Sometimes we come across press releases that just make us shake our heads in disbelief. On Tuesday, approximately 1 hour after the market closed, Zanzibar Gold (ZBR on the CSE) published one of those press releases and we are surprised the BCSCC hasn’t requested the company to retract the press release.
The issues start with the title.
First of all, the ‘six million’ is a nice eye-catcher, but then you realize it’s in grams. 6 million grams really is less than 200,000 ounces. This obviously sounds less impressive than being able to quote a number in ‘million grams’ so Zanzibar has been pulling out the big guns for its headline.
Secondly, another word in the headline, ‘reserves’, sounds equally impressive as according to the NI43-101 standards, the word ‘reserve’ could only be used once the economic viability of the zone has been confirmed. Considering the entire press release announces the company’s consultants are going out in the field ‘to determine that the identified reserve is intact’, this per definition implies the viability of the zone hasn’t been confirmed as Zanzibar doesn’t even know if the gold from the 2009 report is still there…
Thirdly, in the press release, Zanzibar Gold mentions the ‘inferred reserve’ of 6 million grams of gold. Wait a second. An ‘inferred reserve’ must be something new the company came up with, as that simply does not exist according to the CIM standards. The only reserve categories are the proven and probable categories, while the resources are sub-divided into measured, indicated, inferred categories.
So, per definition, a reserve could ONLY be either proven or probable, but it’s absolutely impossible and 100% contradictory to have an ‘inferred reserve’. That appears to be a new category that was completely made up by the company.
And finally, the press release mentions ‘this work will determine how much of a gold bullion inventory can be established’. So now we’re going from an ‘inferred reserve’ to ‘gold bullion’? That’s a big step for a project where a field team is being sent out just to figure out if the gold that was found 10 years ago is still there.
We don’t know Mr. Glen MacDonald who signed off on this press release in his capacity as QP, but we would be happy to ship him a copy of the Best Practices manual from the CIM.
And perhaps to wrap up this article. Perhaps it’s not a coincidence CEO Souhail Abi-Farrage has been selling stock for the past month or so:
(Screenshots courtesy of CEO.CA)
As you can see, Souhail Abi-Farrage has been selling a cumulative 1.05M million shares. That’s obviously his right to do so, but this, combined with the horrible press releases raises questions.