Good Afternoon,

Today GMP Securities put a piece out on Zenyatta Ventures (ZEN.V/ZENYF) which is attached. This is a "prospects to watch' write up not an official research report/buy recommendation....yet. It's nice to see ZEN is officially on the radar of some decent sized broker dealers like GMP/Roth and that list should and will only grow in time and in caliber of firms that cover the stock. This is a good reminder that we are most likely just days to weeks away from the long awaited preliminary economic assessment(PEA) release. The company has a forecast of Q4 2014 for the PEA so it could be another month. However, I think it's probably in the 2-4 weeks away time frame. This will be a big benchmark for the company and long time investors because we'll have detailed 3rd party validation of what we truly have on our hands at Albany.

I will make a guess in terms of what we'll minimally see. GMP spoke of 30,000 tonnes at a 20 year mine life, which is terrific, but ZEN will end up showing a much longer mine life in the end. But, let's be terribly conservative in speculating their cost and sale price of these 30k tonnes per year. My best guess is that we'll see approximately 30k tonnes sold at a minimum of $7,500 per tonne, which costs in the $2k-$2500 per tonne range. Let's use $2,500 so the net margin is $5k per tonne, multiply times 30k tonnes and we see $150,000,000 per year in Cash Flow. That's a serious number for a junior like this and, frankly, it's not only reality it's probably on the very low end. For those interested or for newer subscribers, now's a great time to read the research report I put out on our blog about 1 year ago on Zenyatta:

http://www.goldinvestmentletter.com/zenyattas-potential/

I still stick with that assessment and the analysis in general. Obviously, it will help us tremendously when this is not speculation and we can plug in the numbers from the PEA. But, if Zenyatta, even in 3 years from now were to trade at 10X earnings once producing, we would see a $1.5 Billion market value, or nearly $30 per share. Certainly the company will need to raise $200 million or so for CAPEX on building the mine and we'll see a small raise between now and sometime next year to finance the feasibility study. So, the share structure will be higher than we have now but even if the share count doubled (doubtful), the stock would be trading at $15 in that analogy. I still believe the company will be bought out before needing to go into production themselves.

What's a fair number to pay for 20-50 years of $150MM per year in cash flow?? I don't know exactly but my guess is minimally $500 million, which is what I've always said is the lowest amount the board of Zen should entertain from a potential buyer. That puts the stock just under $10, which is my long term price target. The upside in Zenyatta is still incredible from $2. I would encourage investors to awaken or reawaken to this situation now before, into, and after the PEA. I don't know what the stock will do if the PEA proves my analysis above, but I for one will know for a fact that the stock is a bargain at current prices.