insideISSUE 02/2013

www.ZIMTU.com

ConTenT

EXPLORATION SUCCESSA MILeSTone FoR PASIneXPasinex Resources’ CEO, Steve Williams, provides an in depth background on why he thinks the latest copper results at the Golcuk project in Turkey are a turning point for the company.

page 3

UNIQUELY POSITIONEDInTeRVIeW WITH LAKeLAnD IR MAnAGeR RoGeR LeSCHUKStrategic assets in the Athabasca Basin with exploration upside.

page 4

GO FOR MONGOLIAPRIMA FLUoRSPAR IS AIMInG To BeCoMe An InDUSTRY LeADeRThe acquisition of a Mongolian fluorspar company is just the starting point. Prima is in the RTO process with a multinational fund manager based out of New York.

page 5

ON TRACK TO BE DEVELOPEDWeSTeRn PoTASH LAnDMARK DeALThe market has not given justice to WPX’ partnership with China’s biggest producer of fertilizer, China Blue. John Costigan explains the background of the deal.

page 6-7

URAnIUM IS ReADY To GeT RoLLInG AGAInZIMTU WELL POSITIONED WITH ITS HOLDINGS IN LAKELAND

S ometimes, a new discovery can change the perception of an entire market. It is probably fair to say that

the joint venture between Fission Uranium and Alpha Minerals, Patterson Lake South “PLS” uranium discovery in the South-West of the Athabasca Basin, Saskatchewan, has provided this favour to investors. The dis-covery has brought excitement back into uranium exploration.

In fact the PLS discovery has turned the spotlight onto the entire Athabasca Basin where the prices for projects and prospect-ive land have been increasing considerably over this past summer. No wonder: the PLS discovery marks a significant shallow, high-grade uranium discovery in a politically safe country. Throughout the past few months, numerous analysts have commented on both Fission Uranium and Alpha Minerals in an extensive manner thus setting the stage for institutional investors to re-enter the sector.

Zimtu was able to gain exposure to the re-cent uranium excitement through its equity holding Lakeland Resources Ltd. (TSX.V: LK). In only a few months, Lakeland has built itself a significant portfolio of proper-ties and modest treasury with the help of Zimtu and its partners. Currently Lakeland has 29.4 million shares outstanding. Man-

agement and insiders hold close to 40 % of the company.

Lakeland’s geological team has a long his-tory of exploration and discovery of uranium assets in the Athabasca Basin. The team in-cludes Jody Dahrouge of Dahrouge Geological Consulting who was instrumental staking and developing the J-Zone, which was subse-quently sold to Denison. Jody was also part of the team that identified and staked both Patterson Lake North and South. Although past success does not guarantee future suc-cess, Lakeland believes Dahrouge Geological is an ideal partner when it comes to exploring the Athabasca Basin. On top of this, Lakeland has established a strong Advisory Board by ap-pointing Richard T. Kusmirski, M.Sc., P.Geo., an experienced uranium geoscientist, and Thomas S. Drolet, B.Eng., M.Sc., DIC, a nu-clear energy and uranium industry specialist.

Lakeland has recently announced the clos-ing of a $738,000 private placement. The funds will be used to commence exploration of its Riou Lake Project.

It’s worthwhile noting that Zimtu also owns other shares of companies that are active in the Athabasca Basin: 425,000 shares in NexGen Energy (TSX.V: NEX) and 1 million shares in Pistol Bay Mining (TSX.V: PST).

eURoPeAn BUS ToURA group of Zimtu portfolio companies is preparing for the 3rd European bus tour from November 7th to November 13th. The 2013 trip comprises the Edelmetallmesse in Munich as well as appearances in Geneva and Zur-ich. The Edelmetallmesse is Europe’s largest gold show and Zimtu will be prominently featured along with a number of its core holdings including Lakeland Resources Corp. (Uranium), Prima Fluorspar Corp. (Fluorspar), Commerce Resources Corp. (Rare Metals & Rare Earth Elements) and Pasinex Resources Corp. (Copper).

inside

www.ZIMTU.com- 2 -

Sven OlssonDirector of Zimtu Capital Corp.

eVenT DATeS:Here you can find all events where you can meet us.

