NZC-TSX
NORZF-OTCQB
(All figures are presented in US Dollars
unless otherwise stated)
VANCOUVER, BC, Oct. 21, 2021 /CNW/ - NorZinc Ltd. (TSX:
NZC) (OTCQB: NORZF) (the "Company" or "NorZinc") is
pleased to announce the results of a Preliminary Economic
Assessment ("PEA") for its 100%-owned Prairie Creek Project
("Prairie Creek" or the "Project") in the Northwest Territories, Canada. The PEA
incorporates an updated Mineral Resource Estimate providing an
economic assessment for a 2,400 tonnes per day ("tpd") mine plan
with a life of mine of 20.3 years.
PEA Highlights Include:
- After-tax NPV8% of $299
million using base case metal prices of $1.20/lb zinc, $1.05/lb lead and $24/oz silver (pre-tax NPV8% of
$505 million)
- After-tax IRR of 17.7% (pre-tax IRR of 21.4%) based on initial
Capex of $368 million, including
$35 million of contingency, with
significant opportunity to improve initial costs through cost
optimization
- At recent zinc spot price of approximately $1.50/lb zinc, after-tax NPV8%
increases to US$479 and IRR increases
to 22.8%,
- LOM C1 by-product costs of $0.19/lb Zn and C3 by-product costs of
$0.60/lb Zn (C1 co-product costs of
$0.73/lb ZnEqi and C3
co-product costs of $0.92/lb ZnEq),
placing Prairie Creek in the lowest third of zinc mines once in
operation
- Average annual payable ZnEq production of 261 Mlbs, including
2.6 Moz of average annual silver production, over a 20-year life of
mine, with a payback of 4.8 years
- Total cumulative LOM EBITDA of $2.5
billion; average annual EBITDA of $123 million
- Updated Mineral Resource Estimate includes 9.8 M tonnes of total Measured & Indicated
("M&I") Resources at 22.7% ZnEq, a 15% increase in total
M&I tonnage from the September
2015 Mineral Resource Estimate and 6.4 M tonnes of total Inferred Resources at 24.1%
ZnEq
- Updated definitive Feasibility Study to commence immediately
and will incorporate the investigation of numerous identified
opportunities to add value by optimizing capex and opex input
costs
- Project represents a majorly de-risked project with world-class
potential in one of the most favourable and stable jurisdictions in
the world
"The completion of the PEA is yet another significant
milestone for NorZinc as it showcases the true potential of the
Prairie Creek deposit, demonstrating a robust throughput rate of
2,400 tpd over a long mine life of over 20 years, highlighting the
potential value and benefit this project has to deliver to all
stakeholders," commented Rohan
Hazelton, CEO of NorZinc Ltd. "While the PEA
considers historical data with a reinterpreted mineral resource, it
outlines a solid base-case for management as we continue on the
planned path towards financing and development of the Prairie Creek
Project. The modified permits for the expanded throughput rates are
well underway with approvals expected in late Q1 2022."
"We have identified multiple opportunities for further
operational and economic optimization, which we will continue to
investigate as we move towards the next step of completing an
updated Feasibility Study for the Project, particularly in relation
to input costs relating to both the initial and sustaining capital
and operating costs as well as the ore sorting strategies aimed at
optimizing processing. The fundamentals for zinc, our primary
product, are strong and are enhanced by the recent addition of zinc
to Canada's Critical Mineral List
which highlights the minerals critical to the building of a clean
and digitized economy. Silver is also expected to continue to play
a significant role in the development and financing of the project
as the market demand for silver streams is high."
"Overall, this PEA demonstrates compelling economics which
provides management with greater conviction in early-stage
financing discussions already taking place. And while metallurgy
continues to be a consideration, management is confident in the
quality and marketability of our concentrate. We have strong
interest and demand for our concentrates as recently reaffirmed
with our MOU with Boliden."
Table 1: Highlighted Results from PEA
After-Tax Net Present
Value ("NPV") (Discount Rate 8%)
|
$299M
|
After-Tax Internal
Rate of Return ("IRR")
|
17.7%
|
After-Tax Payback
Period
|
4.8 Years
|
Pre-Production
Capex
|
$368M
|
Sustaining Capex and
Closure Costs
|
$332M
|
Average Annual
Payable Silver
|
2,551 koz
|
Average Annual
Payable Zinc
|
122 Mlbs
|
Average Annual
Payable Lead
|
101 Mlbs
|
Life of Mine
("LOM")
|
20.3 Years
|
Total Resource
Mined
|
17.2 Mt
|
Average ZnEq[i]
Diluted Grade of Mineral Resources Mined
|
17.10%
|
Gross Revenue After
Royalty (LOM)
|
$6,274M
|
After-Tax Free Cash
Flow (LOM)
|
$1,121M
|
Average Annual
EBITDA
|
$123M
|
C1 Costs over LOM
(By-Product)
|
$0.19/lb
Zn
|
C3 Costs over LOM
(By-Product)
|
$0.60/lb
Zn
|
C1 Costs over LOM
(Co-Product)
|
$0.73/lb
ZnEq
|
C3 Costs over LOM
(Co-Product)
|
$0.92/lb
ZnEq
|
Zinc Price - Flat
(LOM)
|
$1.20/lb
|
Lead Price - Flat
(LOM)
|
$1.05/lb
|
Silver Price - Flat
(LOM)
|
$24.00/oz
|
FX Rate
(CAD:USD)
|
1.25
|
The PEA was prepared in accordance with National Instrument
43-101 Standards of Disclosure for Mineral Projects ("NI 43-101")
and led by Ausenco, with contributions from Global Mineral Resource
Services, Mining Plus and F. Wright Consulting.
