venture Exchange under the symbol “ZC” and theFrankfurt Stock Exchange under the symbol “ZCT1.” For more information please visitthe corporate website at http://www.zimtu.com or contact:Kevin BottomleyShareholder Services
Toll Free: 1.877.377.6222Phone: 604.681.1568Email: firstname.lastname@example.orgOn Behalf of the Board of DirectorsZIMTU CAPITAL CORP.“David Hodge”David HodgePresident & DirectorPhone: 604.681.1568 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 anystatements regarding beliefs, plans, expectations or intentions regarding the future.Forward-looking statements in this news release include that Galaxy can earn a 100%-interest in the SunGraphite Property; that in consideration for its interest, Zimtu will receive staged cash and sharepayments from Galaxy, that Zimtus partners will receive cash and share consideration equal to that ofZimtu; that the vendors will collectively retain a 2% Net Milling Royalty on the property, 1% of which canbe purchased by Galaxy for C$1 million; that Galaxy plans to mount an aggressive exploration campaignon the Sun Property commencing with a complete compilation of historic geologic work followed bysurface work, trenching, and diamond drilling; and that Zimtu with the support of its prospecting partnerswill continue to evaluate and acquire prospective resource properties to make available for sale or jointventure.It is important to note that actual outcomes and the Company’s actual results could differ materially fromthose in such forward-looking statements. Risks and uncertainties include, but are not limited to,economic, competitive, governmental, environmental and technological factors that may affect theCompanys operations, markets, products and prices. Readers should refer to the risk disclosuresoutlined in the Company’s Management Discussion and Analysis of its audited financial statements filedwith the British Columbia Securities Commission.