September 12-13, 2013ToRonTo ReSoURCe InVeSTMenT ConFeRenCe TORONTO

November 8-9, 2013InTeRnATIonALe eDeLMeTALL- & RoHSToFFMeSSeMUNICH

November 25-26, 2013SAn FRAnCISCo HARD ASSeTSSAN FRANCISCO

December 1-5, 2013 MIneS AnD MoneY 2013LONDON

January 19-20, 2014 VAnCoUVeR ReSoURCe InVeSTMenT ConFeRenCeVANCOUVER

March 2-5, 2014PDAC 2014TORONTO

Visit us: www.ZIMTU.com

IMPRInT:

PUBLISHeR:Zimtu Capital Corp.Suite 1450 - 789 West Pender St.Vancouver, BCV6C 1H2Canada

Tel: +1 604 681 1568Fax: +1 604 681 8240

eDIToR:Sven Olsson

GUeST ARTICLe:Steve Williams, CEO of Pasinex Resources Ltd.Robert Bick, CEO Prima Fluorspar Corp.

DeSIGn:Jarret Kusick

LAYoUT:Heike Rapp

DISCLAIMeR:

The views expressed here in this newsletter contain information derived from publicly available sources and have not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.

Any forward looking information in this newsletter has been prepared on the basis of a number of assumptions which may prove to be incorrect. This newsletter should not be relied upon as a recommendation or forecast by Zimtu Capital Corp. or any other company mentioned in this newsletter.

Nothing in this newsletter should be constructed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.

eXCITInG oPPoRTUnITIeS In A DULL MARKeTLAKELAND, PASINEX AND PRIMA MAKE MAJOR STEPS FORWARD

I nvestors in great numbers have turned their backs thus creating rare opportun-ities for the bravest to be the first to re-

enter.

Take Western Potash Corp., the largest holding in our portfolio, as an example: The Company completed a landmark deal with a major, reputable Chinese partner and has received minimal credit for it. Instead, the Company’s shares trade at a 40 % discount to the entry price that their Chinese partner found acceptable and reasonable. We be-lieve that the management team of Western Potash put the company in a good position to advance its Milestone Deposit in Sas-katchewan through development.

As of late, we have seen signs of a rebound in the resource market. Zimtu’s model of bringing new companies and opportunities to our shareholders has been evolving and we are confident that the work that our team has done over the last couple of months is going to bear fruit soon. The Zimtu team has been focused on taking advantage of undervalued opportunities and structuring new exploration companies around them, some of which are beginning to receive attention from investors.

Recently, Lakeland Resources Ltd. has been a focal point for us. Our team helped identify numerous high-quality uranium targets within the Athabasca Basin and, more importantly, we assisted and partici-pated in raising capital for Lakeland during

their first financing for uranium explora-tion. The first tranche of the financing re-cently closed and was priced at $0.10 CAD per unit. Given the fact that Lakeland was trading as low as $0.03 CAD only a couple of months ago, this is quite an achievement for their management team. Zimtu owns approximately 3.65 million shares and we strongly believe that Lakeland is in the right place, at the right time. Over the next 2-3 months, we expect the Company to com-mence a preliminary exploration program to identify the best targets for drilling.

Another of our prospective holdings is Pasinex Resources Ltd. which has been reporting notable copper results from their projects in Turkey. In light of current market conditions, Pasinex continues to conduct exploration in addition to meeting with po-tential partners for their suite of properties in Turkey. Zimtu owns more than 10 million shares of Pasinex Resources and we look forward to growing with the company during this exciting time of discovery.

Last but not least, Prima Fluorspar has re-cently surprised the market with news that the company has signed a letter of intent to acquire a Mongolian fluorspar com-pany which owns a past producing fluor-spar mine. This transaction will result in a reverse takeover by affiliates of Firebird Management of New York. Currently, Zimtu holds 7.5 million shares in the Company and we are encouraged by the recent part-nership Prima has forged.

COMMENTARY

inside

www.ZIMTU.com- 3 -

FROM THE CEO‘S DESK

“CoMPAnY MILeSTone ReACHeD”WHY THE GOLCUK COPPER PROJECT IN TURKEY HAS THE PO-TENTIAL TO BECOME BIG AND HIGH GRADE

T he Pasinex Resources Limited Golcuk Cu / Ag project in Sivas province, Tur-key is turning into a very strong pros-

pect for Pasinex.

During 2013, Pasinex has completed two drill holes on the property, discovered what appears to be a new and important Cu out-crop some 2 ½ kms away from their previ-ous area of focus and released a NI 43-101 technical report on the geology of Golcuk. All this done in a year that has not been favourable for junior exploration. However, most importantly, all of these events have added significantly to Pasinex’s knowledge of the geology of the Golcuk deposit and en-hanced the prospectivity of the project.

