Saturday 1st October 2016

Resource Clips


Juniors under scrutiny

Zimtu Research takes a shareholder’s look at early-stage opportunities

by Greg Klein

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Accurate information and insightful analysis are essential to informed investors. Consequently mining and exploration research reports are hardly scarce. But a new, free service from Zimtu Capital Corp TSXV:ZC distinguishes itself in at least two ways—it focuses on early-stage companies and examines them from a shareholder’s perspective. Available here, the monthly reports by research and communications officer Derek Hamill will examine Zimtu’s key holdings as well as wider market issues. Once coverage of a company has begun, it will continue for at least a year.

“Most of the other research is either done by a brokerage firm’s in-house analysts or an independent like Fundamental Research that is essentially doing research for hire,” explains Zimtu president Dave Hodge. “Some people might compare some of the newsletter writers to research, but they’re really writing opinion as opposed to research. I think the real difference with Zimtu Research is that Derek takes a shareholder’s point of view. Because Zimtu is a shareholder of these companies, he’ll be writing from that shareholder’s point of view, which certainly gives him an advantage.”

Zimtu Research takes a shareholder’s look at early-stage opportunities

Zimtu’s Derek Hamill examines early-stage explorers
from a shareholder’s perspective.

Starting with an economics degree from the University of Calgary, Hamill spent four years with ScotiaMcLeod before completing a master’s in finance at La Trobe University in Melbourne.

“He also has access to a wide range of expertise in all aspects of mineral exploration and development,” Hodge adds. “I’m talking about industry people who are connected with Zimtu either directly or through one of its affiliate companies, and we have world-class experts who Derek can consult to direct his research and opinion.”

Besides taking a shareholder’s perspective, Hamill will scrutinize a somewhat overlooked segment of the exploration sector. “Generally speaking, the existing research community doesn’t like to study early-stage companies,” Hodge points out. “Often research doesn’t start until a company is well advanced. But Derek’s research will be very focused on early-stage.”

As a result, potential investors will “get exposure to companies that are at the very beginning—and typically that’s where the biggest opportunities are. However, it’s also the riskiest. One of the things Zimtu Research will endeavour to do is help reduce that risk and actually offer an even greater upside because of the support that company would get through the Zimtu system,” he says.

That information complements Zimtu’s business model as a prospect generator. “We work on a 50/50 basis with our prospectors and geological firms to acquire new opportunities either directed by our partner or by Zimtu—where we see an opportunity in a commodity, we’ll send a team of prospectors or geologists to find new opportunities. We have two or three partners here in British Columbia, we have a large firm in Edmonton that has about 10 geologists with Canada-wide expertise. We have a large firm in Toronto that works as our partner and we have a couple of Newfies, successful business guys who go prospecting in their own light aircraft. They love having Zimtu as a partner because if they find something we can help take it to market.”

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