- Internal restructuring to facilitate future financing of the
Prairie Creek Mine
- Name to be changed to NorZinc Ltd.
CZN-TSX
CZICF-OTCQB
VANCOUVER, May 29, 2018 /CNW/ - Canadian Zinc
Corporation (TSX: CZN; OTCQB: CZICF) ("Canadian Zinc" or the
"Company") announces that at its upcoming Annual General and
Special Meeting to be held on June 27,
2018, shareholders will be asked to approve a statutory
Arrangement to reorganise the Company into a separate
publicly-listed holding corporation, to be named NorZinc Ltd., and
a directly held, wholly-owned, operating subsidiary.
Currently the Company's flagship asset, the Prairie Creek
Zinc-Lead-Silver project, is held directly by the public company
Canadian Zinc Corporation. The objective of the arrangement
is to structure the assets of the Company to facilitate future
project financing of the Prairie Creek project.
Discussions to date with financial institutions have confirmed
that the opportunity of raising project debt financing to complete
the development and construction of the Prairie Creek mine would
require that the Prairie Creek project be held in a separate
stand-alone entity, and that the public parent company be
structured to act as project sponsor.
Management determined that the proposed Arrangement, which will
create a new holding company, to be named NorZinc Ltd., while
leaving all the Prairie Creek property, assets, agreements and
permits in place held in a wholly-owned subsidiary, is the most
efficient way to accomplish this objective.
If the Arrangement is approved and completed, all the shares of
Canadian Zinc will be exchanged for shares of NorZinc, on a
one-for-one basis, and there will be no impact on a shareholder's
ultimate economic interest.
It is anticipated that the shares of NorZinc will trade on the
TSX under the existing symbol, "CZN" and will trade on the OTCQB
under the existing symbol, "CZICF".
Shareholders as of the record date of May
18, 2018 (the "Record Date") will be eligible to vote at the
AGM. Meeting materials including the Company's Management
Information Circular, will be available on the Company's website
and mailed to all shareholders as of the Record Date on or after
May 31, 2018.
Prairie Creek Project
In September 2017, Canadian Zinc
announced the results of its 2017 Feasibility Study ("2017 FS")
which contemplates a mine life of 15 years resulting in
$3 billion in net revenue and
$1.3 billion in earnings before
interest, taxes, depreciation and amortization ("EBITDA") over the
life of the mine and pre-tax Net Present Value ("NPV") of
$344 million, using an 8% discount
rate, with an Internal Rate of Return ("IRR") of 24% (post-tax NPV
of $188 million and an IRR of 18%)
and using base case metal price forecasts of US$1.10 per pound for zinc, US$1.00 per pound for lead and US$19 per ounce for silver with a foreign
exchange rate of CA$1.25=US$1.00.
A Technical Report prepared in accordance with National
Instrument 43-101 Standards for Disclosure for Mineral Projects
reporting the results of the 2017 Feasibility Study was filed on
SEDAR on October 31, 2017.
For 2018, specific programs are being planned to further de-risk
the Prairie Creek Project, which will include detailed engineering
and design of the mine facilities, rehabilitation of equipment and
accommodations, hydrological investigations and initial
site/underground preparation.
About Canadian Zinc
Canadian Zinc is a TSX-listed exploration and development
company trading under the symbol "CZN". The Company's key project
is the 100%-owned Prairie Creek Project, an advanced-stage
zinc-lead-silver property, located in the Northwest Territories. Canadian Zinc also owns
an extensive land package in central Newfoundland that it is exploring for
copper-lead-zinc-silver-gold deposits.
Qualified Person: Alan
Taylor, P.Geo., Vice President of Exploration, Chief
Operating Officer and Director of the Company, who is a
Non-Independent Qualified Person as defined in National Instrument
43-101 – Standards of Disclosure for Mineral Projects
("NI 43-101"), has prepared, supervised the preparation of
or reviewed, the parts of this News Release that are of a
scientific or technical nature.
Forward-Looking Information
This news release contains certain forward-looking
information, including, among other things, the closing of the
equity financing and the expected completion of the advancement of
mineral properties. This forward looking information includes, or
may be based upon, estimates, forecasts, and statements as to
management's expectations with respect to, among other things,
regulatory and shareholder approval of the financing, conditions of
the financing being met, the issue of permits, the size and quality
of mineral resources and reserves, future trends for the company,
progress in development of mineral properties, future production
and sales volumes, capital costs, mine production costs, demand and
market outlook for metals, future metal prices and treatment and
refining charges, the outcome of legal proceedings, the timing of
exploration, development and mining activities, acquisition of
shares in other companies and the financial results of the company.
There can be no assurances that such statements will prove to be
accurate and actual results and future events could differ
materially from those anticipated in such statements.
Cautionary Note to United States Investors
The United States Securities and Exchange Commission ("SEC")
permits U.S. mining companies, in their filings with the SEC, to
disclose only those mineral deposits that a company can
economically and legally extract or produce. We use certain terms
in this news release, such as "measured," "indicated," and
"inferred" "resources," which the SEC guidelines prohibit U.S.
registered companies from including in their filings with the
SEC.
Statements about the Company's planned/proposed Prairie Creek
Mine operations, which includes future mine grades and recoveries;
the Company's plans for further exploration at the Prairie Creek
Mine and other exploration properties; future cost estimates
pertaining to further development of the Prairie Creek Mine and
items such as long-term environmental reclamation obligations;
financings and the expected use of proceeds thereof; the completion
of financings and other transactions; the outlook for future prices
of zinc, lead and silver; the impact to the Company of future
accounting standards and discussion of risks and uncertainties
around the Company's business are not guarantees of future
performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Therefore, the Company's
actual results could differ materially and adversely from those
expressed in any forward-looking statements as a result of various
factors. You should not place undue reliance on these
forward-looking statements.
The Company cautions that the list of factors set forth above
is not exhaustive. Some of the risks, uncertainties and other
factors which negatively affect the reliability of forward-looking
information are discussed in the Company's public filings with the
Canadian securities regulatory authorities, including its most
recent Annual Report, quarterly reports, material change reports
and news releases, and with the SEC. In particular, your attention
is directed to the risks detailed therein concerning some of the
important risk factors that may affect its business, results of
operations and financial conditions. You should carefully consider
those risks, in addition to the other information in the Company's
filings and the various public disclosures before making any
business or investment decisions involving the Company and its
securities.
The Company undertakes no obligation to revise or update any
forward-looking statement, or any other information contained or
referenced in this News Release to reflect future events and
circumstances for any reason, except as required by law. In
addition, any forecasts or guidance provided by the Company are
based on the beliefs, estimates and opinions of the Company's
management as at the date of this News Release and, accordingly,
they involve a number of risks and uncertainties. Consequently,
there can be no assurances that such statements will prove to be
accurate and actual results and future events could differ
materially from those anticipated in such statements. Except as
required by law, the Company undertakes no obligation to update
such projections if management's beliefs, estimates or opinions, or
other factors should change.
SOURCE Canadian Zinc Corporation