In order to understand the Golcuk property and its potential it is important to under-stand the key findings from the NI 43-101 report. This report was issued in July 2013 and is available through the website. The report summaries and interprets the geo-logical information on Golcuk to date and most importantly suggests a likely geologic-al model for the Golcuk deposit. These geo-logical models are important because they aid the geologists in looking for the deposit in the ground (what clues to look for, how to interpret what they are seeing etc) and also the models permit benchmarking of the de-posit. The prospect can be seen to be like these well-known and exploited mineral de-posits that had this size of mineral deposit grade and tonnage.

In the case of Golcuk the deposit was identi-fied as most likely to be a “Volcanic red-bed deposit” or sometimes also called a “Basaltic Cu” deposit. As far as Cu deposits go these tend to be less common but have seen some notable deposits. The first known similar deposits are the Cu deposits from up-state Michigan in the Keweenaw Peninsula. There were a number of mines in this area (one was called White Pine) over a mineralized zone of at least 100 km. This area of Michigan was mined from 1854 to 1976 and produced over 11 billion pounds of Cu! So it was a very rich and productive mining area for the USA. The extent of this mineralized area can be seen in Figure 1 below (taken from the Golcuk 43-101 report). Another known Basaltic Cu deposit is the Sustut deposit in BC, Canada which has a resource of 5 million tonnes at about 2 % Cu. These benchmark deposits give

us and idea of what target we can have for Golcuk. At this stage, Pasinex has a target, for a deposit of at least 5 million tonnes of about 2 % Cu. This is a reasonable target given this type of deposit.

The Basalitc Cu deposits are sometimes referred to as “manto” type deposits. A “manto” can best be visualized as a pan-cake like structure running along paths con-trolled geological features such as faults. Actually, the basaltic Cu’s are originally made as lava flows from a long extinct vol-cano. So it is easy to see how they look like “pancake flow structures”.

This information about the suggested geo-logical model for Golcuk is given here first because it helps to understand the explora-tion work that Pasinex has done in 2013 and the results seen.

Firstly, let us look at the drilling done by Pasinex in 2013. Pasinex drilled two holes. The first hole hit a mineralized zone of nearly 10 meters width of 2.97 % Cu / 37 g/t Ag. This was an exciting first hole for Pasinex. The width and grade were indica-tive of a Basaltic Cu “manto” or pancake. The second hole did not intersect any sig-nificant mineralization. Pasinex now be-lieves that the possible reason for this hole missing the mineralization was that we did not understand well enough the structural controls that dictated exactly where the pre-historic lava or manto may have flowed. This hole identified the importance of doing more detailed geological and geo-physics work before returning to drilling at Golcuk. This work Pasinex will undertake later in 2013.

The drill holes in the main Golcuk target area are shown in Figure 2 below. They also clearly show the mineralized “manto”.

Then in June this year, Pasinex announced the important new outcrop find called Gol-cuk South. Pasinex discovered over an area of about 700 meters by 300 meters many rock samples carrying Cu that assayed from about 1.0 % Cu to 7.0 % Cu. This was a large outcropping that gave Pasinex some indica-tion of the possible presence of the “manto” or the Basaltic Cu deposit some distance away from where the exploration had to date been focused (actually about 2 ½ kms dis-tance from the Golcuk main zone).

This new outcropping area potentially en-larges the reach of the Cu mineralization at Golcuk. A lot more work has to yet be done to confirm that that is another Basaltic Cu mineralization (or not) but the signs to date indicate that this could well be another area of the same type mineralization. If this is seen to be the same then the potential for an economic deposit at Glcuk has improved.

So, Pasinex believe they have a very good prospect with the Golcuk Cu deposit. This year, our understanding of the geology has improved significantly and has enhanced our go-forward exploration strategy. The next steps for Pasinex at Golcuk are to understand a lot more about the Golcuk South area, to carry out geophysics work in order to better understand the geological structure of the region and then, armed with all this information to return to drill-ing. Stay tuned for further updates on this exciting project.

Steve WilliamsPresident and CEO of Pasinex Resources Ltd.

