Zanzibar Enters into Option Agreement with Minerales de Tarachi S. de R.l. de C.v.
Zanzibar Gold Inc.
5623 145A Street Surrey BC V3S 8E3
Tel 236-818-2886
ZANZIBAR ENTERS INTO OPTION AGREEMENT WITH MINERALES DE TARACHI S. DE
R.L. DE C.V.
August 4, 2020
Zanzibar Gold Inc. (the “Company”) (ZBR – CSE; ZNZBF – OTC Pinks) is pleased to announce that
Minerales De Tarachi S. de R.L. De C.V. (the “Optionor”) has signed an option agreement (the
“Agreement”) with the Company for an option (the “Option”) for the Company to earn a 100% interest
in the Sonora Gold mineral concessions in the mining district of Benjamin Hill in Sonora, Mexico.
The Sonora Gold property ("The Property") is a concession of approximately 6000ha in the state of
Sonora, Mexico in the municipality of Benjamin Hill. The property is conveniently located in an area
with road and electricity infrastructure. Project supplies and services are available close by in the
local area.
The Property lies in the Caborca gold belt that hosts a number of operating and historical mines. The
project area is cut by the district scale NNW trending Mojave Fault. Zanzibar geologists believe this
large structural feature controls the distribution of mineralization in the region. Recent field
observations indicate the project area is favorable for structurally controlled epithermal deposits in the
north and iron oxide copper gold replacement deposits in the central part of the concession adjacent
to the Mojave fault. The Caborca gold belt hosts several operating mines including the San Francisco
Gold Mine, where over 1 million ounces gold have been mined to date, the San Francisco mine is
located 18 km north of the Sonora Gold project and hosts gold mineralization that can be linked to the
Mojave Fault.
Zanzibar Gold Inc. is looking forward to commencing detailed mapping and sampling exploration
program on this large and very prospective property with a view to be drilling within four to five
months. Press releases reporting exploration results should be anticipated regularly over the coming
weeks and months, subject to receiving the necessary regulatory approvals.
Greg Bronson, P.Geo., has prepared, reviewed, and approved the scientific and technical information
in this news release. Mr. Bronson is a non-independent Qualified Person as defined by National
Instrument NI 43-101.
The Option may be exercised by making eleven cash payments, every six months, totalling
US$4,000,000 within five years of the execution of the Agreement (the “Execution Date”). The first six
payments shall be cash payments of US$50,000 each. A further two cash payments US$150,000
each; a cash payment of US$200,000 and US$500,000; and a final cash payment of US$2,700,000
on the fifth anniversary of the Execution Date. The Company shall also issue to the Optionor
10,000,000 common shares of the Company: (i) 1,500,000 common shares each on the effective
date of the Agreement and six months following the effective date, which shall be two business days
following the date of filing of the Agreement with the Canadian Securities Exchange; (ii) 2,000,000
common shares on each the first and second anniversary of the Execution Date; and a final issuance
of 3,000,000 common shares on the third anniversary of the Execution Date. The Optionor retains a
3.0% net smelter royalty pursuant to the Agreement, of which 1.0% may be purchased by the
Company for US$1,000,000, reducing the Optionor’s interest to 2.0%.
In connection with the Agreement, the Company has entered into a finder’s fee agreement with Spirit
Exploration Corp. (“Spirit”) in consideration for services in introducing the Company to the Optionor,
pursuant to which Spirit shall receive consideration in the form of shares at the rate of 10% of the
cash and option payments payable under the Option Agreement during the first 3 years of the term of
the Agreement.
On behalf of the Board
Abby Farrage, President
1 (236) 818-2886