Resource World Magazine

a p r i l / m a y 2 0 1 5 www.resourceworld.com 29 Kaizen Discovery on the acquisition trail by Ellsworth Dickson Kaizen Discovery Inc. [KZD-TSXV; CCNCF-OTC] is in a fortunate position compared to other junior explorers. The company was cre- ated through a combination of Concordia Resource Corp. and assets acquired from HPX TechCo, a 100%-owned subsidiary of High Power Exploration. This was followed by Kaizen's acquisition of West Cirque Resources in July 2014 in an all-share transaction and the acquisition of Tundra Copper in November, a private company with important copper assets in the Coppermine River region of Nunavut. However, what really sets Kaizen apart from its peers is its strategic partnership with ITOCHU Corp., a huge Japanese conglomerate that has provided a series of private placement financings. In addition, Kaizen has access to HPX TechCo's deep- sensing geophysical technology. In February 2014, ITOCHU made a $5.1 million private placement in Kaizen and in August 2014, ITOCHU closed a $4 million financing agreement to earn a 40% interest in Kaizen's Aspen Grove copper-gold porphyry project in southwest British Columbia. Matthew Hornor, President and CEO of Kaizen, told Resource World, "Our business strategy is to follow through on what other successful exploration companies have done in the past, namely acquire prospective mineral properties, both early stage and advanced, as well as companies. Acquisition costs are less expen- sive in the current downturn of the cycle. We plan to then bring those projects forward with Japanese financing and, in better markets, realize the benefits of having done so." Hornor said that Kaizen is interested in South American acqui- sitions, particularly in Chile, Peru, Brazil and Colombia, keeping in mind that the Japanese financiers have a long history of dealing with South America. "It is a well understood jurisdiction by the Japanese," said Hornor. "In our view, the name of the game is to acquire projects that can easily attract Japanese financing." Mining magnate, Robert Friedland, a mentor who Hornor has worked with for about 10 years, is an indirect shareholder of Kaizen through his ownership of private company High Power Exploration. "Friedland doesn't have a daily input into Kaizen operations; however, we do discuss various ideas," said Hornor. Hornor explained that because Kaizen is partnered with ITOCHU, the junior explorer is focused on base metals such as copper and zinc. Hornor said copper and zinc are what the trad- ing houses need to sell to end users to manufacture consumer products. Kaizen is currently completing a drill program at the Fairholme copper-gold-molybdenum project near the City of Orange, New South Wales, Australia, with assays available in the near future. In 2014, HPX's Typhoon 3D IP survey identified a large chargeability anomaly. One of Kaizen's most important projects is the 3,793 km 2 sediment- hosted, stratiform Coppermine Project near Kugluktuk, Coronation Gulf, Nunavut. The copper-silver property has over 18 very high- grade copper showings, including the Lars with 10 metres of 4.66% copper and 12.20 g/t silver and the Nor-98 with 6 metres of 4.74% copper and 23.33 g/t silver (see Kaizen's news release of November 24, 2014). The project has an airstrip and a camp. For 2015, planned work will include regional prospecting, mapping, sampling, geo- physics and a 1,500-metre drill program. Featuring a 115-km strike length, this project has large tonnage potential. The acquisition of West Cirque brought Kaizen some British Columbia properties, including the Tanzilla and Aspen Grove prospects in northern and southern BC, respectively. The Aspen Grove Project, a partnership with ITOCHU, is situated in BC's cop- per-gold porphyry belt. Drilling at the Par prospect of the Aspen Grove Project intersected widespread alteration and copper, zinc, molybdenum, silver and gold mineralization. Located 20 km east of Dease Lake, the Tanzilla Project should see a 1,900-metre drill program this year to target a concealed possible copper-gold-molybdenum porphyry deposit. Freeport- McMoRan Inc. [FCX-NYSE] can earn an initial 51% by spending $8 million over four years. Also acquired in the West Cirque trans- action is the Castle copper-gold porphyry project located in one of BC's most prolific copper and gold belts, 68 km south of Dease Lake and 25 km northwest of the newly-opened Imperial Metals Red Chris copper-gold mine. Previous drilling has returned encouraging results. Hornor said that Kaizen's access to the HPX Typhoon geophys- ical technology offers a significant advantage over conventional geophysics in that it can penetrate thick rock cover to detect min- eral targets up to 2.5 km in depth. n Recent drilling operations at the Fairholme Project in New South Wales, Australia. A 3,000-metre drill program began in December 2014. Four deep holes are testing a copper-gold anomaly along a 3 km strike length. Photo courtesy Kaizen Discovery Inc. MINING

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