Steve is the President and CEO of Pasinex Resources Limited. He gra-duated with a Bachelor of Applied Science (Extractive Metallurgy) from the Western Australian School of Mines and an MBA from Tulane University and has worked in the mining industry since 1976 in mil-ling operations in Australia and Ca-nada. He worked 20 years with SGS Lakefield Research in Canada and Chile in both metallurgical project management and business manage-ment, finally becoming Managing Director for SGS Canada.

inside

www.ZIMTU.com- 4 -

INTERVIEW

LAKeLAnD: STRATeGIC ASSeTS In ATHABASCA BASIn“THE OPPORTUNTY LIES IN THAT WE START AT A TRUE START UP VALUATION OF 2.5 MILLON”

Question and Answer Session with Roger Leschuk, Corporate Communications Mana-ger at Lakeland Resources (LK.V)

I had a chance to catch up with Roger Le-schuk, Corporate Communications Manager at Lakeland Resources (LK.V) to hear his thoughts on the Athabasca Basin and why he thinks his projects are the ones to watch.

SO: As a new entrant into the uranium space, introduce us to Lakeland Resources.

RL: Lakeland Resources is a new pure play uranium exploration company focused en-tirely on the Athabasca Basin in Saskat-chewan. We have just begun the process of building the company and we are assemb-ling a strong management group and tech-nical team with a track record of discovery.

SO: Why are investors focused on the Atha-basca Basin?

RL: One of the biggest factors driving in-terest into the Athabasca Basin currently has been the recent discovery of high gra-de uranium at Patterson Lake South (PLS) by Fission Uranium (TSXv: FCU) and Alpha Minerals (TSXv: AMW). The discovery, in an underexplored region on the southern end of the Basin has taken Alpha from around C$0.20 per share to C$7.25 in less than 12 months (Fission is up over 300 % as well) and the combined market capitalization of Alpha and Fission now exceeds C$350 mil-lion. The discovery along with others in the Basin over the last several years have shown that there is still a great opportunity for new discoveries to be made in the Basin and the juniors with new thinking and more of an entrepreneurial spirit are best situated to make them.

SO: Tell me a little bit about your flagship property and plans.

RL: Our flagship property is Riou Lake, which is located on the northern end of the Basin. When Fission and Alpha made their discovery at PLS several companies started to stake in the south around the area of the discovery. With Riou Lake we took a step back and noti-ced that based on regional magnetics and geology the same positive factors that gave rise to PLS were repeated to some extent on northern end of the Basin.

Once we focused in on Riou Lake the area was particularly attractive to us because there was a wealth of historic exploration for

the property that had yet to be followed up in a serious way, several targets had already been identified for drilling, and depths to the known targets were relatively shallow which is critically important in our project selection. There were also boulders in the region of the property with up to 11.3 % uranium of which the source still has yet to be identified. We were picking up on a lot of historic data that is quite attractive to our team. Our initial priority at Riou Lake will be the Gibbon’s Creek Target. This fall

we will be doing the necessary field work to further prepare the target for drilling which will include some combination of prospec-ting, ground geophysics, soil geochemistry and radon surveys which will be followed by a drill program.

SO: What differentiates Lakeland from the other juniors in the Basin?

RL: Currently, the company has about 22 million shares fully diluted and manage-ment and insiders have more than 40 % of that. So we have a good share structure with high insider ownership. Secondly, I would say the quality of the properties and the projects we have acquired. Thirdly, and most importantly the people who are in-volved with Lakeland Resources; from our advisory board through to our management. Our Advisory Board includes people like Tom Drolet, a uranium and nuclear industry

specialist and Rick Kusmirski, former Ex-ploration Manager for Cameco Corporation (TSX: CCO) and later President of JNR Re-sources that was acquired by Denison Mi-nes Corp. (TSX: DML) in February of 2013.

Dahrouge Geological Consulting Ltd. will be handling all the field work and their track record is impeccable. Of the last four ma-jor finds in the Athabasca Basin Dahrouge Geological has been instrumental in the last two. We like that kind of a track record.

Also as Lakeland is a new company it cur-rently has a start-up valuation of approxi-mately C$2.5 million. Our peers in the Basin include NexGen Energy Ltd. (C$50 million), Azincourt Resources Inc. (C$8.1 million) and Forum Uranium Corp. (C$7.8 million). So we currently present good value for investors.

SO: What do you expect in terms of news flow for the next 2-3 months?

RL: There will quite a bit going on over the next 2-3 months; everything from the work in the field, what the progress is all along the way, to getting the drills turning. As well, we will keep the investors informed of any additions and changes that will be going on in regards to the management side and we are continuing to review and acquire assets as they become available.