The reader is advised that the PEA summarized in this press
release is preliminary in nature and is intended to provide an
initial, high-level review of the project's economic potential and
design options. The PEA replaces and supersedes the
Company's previous 2017 Feasibility Study on the project. The
PEA mine plan and economic model includes numerous assumptions and
the use of Inferred Resources. Inferred Resources are considered to
be too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral
reserves, and there is no certainty that the PEA will be realized.
Mineral Resources that are not mineral reserves do not have
demonstrated economic viability.
Table 2: Capital Costs Summary
Capital Cost
Summary
|
Pre-Production
(US$M)
|
Mining
|
$51
|
Site
Preparation
|
$1
|
Process
plant1
|
$41
|
Paste Tailings
Plant
|
$28
|
Surface
Infrastructure2
|
$41
|
All Season Road
(ASR)
|
$89
|
Total Direct
Costs
|
$251
|
Site
Indirects3 (including EPCM)
|
$39
|
Owner's costs -
Operational Readiness & Fuel
|
$25
|
Owner's costs -
Capitalized Pre-production
|
$18
|
Total Directs,
Indirects and Owner's costs
|
$333
|
Contingency
|
$35
|
Total
Pre-Production (Initial) Capital
|
$368
|
Notes to
table:
|
1.
|
Includes dense media
separator, mill building remediation, process plant
upgrade
|
2.
|
Includes site
utilities, process plant mobile equipment, ancillary buildings,
water treatment plant, water storage pond, waste rock pile, winter
road maintenance and management, underground
infrastructure
|
3.
|
Includes construction
indirects, spares and initial fills, freight and logistics,
commissioning and startup, EPCM, vendor assistance
|
Table 3: Operating Costs Summary
Operating Cost
Summary
|
US$/t
Milled
|
Mining
|
$53.97
|
Processing
Costs
|
$26.64
|
Surface Support
Costs
|
$17.55
|
G&A
Costs
|
$12.12
|
Sub-Total
|
$110.28
|
Transport
Costs
|
$57.22
|
Total
|
$167.50
|
The relative economic attractiveness of a project is an
important aspect. Those mine projects which have a lower cost
structure should typically be the first projects to fill the supply
gap. This is best illustrated by the Normal (By-product) C1 Cash
Cost Curve from Wood Mackenzie shown below forecasted for 2027.
This evaluation considers the cash operating costs and accounts for
the by-product credits and includes all mines which are forecast to
be operating in 2027 when Prairie Creek is planned to have been
operating for several years. According to the estimated C1
by-product costs of $0.19/lb Zn in
this PEA, this would place Prairie Creek in the lowest third of all
projected mine operating costs in that year. Thus, with its
low operating cost structure and advanced project status Prairie
Creek is well positioned to fill the requirement for zinc mine
supply.
Opportunities to Enhance Value
Ore sorting test work with designated ore sorting equipment
vendors will be conducted to evaluate amenability of the ore
sorting process option for the Prairie Creek Project. Upon
conclusion of testwork, a trade off study will be performed to
evaluate use of ore sorting as a preferred pre-concentration
method.
Based on the ore sorting test work conducted on similar
lead/zinc deposits there is a possibility that ore sorting will add
value to the project by:
- Reducing operating cost in the pre-concentration circuit
(eliminates the need for the reagents)
- Decreasing capital and operating expenditure in the milling
circuit by rejecting more waste material upfront
- Increase the head grade of material going into the mill.
In the next phase of the project, potential capital cost
expenditure savings could be achieved by:
- Looking into option of purchasing available equipment from
OEM's cancelled orders
- Identifying the vendor that can supply all (or majority) of the
major equipment and bundle up the orders to receive a discounted
pricing.
Exploration Potential
The Main Quartz Vein (MQV) remains a significant exploration
target open to the north and appears to be continuous throughout
the Inferred Resources and with mineralization observed in the Main
Zone. The Stockwork (STK) and Stratabound Massive Sulphides (SMS)
mineralization styles are also underexplored and may harbour
additional opportunities as secondary exploration targets alongside
the typically higher-grade and adjacent MQV targets.
From 2010 to 2012, the Company conducted a deep-hole drill
program of 1,800m along strike past
the northernmost edge of the Inferred MQV resource and intercepted
3.5m of MQV-style mineralization
(refer to Company press release dated Nov
22, 2012). Coupled with the 800m strike length of the existing Inferred MQV
resource, an extensive MQV exploration target horizon remains and
will continue to be a focus for future exploration programs.
