Canadian Zinc Reports Financial Results for First Quarter 2014
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 16, 2014) -
- Prairie Creek Mine Undergoing Optimization to Enhance
Efficiencies, Lower Costs and Shorten Development Time Line
- Encouraging Drill Results at South Tally Pond - Additional
Drilling Planned for Newfoundland Projects
Canadian Zinc Corporation (TSX:CZN)(OTCQB:CZICF) ("the Company"
or "Canadian Zinc") reports its financial and operating results for
the quarter ended March 31, 2014 and provides outlook on 2014
activities.
This press release should be read in conjunction with the
unaudited consolidated financial statements and notes thereto for
the quarter ended March 31, 2014, and management's discussion and
analysis ("MD&A") for the quarter ended March 31, 2014, both
available on SEDAR at www.sedar.com.
Financial Results for First Quarter 2014
For the three month period ended March 31, 2014, the Company
reported a net loss and comprehensive loss of $2,027,000 compared
to a net loss and comprehensive loss of $4,673,000 for the three
month period ended March 31, 2013. The net loss in the three month
period ended March 31, 2014 included a gain of $120,000 on the
Company's marketable securities compared to loss of $2,319,000 for
the comparative period.
At March 31, 2014, the Company had a positive working capital
balance of $9,235,000 including cash and cash equivalents of
$5,775,000, short term investments of $2,011,000 and marketable
securities of $1,448,000 (for a total of $9,234,000). At December
31, 2013, the Company had cash and cash equivalents of $8,376,000,
short term investments of $2,005,000, marketable securities of
$1,328,000, and a positive working capital balance of
$10,617,000.
Prairie Creek Mine
The primary objective of the Company is to bring the Prairie
Creek zinc/lead/silver mine into production at the earliest
opportunity and in pursuit of that objective secure the necessary
capital funding to rehabilitate, upgrade and develop the Mine,
inclusive of the processing plant and related site
infrastructure.
To further build on and refine the Pre-Feasibility Study ("PFS")
completed by SNC-Lavalin Inc. in 2012 CZN has engaged in an
Optimization Study with a view to augmenting what has already been
completed during and after the PFS. Further advancement of
engineering designs, detailing and assessing what existing
equipment can be utilized, determining upgrade requirements,
exploring more efficient financial ways to reduce initial capital
costs. A number of bid tender documents relating to various work
packages needed to develop the mine have been distributed in order
to confirm the detailed plans and design and actual costs for
developing the mine into production.
As a lead up to the Optimization Study, in November 2013,
Canadian Zinc engaged AMC to undertake an underground optimization
study of the mine plan with a view to reducing the initial
development, shorten the development schedule and minimize mine
operating costs.
In January 2014, the Company engaged Tetra Tech ("TT") to
provide technical services for basic engineering and procurement
services for the development of major equipment packages, facility
rehabilitation and repair work and capital items for the Prairie
Creek Mine. Specifically these technical services will develop
tender packages for mine rehabilitation and development; mill
completion, power generation and distribution; heat recovery
systems; a dense media separation plant; a paste fill plant; a
water treatment plant; instrumentation and control systems; camp
construction and winter road construction and maintenance needed to
put the Prairie Creek Mine into production.
Canadian Zinc and TT have now issued a number of mine site
packages for competitive tender to qualified bidders, giving full
recognition to opportunities for participation by local First
Nations and adjacent communities.
The tendering and procurement process, managed by TT, is an
important phase of the Prairie Creek project that will refine and
augment the design work completed previously and will generate
definitive estimates of the capital cost and schedules, and in turn
reduce contingency factors, required to place the Prairie Creek
Mine into operation.
The Prairie Creek Mine site is scheduled to be re-opened at the
end of May 2014 in order for ongoing care and maintenance programs
to be conducted along with some pre-development and road work
programs that can be completed during the summer season.
Newfoundland Properties
A winter diamond drill program on the South Tally Pond property
was completed in March 2014 on the South Tally Pond
copper-lead-zinc-silver-gold project in central Newfoundland. The
South Tally Pond project is located adjacent to and in the same
volcanic belt as the Duck Pond copper and zinc mine and mill
complex operated by Teck Resources.
Six drillholes, totaling 2,350 metres were completed at the
Northwest mineralized zone located 250 metres northwest of the
drill-defined Lemarchant Deposit. The 2014 winter drilling program
successfully extended the Northwest zone mineralization which
remains open for further expansion. Highlights of the 2014 winter
drilling program include:
- Drillhole LM14-95 (Section 106+50N), located 30 metres up-dip
of drillhole LM13-94, intersected two semi-massive sulphide
intervals between 315 and 400 metres downhole. Significant assays
included 4.8% zinc, 0.3% lead, 0.5% copper, 24.3 g/t silver and 0.9
g/t gold over 2.5 metres.
- Drillhole LM14-96 (Section 106+50N), located 30 metres up-dip
of drillhole LM14-95, intersected semi-massive to massive sulphides
with massive barite (14 metres) between 303 and 321 metres downhole
Significant assays include 7.0% zinc, 4.3% lead, 0.4% copper, 62.1
g/t silver and 0.7 g/t gold over 1.5 metres.
- Drillhole LM14-97 (Section 105+50N) located 35 metres down-dip
of LM13-82, intersected a mineralized massive barite interval
between 357 and 361 metres downhole. Significant assays include
90.5 g/t silver and 1.4 g/t gold over 3.5 metres.