SO: Thank you, Roger, for your time.

At a glance: Lakeland’s projects in the Athabasca Basin

inside

www.ZIMTU.com- 5 -

FROM THE CEO‘S DESK

PRIMA FLUoRSPAR PRoVIDeS WHAT InVeSToRS WAnTLETTER OF INTENT WITH FIREBIRD MANAGEMENT TO ACQUIRE DELGERKHAN MINE

In today’s market, more than anything else in-vestors want to hear two magic phrases, “near-term production” and “cash flow”. Investors value a self-funding company above all else. At the same time investors never want to lose the “blue sky” of mineral exploration.

Prima is now in the position to fulfill invest-ors’ aspirations.

Prima recently signed a Letter of Intent with Firebird Management LLC to acquire their Delgerkhan Fluorspar mine. With this transaction, Prima would satisfy the mar-ket’s craving for “near-term production” and “cash flow”. Prima can potentially be a fluorspar producer within 12-18 months with sales and cash flow soon to follow. Ac-companying this transaction will be a major financing primarily focused at strategic in-vestors with a long term interest in fluorspar.

As for exploration “blue sky”, our flagship Liard Fluorspar property in Northern British Columbia retains all its exploration upside. We are also in final negotiation for some extremely high-grade fluorspar exploration properties in United States which does not have any commercial fluorspar mines.

Our acquisition target, the Delgerkhan Fluorspar Property hosts one of Mongolia’s largest fluorspar deposits with 90,000m of Soviet drilling completed between 1960 and 1990. The Delgerkhan mine had con-tinuous operation until 2008. In 2011 Fire-bird assumed control, restructured manage-ment and conducted confirmatory drilling of the resource. In August 2012, Micromine Proprietary Limited - a well-respected Aus-tralian company - completed a 43-101 re-source estimate with an historic resource estimate of 6.6 million tonnes indicated and 3.0 million tonnes inferred fluorspar at an average grade of 33.7 %.

Delgerkhan was one of the largest fluorspar mines in the world. At the height of produc-tion Delgerkhan produced 170,000 tonnes of fluorspar/year. The short term remedi-ation and development of the Delgerkhan mine could potentially put Prima in the forefront of future global fluorspar produc-tion and distribution. We are already in dis-cussion with potential end-users in China.

Another huge benefit for Company is that Firebird will become Prima’s majority share-holder. Prima will have the financial support

of Firebird, a major hedge fund which has generated massive returns for its investors.

Firebird Management is globally recognized as a top-ten hedge fund. Founded in 1994, Firebird is an emerging markets private equity fund that originally focused on in-vestment in the privatization of Russia and the Balkans following the collapse of the Soviet Union. In recent years Firebird has focused on Mongolia through their Mongo-lia Fund. The Delgerkhan Fluorspar Mine is one of their major assets.

James Passin, portfolio manager of the Fire-bird Mongolia Fund will join Prima as Chair-man. Firebird is legendary in the industry having generated net cumulative returns of 4,534 % and 2,357 %. Not only is James highly respected in the market – he was named “Fund Manager of the Year” at the 2012 Hong Kong Mines and Money confer-ence. He is also very active in the fluorspar space, familiar with the producers, suppli-ers and end-users. Having James as part of our team is an immense asset from both the financial and operational perspective.

Prima is positioning itself to become a ma-jor global fluorspar producer and supplier to both the Asian and North American mar-kets. We will employ exploration/develop-ment and acquisition of leading fluorspar assets.

Our flagship property, the Liard Fluorspar Project remains a critical focus of the com-pany. It has a similar high grade to the Del-gerkhan Fluorspar Mine of 32 %. It has an historic resource of 3,000,000 tonnes with easy access to the Alaska Highway.

Responding to investors, we are actively in-vestigating options to bring this asset into near-term production. We believe it may be possible to proceed with quarry-type mining.

We are also in the final stages of negotiat-ing innovative agreements with the Kaska First Nation which would provide significant benefits to both parties and put us both on the same side of the table.

In summary, I believe that Prima is on the cusp of becoming the major fluorspar com-pany in the world. Once this transaction with Firebird is complete, we will be close to production and cash-flow. At the same time, we will retain the exploration upside through our Liard property and other highly

sought after fluorspar properties which we are in process of acquiring.

