ZINC ONE RES INC COM NPV (OTCMKTS:ZZZOF) Has Potential But Caution Is Warranted

ZINC ONE RES INC COM NPV (OTCMKTS:ZZZOF), the Vancouver based company focused on the acquisition, exploration, and development of prospective, and advanced zinc projects, has been on the move recently with massive volume. How do we justify it? On May 16, 2017, the company put out a press release, wherein it was noted that TSX Venture Exchange approved the transaction between ZZZOF and Forrester Metals Inc. (TSX-V: VEM.H). This was a condition for the closing of the merger, thus the market appreciated it.The volume seemed to be very large lately because of this news, and everyone seemed interested in this company. However, a closer investigation by our editor showed that this volume may be due to some other reasons. Read the whole article. We will tell you what is going on. But, first of all, have a look at the price action:SourceBusinessAccording to the latest quarterly report, Zinc One Resources Inc. was founded on January 12, 2007 in Vancouver, BC, Canada. The company used to be called Rockridge Capital Corp., but it changed its name to Zinc One Resources Inc on January 23, 2017. The most important assets owned are the exploration agreements signed in the past:

• Fatu Property: the property option agreement with Bagoe National Corp. was acquired on December 22, 2009. Under this contract, ZZZOF owns 100% interest in Fatou property in Mali, West Africa. In order to benefit from the extraction in this area, the company needs to make payments totaling US$800,000 and complete a minimum of 5,000 meters of exploration drilling during the first year of the term of the agreement.
• Crackingstone Uranium Property: it was acquired on January 12, 2017, and consists of an agreement with St. Jacques Mineral Corp, under which ZZZOF agreed to pay $10,000 and has issued total of 3,375,000 common shares of the Company to this vendor. Additionally, the company will have to expend $500,000 of exploration expenditures within 18 months from the day of the Agreement.
• Scotia Zinc Property: it was acquired on January 24, 2017, and consists of an option agreement with Aldever Resources Inc, under which the company acquired 100% interest in a Zinc project consisting of one mineral claim totaling 4,014 hectares, located in the Scotia River area in British Columbia.

Recent Developments - The acquisition of Forrester Metals Inc.We will focus the article on the transaction with Forrester Metals Inc., as it seems to be the most valuable news. On February 1, 2017, it was put out that the company had entered into a binding agreement to buy Forrester. The idea to justify this transaction is that the zinc price will increase in the future. These were the words contained in the press release:

"Zinc One's proposed acquisition of Forrester is based on a positive outlook for the zinc price and the attractiveness of the zinc assets contained in the Forrester portfolio." Source

Additionally, the CEO of Zinc One, Jim Walchuck, remarked:

"We believe that this transaction is a tremendous step in moving Zinc One towards becoming a zinc producer. Although there are other quality assets in Forrester, it is the high-grade zinc Bongara and Charlotte Bongara properties which will become the flagship project of Zinc One." Source

The details of the transaction were disclosed in the press release. To sum up, the shareholders of Forrester will receive 1 common share of Zinc One for every 5.5 common shares. Additionally, the transaction will need the the approval of at least 66 2/3% of the votes cast on the special resolution by Forrester shareholders and, if required, by Zinc One shareholders also. Furthermore, the following conditions are necessary:

"The Transaction is subject to due diligence by each party, completion of the Private Placement Financing, shareholder approval, applicable regulatory and TSX Venture Exchange approvals and satisfaction of customary provisions. The Transaction is expected to close in the second quarter of 2017." Source

What is the deal? The company acquires assets with large exposure to the zinc markets. As the general outlook of the zinc price is positive, the transaction is also positive for the ZZZOF. Additionally, the merger will make the company bigger. Thus, every time the company releases good news about the transaction's developments, the share price increases. So far, ZZZOF obtained the Forrester shareholders approval on April 25, 2017, the court approval on April 27, 2017, and the TSX Venture Exchange approval on May 16, 2017. Have a look at the market reaction when the announcements were made:SourceStock promotionThe story seems like wonderful investment idea, don't you think so?. Yes, but be careful. Very recently, we made an investigation on this stock, and found out that someone has been sending emails touting the stock. These are some images from the mail:The email tells exactly the same rationale that we could read in the company's press releases. The fact that the new merger will bring exposure to the zinc market is used. Yes, it may be a good idea. But, the share price will not surge, it may take quite a long time and it is never 100% sure, as it is being claimed in the article. Additionally, the company has a market cap. of $32 million. Thus, it is not going to become "one of the major players in the industry":

"Zinc One Resources (OTC: ZZZOF. TSXV: Z) are making all the right moves to become one the major players in the industry – they've recently just signed a deal that could put them in the drivers seat of their entire market!"

On this website, investors can find the most relevant players. Check only the market cap. of one and you will see that the market cap. is much larger. First Majestic Silver, for example, has a market cap. of $1,880 million. The stock promoter was paid to tout the stock. Read the following, and you will understand. It is part of the disclaimer contained in the email:

"We are engaged in the business of advertising and promoting companies for monetary compensation. All content in our releases is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. Neither the information presented nor any statement or expression of opinion, or any other matter herein, directly or indirectly constitutes a solicitation of the purchase or sale of any securities. PTE.la’s sponsored advertisements do not purport to provide an analysis of any company’s financial position, operations or prospects and this is not to be construed as arecommendation by PTE.la or an offer or solicitation to buy or sell any security. PTE.la is owned and operated by PTE LLC. PTE LLC has been compensated Twenty-Seven Thousand Dollars Cash via bank wire transfer by a third party (Sierra Publishing) for a 1 day marketing program regarding ZZZOF. Any compensation received by PTE LLC constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. A third party of PTE LLC may have shares and may liquidate, which may negatively affect the stock price. PTE LLC affiliates may at any time have a position in the securities mentioned herein and may increase or decrease such positions without notice which will negatively affect the market."

Conclusion and final warningZZZOF seems to be a great opportunity as the zinc market is poised for growth. Additionally, the volume increases every time the company releases news about the transaction. Thus, the first reaction is to think that the market is very interested. It seems like easy money, but it is not. There is a stock promoter that has been paid for touting the company. We believe that much of the volume can be justified with the work of this promoter. Hence, be very careful, usually share price declines when the promo dollars dry up. Additionally, when the market gets to know that stock promotion is going on, some market participants may rapidly sell their shares, and the stock price may collapse fast. To sum up, buyer beware. We will be updating our subscribers as soon as we know more. For the latest updates on ZZZOF, sign up below!Disclosure: We have no position in ZZZOF and have not been compensated for this article.