This interview was conducted by Peter Grandich, editor of The Grandich Letter
Can you give a snapshot view of Zone Resources today?
Zone Resources (TSX: V.ZNR, Stock Forum) continues to be a large land owner (four properties) and active explorer in the Labrador Trough iron mining district. The Company owns or holds under option 106,152 acres of prime exploration ground where current and historical exploration work has outlined numerous zones with the potential to host large iron deposits. A significant drill program is planned for 2012.
What is the attraction of the Labrador Trough?
The Labrador Trough continues to be a world-class iron mining district with a history of new discoveries and new development projects. The quality of the iron produced is very high and is a sought after product for blending purposes at steel mills.
What do you think will happen in the world iron market?
The world economy requires a steady supply of premium iron products from politically-safe jurisdictions. Iron prices should stay in a range that justifies the development of iron mines in the Labrador Trough.
What are the highlights of the 2011 exploration program?
The 2011 program confirmed the historical exploration results on the properties and made two exciting iron discoveries on the Girard property. One hole intersected iron formation with an average of 35.77 per cent Fe over 243.00 metres on a five-kilometre-long airborne magnetic anomaly in the western part of the Girard property. The second discovery was in a hole which intersected 35.64 per cent Fe over 137.00 metres on a separate, nine-kilometre-long magnetic anomaly, 21 kilometres to the east. An airborne magnetic survey outlined numerous anomalies: the total length of all the magnetic anomalies believed to be caused by magnetite iron formation (with an amplitude over 1,000 nT), is approximately 75 kilometres in length and over two kilometres in width.
Do you have potential for high grade DSO (direct shipping ore)?
Hematite-rich zones have been discovered and drilled both historically and in the 2011 exploration program. All four properties have significant potential for high grade iron ore.
Are there any First Nations issues?
The government of Canada has settled land claims with the Inuit of Nunivik in northern Quebec. The Inuit are very supportive of responsible development in their territory, which contributes to the local economy.
What are your plans for 2012?
A significant drilling program is planned on the Girard property to follow up on the spectacular results achieved in the 2011 drill program. The drill program is designed to delineate the largest potential resource prior to defining a resource to 43-101 standards. In addition, an airborne gravity survey is planned to upgrade numerous targets and to test potential for high grade DSO iron ore bodies.
How will you finance the 2012 exploration?
The Company will require a financing to carry out the 2012 program. Any dilution from this financing should be more than offset by the increased value generated by the potential drilling results.
What will the 2012 program accomplish?
With additional drill holes showing good iron grades over substantial widths (comparable to 2011 results), lengths to the new discoveries would be defined. Adding this third dimension to the discoveries would be the start to defining iron ore bodies.
What advantages does Zone have?
Zone’s properties are located in the province of Quebec, where the provincial government is very supportive of mining. A favourable tax regime is in place and the recently announced Plan Nord will support resource development with required infrastructure.
What about Zone appeals to investors?
Zone Resources has a very low market capitalization considering the assets it has accumulated. Management feels that the 2012 exploration program combined with a market awareness program could create additional shareholder value.
Disclosure: Zone Resources is a Stockhouse client
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