Historical Data Regarding the Delgerkhan Fluorspar Mine: The Micromine technical report is very recent and no additional work has been done on the Berkh Uul proper-ties since the completion of the report. We therefore consider that the report is very reliable and very relevant. However, as the report was not prepared for Prima, it is re-quired under NI 43-101 to be updated.

Historical Data Regarding the Liard Fluor-spar Property: Prima Fluorspar Corp. has not undertaken an independent verification to classify the historic resource estimate quoted from a Mineral Potential Compila-tion Report for the BC Department of Eco-nomic Development, written by Wright Engineers Limited and H.N. Halvorson Consultants Ltd., in January 17, 1975 as a current mineral resource. But the issuer believes the information to be relevant and reasonably reliable.

Robert BickCEO Prima Fluorspar Corp.

From 2007 to 2010, Robert Bick served as CEO and Executive Chairman of Evolving Gold Corp. www.evolvinggold.com. Having served as Officer and Director with several junior resource companies, Robert has a comprehensive un-derstanding of the requirements of building junior public companies from the early stages.

inside

www.ZIMTU.com- 6 -

INTERVIEW

WPX STRIKeS LAnDMARK DeAL WITH A CHIneSe PARTneRWHILE FUNDING HAS BECOME DIFFICULT- THE COMPANY RECEIVED 31 MILLION DOLLARS

Potash Power Plays: Russia and China Act Boldly Marc Davis, a financial news reporter for BNWnews.ca and former investment in-dustry mining analyst, discusses the future of the junior potash sector with John Costi-gan, Vice President of Corporate Develop-ment for Vancouver-based Western Potash Corp. (TSX: WPX).

MD: Just recently, potash stocks took a big hit across-the-board with the announce-ment that Russia has decided it may sig-nificantly undercut the current price floor of around $400 a tonne for potash by 25 percent or more. Why is this and what does it mean for the global potash industry?

JC: The long-term fundamentals for the potash business suggest there will be very healthy growth well into the future. At Wes-tern Potash, we believe that lower potash prices in the near term will logically stimu-late demand that should translate into sus-tainable returns in the long run.

That all said, there’s a current oversupply of potash in the short-term. And we see that reflected in Potash Corp having scaled back its business with mine closures. But they do that on a regular basis in terms of managing the demand/supply ratio. In other words, they’re always cutting back when they need to, in order to support the price of potash.

MD: There’s been a very pronounced down-turn in the mining sector over the past two years as the global economic recovery con-tinues to remain quite anemic. This correc-tion has hit precious metals developers and producers particularly hard. Has this also been the case for emerging potash projects in Canada?

JC: Again, regardless of the Russian situ-ation we are still seeing expansion in the fertilizer sector. In fact, global potash consumption is predicted to increase. But we’re seeing a contraction in the mining companies entering the potash sector. In-dustry players like BPH, Vale, and Rio Tinto are pulling back, partly because of their ex-posure to iron. By which I mean, they’re un-able to fund some of these capital-intensive projects. So they can’t really open up new markets when their conventional markets are falling apart with them posting lower returns in the iron ore business.

Removal and/or substantial delays of these large in-development capital intensive pro-jects from the line-up will certainly impacts

the supply scenario globally. For instance, if you take an in-development eight million ton-ne-a-year project like Jansen out of the future supply scenario, you now have room for up to three projects the size of Milestone. Hence, we believe potash supply/demand fundamen-tals will be balanced going forward.

We also believe that lower prices implied in the most recent news out of Russia will hit the near term market and that the pri-ce really only needs to find the level that discourages new entrants in order for it to have a strategic effect. This will also impact supply demand ratios. High-cost operators and projects of course are most at risk. But it’s worth noting that Milestone has been engineered as a low-cost producer with a relatively high volume of output, and will not be impacted by this particular move in the long term.

MD: In North America, funding for potash juniors and other in-development mineral projects has dried up. Canadian investment banks in Toronto and Vancouver have be-come risk-averse over the past two years in response to a cyclical downturn in the mining industry. How has Western Potash responded to this development?

JC: Before this downturn took hold and essentially paralyzed much of the mineral development sector, Western Potash started talking to end users of potash in Asia to see if we could partner-up with a deep-pocketed player that could finance the development of the Milestone project in return for a piece of the action. And we selected a credible Chinese company that has committed to the process of making our Milestone Potash mine a reality. The company is called Chi-na BlueChemical Ltd. And it’s a significant player in China’s fertilizer industry. In fact, it generated nearly $2 billion in sales in 2012.