- Drillhole LM14-99 (Section 106+50N), located 40 metres up-dip
of LM14-96 intersected a thick sequence of iron-rich mudstones and
felsic volcanic rocks with anomalous base and precious metals
between 224 and 249 metres downhole.
- Drillhole LM14-100 (Section 107+00N), located 50 metres north
of LM13-94, intersected disseminated to semi-massive stringer
pyrite mineralization between 314 and 364 metres downhole with
anomalous base and precious metals over two, 13 metre
intervals.
The sulphide mineralization and barite intervals in the
Northwest zone are commonly underlain by a moderate to intensely
altered felsic volcanic footwall stratigraphy, typical of
volcanogenic massive sulphide deposits. These are excellent
indications of a well-developed hydrothermal system that provide
vectors to potential deposits.
The Company is planning a detailed review, structural analysis
and remodeling of the Lemarchant deposit to take into account the
results of the Northwest zone drilling.
Outlook
Canadian Zinc's focus for 2014 will be to advance the Prairie
Creek Project towards production.
The Company is currently undertaking an Optimization Study as
part of which Tetra Tech has been engaged to provide technical
services for basic engineering and procurement services for the
development of major equipment packages, facility rehabilitation
and repair work and capital items for the Prairie Creek Mine. AMC
has been engaged to undertake an optimization study of the
underground mine plan with a view to reducing the initial
development, shorten the development schedule and optimize the
underground mine operating costs.
Geotechnical investigations to determine optimal mining methods
will be completed the first half of 2014. Metallurgical studies,
designed to enhance concentrate production and quality are also
being carried out in 2014 and are part of the Company's concentrate
marketing plan.
The current Optimization Study is scheduled to be completed by
mid-2014 and, dependent on the progress of financing strategies
concurrently being executed, the Company will begin procurement of
long lead time items; construction of the access road; site
preparation and other startup activities on site. The Company is
evaluating strategies for raising the financing necessary to
complete the development and construction of the Prairie Creek
Mine.
A new diamond drill program on the Tulks South property in
central Newfoundland targeting the exploration of the Boomerang
deposit is scheduled to be completed later in 2014. The Boomerang
has NI43-101 compliant indicated resources of 1.36 million tonnes
averaging 0.51% copper, 7.07% zinc, 3.00% lead 110.2 g/t Silver and
1.66 g/t gold and inferred resources of 0.44% copper, 6.72% zinc,
2.88% lead, 96.5 g/t silver and 1/29 g/t gold. The Company is also
undertaking an ongoing exploration drill program at the South Tally
Pond property in Newfoundland targeting the expansion of the
Lemarchant deposit and further exploring the new zone of
mineralization discovered northwest of Lemarchant.
At March 31, 2014, the Company had working capital of $9.24
million and expects it will be able to meet current commitments,
continue its planned 2014 programs and subject to adequate
financing, continue planned 2015 corporate activities.
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, a fully permitted,
advanced-staged zinc-lead-silver property, located in the Northwest
Territories.
The Prairie Creek Project contains a Mineral Reserve of 5.2
million tonnes averaging 9.4% zinc, 9.5% lead and 151 g/t silver.
In addition, Prairie Creek hosts an Inferred Resource of 6.2
million tonnes averaging 14.5% zinc, 11.5% lead, 0.57% copper and
229 g/t silver. (AMC Mining Consultants (Canada) Ltd. J M Shannon
and D Nussipakynova, Qualified Persons, June 2012). A Preliminary
Feasibility Study was completed by SNC-Lavalin in July 2012.
Prairie Creek is an underground operation that will utilize
multiple mining methods to access readily available ore. Canadian
Zinc has the majority of infrastructure in place including a 1,000
tonne per day mill, five kilometres of underground workings and
related equipment, a heavy duty and light duty surface fleet, three
exploration diamond drills and a 1,000 m airstrip.
Canadian Zinc also owns an extensive land package in central
Newfoundland that includes the South Tally Pond project, which
hosts the Lemarchant deposit, the Tulks South project and the Long
Lake project. A detailed and updated database is now being
assembled from which exploration programs will be planned on key
central Newfoundland properties during 2014.
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, has
prepared, supervised the preparation of or reviewed, the parts of
this MD&A that are of a scientific or technical
nature.
Cautionary
Statement - Forward-Looking Information
This press release contains certain forward-looking
information, including, among other things, the expected completion
of acquisitions and 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, the completion of
transactions, the issue of permits, the size and quality of mineral
resources, 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. Mineral resources that are not mineral reserves do
not have demonstrated economic viability. Inferred mineral
resources are considered too speculative geologically to have
economic considerations applied to them that would enable them to
be categorized as mineral reserves. There is no certainty that
mineral resources will be converted into mineral reserves.
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 press 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.
Canadian Zinc CorporationJohn F. KearneyChairman(416)
362-6686(416) 368-5344Canadian Zinc CorporationAlan B. TaylorVice
President Exploration & Chief Operating Officer(604)
688-2001(604) 688-2043Tollfree:1-866-688-2001Canadian Zinc
CorporationSteve DawsonVice President Corporate Development(416)
203-1418(416)
368-5344invest@canadianzinc.comwww.canadianzinc.com
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