Zazu Metals Corporation

Zazu Metals Corporation

December 19, 2007 09:30 ET

Zazu Metals Corporation (ZAZ) Closes Initial Public Offering, Raising Total Gross Proceeds of C$4.4 Million

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 19, 2007) -


Zazu Metals Corporation ("Zazu") (TSX:ZAZ)(TSX:ZAZ.WT) is pleased to announce that a first closing of its Initial Public Offering ("IPO") of units was completed on December 19, 2007. Pursuant to this first closing, Zazu issued and sold a total of 2,536,300 units at a price of C$1.75 per unit for total gross proceeds of C$4,438,525. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant entitles the holder to acquire one common share for C$2.25 until December 19, 2012. Raymond James Ltd., Dundee Securities Corporation, Paradigm Capital Inc., Cormark Securities Inc. and MGI Securities Inc. acted as agents. A cash commission of C$310,696.75 (equal to 7% of the gross proceeds of the IPO) was paid to the agents. The Company's common shares and common share purchase warrants began trading on the Toronto Stock Exchange on December 19, 2007 under the symbols "ZAZ" and "ZAZ.WT", respectively.

As a result of the completion of the IPO, an aggregate of 22,775,900 previously issued special warrants of the Company have been automatically exercised for an equivalent number of common shares, and the special voting shares attached to such special warrants have been cancelled.

Prior to completion of the IPO, Zazu had a cash balance of approximately C$6,800,000. Net proceeds from the offering of $3,900,000 will be used to continue development of Zazu's 50% owned LIK Project, a zinc, lead and silver exploration property located in the Red Dog district of Alaska, home to the world's largest known zinc deposits. The LIK Project is approximately 22 km from Teck Cominco's Red Dog mine. Zazu has the right to increase its ownership interest to 80% by incurring additional expenditures by January 2018.

The LIK property was drill tested in the late 1970s and early 1980s and sporadically through the early 1990s. During the 2007 summer field season, Zazu completed a diamond drilling program of eleven holes with an aggregate depth of 1,394 m. Results of the 2007 drilling program returned zinc values averaging about 9% and ranging up to 19.10% and lead values averaging about 3% and ranging up to 14.90%. The purpose of this work was to (i) confirm the previous work on the LIK property and upgrade mineral resources to be compliant with National Instrument 43-101 ("NI 43-101"), (ii) provide material for metallurgical testing, and (iii) commence the process of in-fill drilling that will be required to develop a mine.

The property is divided by faulting into two parts, LIK South and LIK North. Much of the LIK South deposit is shallow and considered to be amenable to open pit mining. The LIK North deposit is comparatively deeper. Several feasibility studies have been carried out on the LIK deposit, but they are considered to be out of date.

Several estimates of historical mineral resources have been completed on the LIK property for its two different zones of mineralization. The historical mineral resource estimates determined to be most reliable for the LIK South deposit were those prepared by GCO Minerals Company ("GCO") in 1984 and the mineral resource estimates prepared by Noranda Exploration, Inc. ("Noranda") in 1985, which are presented in the following table.


Estimated Cut-off Tonnes Density
by Year Grade (Millions) Zn% Pb% Ag g/t t/m(3)
--------- ---- ------- -------- --- --- ------ -------
GCO 1984 5% Pb+Zn 22.04 8.88 3.08 49 3.21

Noranda 1985 7% Pb+Zn 10.85 10.51 3.42 n.a. 3.77

The most recent estimates of mineral resources for the LIK North deposit were prepared by Noranda following the completion of the 1985 diamond drilling campaign, and are presented in the following table. These estimates are historical.


Estimated Cut-off Tonnes Density
by Year Grade (Millions) Zn% Pb% Ag g/t t/m(3)
--------- ---- ------- -------- --- --- ------ -------
Noranda 1985 7% Pb+Zn 4.73 10.59 3.5 53 3.21

No metal prices or exchange rates were specified for either of the GCO or Noranda estimates. The GCO estimate was prepared using polygonal methods, while the Noranda estimates were prepared using sectional methods. Both of these estimates are considered to be historical estimates and are thought to be reliable at the current drilling density and are considered to be relevant as they provide an estimate of the approximate size of the two parts of the LIK deposit. However, both the GCO and Noranda mineral resource estimates pre-date NI 43-101 requirements and were not carried out or certified by a "qualified person" for purposes of NI 43-101. As a result, these estimates remain unclassified pending further work.

Copies of the prospectus relating to the IPO and technical report are available online at and Zazu's website at

The technical information contained in this release was compiled by Mr. Neil N. Gow, P.Geo., an Associate Consulting Geologist with Scott Wilson Roscoe Postle Associates Inc., who is a qualified person as defined by National Instrument 43-101.

The securities sold by Zazu were not registered under the U.S. Securities Act of 1933, as amended, and were not offered or sold in the United States except under an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor has there been any sale of the securities in any State in which such offer, solicitatiion or sale would be unlawful.

Contact Information

  • Zazu Metals Corporation
    Michael A. Steeves
    President and Chief Operating Officer
    (604) 638-3941
    (604) 662-8429 (FAX)
    Zazu Metals Corporation
    Ralf Langner
    Chief Financial Officer
    (604) 638-0977
    (604) 662-8429 (FAX)