MD: Why exactly did Western Potash choo-se China BlueChemical as a joint venture partner? In other words, what is it about this particular company that is compatible with Western Potash’s mandate?

JC: China BlueChemical is a fertilizer pro-ducer that not only produces but also dis-tributes nitrogen and phosphate throug-hout China. But they don’t’ have their own potash supplies and the ability to provide that NPK fertilizer product. So our future together fits very well with their needs to

grow as a company and a complete fertili-zer solution distributor. There are also other significant entities that are interested in partnering with us and want to participate in future potash sales off-take agreements. This is an incredible vote of confidence, gi-ving us a very clear direction forward.

Furthermore, the CEO of China BlueChemi-cal has now joined our board of directors. This we think is a very important move as it signals another tremendous vote of confi-dence in terms of their participation in the Milestone project. A signal like that would suggest to us that China Blue is serious about building this mine.

MD: What is so compelling about your Mi-lestone project that China BlueChemical wants to be a part of its future success?

JC: Our Milestone Project in Saskatchewan is now among the most advanced indepen-dent undeveloped potash asset in the world.

John CostiganWestern Potash Corp.

John Costigan leads the cor-porate development team at Western Potash Corp. The com-pany is developing a world-class 226 million-tonne potash deposit that is capable of yielding up to 2.8 million tonnes of potash per annum at pre-tax mining costs of around $ 62 per tonne for at least 40 years (based on its feasibility study).

inside

www.ZIMTU.com- 7 -

And it sits at the heart of the richest potash fields in the world. So the endorsement of Milestone by China is an indication that the necessary capital for big-scale mining project is still very much available through China. On this note, it’s worth mentioning that China BlueChemical is a subsidiary of CNOOC, an oil-producing flagship SOE that operates in international markets.

This approval of this investment is a tre-mendous endorsement of the Milestone project. The first step of course was the sig-ning of the strategic investment agreement for $32 million, which of course doesn’t make a dent in the financing of the mine. And it’s not meant to. Instead, it’s meant to allow us to pave the way for the major investment which is forthcoming once we finalize the business agreement between China BlueChemical and us and other al-lied partners that we’ll need to bring on to spread the risk in terms of who will partici-pate in the off-take agreement.

MD: What’s the ultimate payoff for China BlueChemical?

JC: What they get is a technically de-risked project in Milestone. It is in a fantastic, pro-ven jurisdiction, with enviable development infrastructure in place and if our feasibility studies are correct, one of the lowest cost producers in the region. This makes the project more resistant to market price fluc-tuations.

That being said, we may look at bringing on additional partners to complete to total out-put of the off-take in order to further spread the financial risk.

MD: What kind of timeline are we talking about for the building of a 2.8 million ton-ne-a-year mine at Milestone?

JC: Once we complete the major transaction by getting the initial capital infrastructure monies in the bank, then we can finish all the bridge engineering work that begins to contemplate breaking ground for building the mine. That process can take some time, as the participants in the financing have to get very comfortable with the financing risk. Putting together the mine financing syndi-cate and joint venture to build the mine is the next major milestone for us.

MD: Why is it important to China to help bring into existence a mine at Milestone?

JC: Potash has been identified as a strate-gic asset for China’s burgeoning agriculture sector. Yet it seems that China will never be able to produce more than 60percent of its overall potash needs. So China will have

to continue to import about 40 of its po-tash needs. Thus, the Chinese are focused on securing long-term potash supplies be-cause it’s an indispensible ingredient in fer-tilizers. Not only does it significantly boost crop yields, but it also ensures meaningful cost containment. In which case, farmers need to significantly increase their use of potash-based fertilizers. The solution is to capitalize on Canada’s potash riches and its political stability via direct ownership.

MD: Do you foresee an increase in fertilizer applications in China to boost crop yields for a fast-growing population that is increa-sing demanding feed-intensive animal pro-tein?

JC: They’re currently under-applying their potash application. So they need to balan-ce that fertilizer use. By which I mean that over-application of phosphate and nitrogen which can leach into the soil and into the water table, which is detrimental to the en-vironment. This can be remedied by using less of these minerals with the addition of potash. Which remarkably improves fertili-zer efficiencies.

China is also increasing their agricultural land base by bringing back land that has been out of production for some time. For these reasons, they need to create more yield per acre.

MD: Is Western Potash in the process of incrementally becoming a foreign-owned company?

JC: We will always be a Canadian company in many different ways. We will always have Canadian management. The company will also continue to be a Canadian-regulated TSX-listed company that’s governed by Ca-nadian laws and regulations.

It’s also worth noting that the province of Saskatchewan will reap all the benefits in terms of job, taxes, and of course our com-mitment to being a good corporate citizen.

MD: Is it too late for new investors to benefit from Western Potash’s future success?

JC: We’re trading at a significant discount in the marketplace with a market capitali-zation of less than a $100 million. And in light of the fact that we’re building a $3 bil-lion mine that promises to be a very lucra-tive business venture for decades to come, there’s a lot of room for improvement in the share price.

Long-term investors should take note of this fact, especially since we’re no longer an ex-ploration company. I believe that most of the hype is out of the potash sector now. We’re now moving into the development space. Also, we also have a clear sense of direction in terms of future funding and how we’re going to build the Milestone mine. But in-vestors need to be patient. Those who can see this opportunity could be well-rewarded over time.

MD: Thank you, John, for your time.

A big moment to celebrate: meanwhile the work with the Chinese partners has begun.

inside

www.ZIMTU.com- 8 -

ZIMTU NEWS

ZIMTU UPDATeTSX.V: ZC . FSE: ZCT1 . WKN: A0RDR9

UPDATe on PoRTFoLIo CoMPAnIeS

SHoRT FACTS:Shares Outstanding: ~11.2 mio.

Shares Fully Diluted: 12.6 mio.

52 Week High: 1.49 CAD

52 Week Low: 0.37 CAD

Market Cap.: ~5.0 mio. CAD

Cash & Securities: ~7.4 mio. CAD

PoRTFoLIo AnALYSIS:Top 5 Positions: 48,42 %

Western Potash (TSX: WPX) 15,20 %

Prima Fluorspar Corp. 10,11 %

Pasinex Res. Corp. (CNSX: PSE) 7,01 %

Jack‘s Fork Corp. (private) 4,71 %

Pacific Potash Corporation 4,28 %

NAV of Top 5: ~3,6mio. CAD

Total Positions: >50*As of September 2nd, 2013

PAC. PoTASH CoRP. (TSXV: PP)STRATEGIC DEAL AHEAD

On August 27, 2013, Pacif-ic Potash Corp. entered into an agreement in principle to merge with Cowley Mining Plc. If completed, the merger will make Pacific Potash the second-largest landholder in the Amazonas Potash Basin. The combined company also intend to raise up to $12-mil-lion in equity financing for the development of its asset. Cowley‘s landholdings could potentially host expansive pot-ash deposits based on historical data and based on recent dis-coveries found within the basin; Part of Cowley‘s landholdings are immediately adjacent to Brazil Potash.

CoMMeRCe ReSoURCeS CoRP. (TSXV: CCe)METALLURGY IMPROVED

On August 13th, Commerce Resources released addition-al results from the on-going metallurgical programs for the Ashram Rare Earth Element Project in northern Quebec. The new results confirm the ability to produce a >45 % mixed REE mineral concen-trate with an average mass reduction of 94 %. The PEA (July 2012) was based on the production of a 10 % mixed REE concentrate with a mass reduction of 87 %. CEO Dave Hodge states:

“In terms of benchmarking amongst other rare earth pro-jects in development, con-firming the ability to concen-

trate to such a high degree, along with such a significant reduction of mass, identi-fies the Ashram Deposit as a leader.

Having mineralogy which has a history of successful commercial processing is absolutely critical in this in-dustry, and Ashram with its sheer size, grade, balanced rare earth distribution, and overall mineral concentrate grades achieved to date, show that this deposit is well positioned to enter produc-tion at a level which will have a meaningful impact in the light, middle, and heavy REE supply chain.”

neW ZIMTU ReSeARCHFIRST EDITION RELEASED

Zimtu Capital Corp. has re-cently started to provide re-search and opinion to better inform Zimtu shareholders and the market on key holdings within the Zimtu portfolio. The Zimtu board is pleased to introduce Derek Hamill who will be in charge of our re-search. Derek will have access to an array of experienced and knowledgeable industry pro-fessionals. Zimtu’s circle of industry contacts includes all aspects of the mineral explora-tion and development process; from first acquisition of min-eral claims right through to production. Derek’s upcoming research will be on Lakeland Resources.