MQV-style mineralization has also been identified in Zones 5
through 12, extending approximately 10km to the south of the
Prairie Creek Mine Site. Previous owners held a modest historical
resource in Zones 7 & 8, before returning to the higher-grade
Main Zone, and has since received only intermittent exploration.
The Company also owns the Gate Leases, a set of mining leases to
the west of the mine site which have identified zinc soil
anomalies, and MQV-style mineralization in outcrop.
Sensitivity
The Project is expected to be a robust operation and profitable
at a variety of prices and assumptions. Metal prices used in the
study are based on long-term forecasted estimates. At US$1.20/lb zinc, $1.05/lb lead and $24/oz silver, the Project generates an NPV of
$299M and an IRR of 17.7% on an
after-tax basis.
- At recent spot pricing for zinc of $1.50lb, the Project maintains an NPV of
$479M and IRR of 22.8% on an
after-tax basis.
Table 4: Sensitivity Analysis for commodity
price and foreign exchange
Commodity
Price
|
-10%
|
Base
Case
|
+10%
|
Pre-Tax NPV
($M)
|
254
|
505
|
757
|
Pre-Tax IRR
%
|
15.1%
|
21.4%
|
27.2%
|
Post-Tax NPV
($M)
|
132
|
299
|
461
|
Post-Tax IRR
%
|
12.5%
|
17.7%
|
22.5%
|
|
|
|
|
Foreign
Exchange
|
-10%
|
Base
Case
|
+10%
|
Pre-Tax NPV
($M)
|
329
|
505
|
650
|
Pre-Tax IRR
%
|
16.2%
|
21.4%
|
26.3%
|
Post-Tax NPV
($M)
|
178
|
299
|
395
|
Post-Tax IRR
%
|
13.4%
|
17.7%
|
21.8%
|
Mining
The Prairie Creek project will be accessed via existing adits in
the hillside. The existing adits are to be enlarged to a larger
cross-sectional size to make optimal use of existing
infrastructure.
An updated geological block model for the Prairie Creek project
was processed utilising Deswik© Mineable Shape Optimizer (MSO)
software to identify the economically mineable shapes for the
project. The result is a preliminary mining inventory of 17.2 Mt
for the operation, inclusive of inferred material.
The Prairie Creek orebody has three distinct zones, the MQV, SMS
and the STK zones. Based on the geometry of the mining zones a
Longitudinal Retreat Longhole Open Stoping (LHOS) method was
selected for the MQV and the STK. In the SMS, however, Longitudinal
Retreat Uppers Stoping (LRUS) was selected due to the zone's
geometry. Both mining methods lend themselves to comparatively low
cost, bulk mining that suits the geometry and type of deposit.
The project will produce 2,400 tpd of diluted ore from the
underground workings. A diesel powered, mechanized mining fleet is
currently planned. The operation is also planning to utilize 100%
of flotation tailings for backfill purposes. Ventilation for the
underground workings will be drawn into the portal adits, flow
through the workings and exit the mine via dedicated ventilation
shafts. Mine air will be heated as required at the adit portal due
to the low temperatures in the region. Secondary egress for workers
will utilise ladderways in dedicated escape shafts in the event
that primary egress is obstructed.
Metallurgy and Processing
The Prairie Creek process plant will be able to process 2,400
tpd of run-of mine ("ROM") ore. The first stages of the processing
plant are a two-stage crushing circuit, followed by a dense media
separation ("DMS") plant, which will typically reject 25% low
density material. The DMS plant high-density (sink) fraction and
crusher fines, which bypass the DMS plant, will be recombined to
feed a grinding circuit to prepare the material for
flotation. Flotation will consist of a conventional lead
flotation circuit with a rougher, concentrate regrind and three
stages of cleaning, followed by zinc flotation with a rougher and
three stages of cleaning. On average, the plant will produce 221
tpd of lead concentrate containing 60% lead and 1090 g/t silver
and, 310 tpd of zinc concentrate containing 58% zinc.
Concentrates will be dewatered, containerized and trucked from
the mine to a transfer station such as Fort St. John, or other alternatives, where
the containers will be loaded onto rail cars for distributions to
market. DMS plant waste rock will be loaded onto trucks for
transfer to the on-site waste rock pile. Flotation tails will be
filtered and placed underground as paste backfill.
A summary of the process plant grades and recoveries is shown in
the table below.
Table 5: Processing Overview
Description
|
Unit
|
Value
|
Annual Throughput
(Nominal)
|
tpa
|
876,000
|
ROM Head Grades Pb
(LOM Average)
|
% total /
sulphide
|
6.58 /
5.78
|
ROM Head Grades Zn
(LOM Average)
|
% total /
sulphide
|
9.00 /
8.58
|
ROM Head Grades Ag
(Average)
|
g/t
|
119
|
Lead Concentrate -
Lead Recovery
|
%
|
86.5
|
Lead Concentrate -
Silver Recovery
|
%
|
86.8
|
Zinc Concentrate -
Zinc Recovery
|
%
|
85.7
|
Zinc Concentrate -
Silver Recovery
|
%
|
7.8
|
Smelting and Concentrate Quality
Discussions have been ongoing with potential buyers of the
concentrate and the Project is well known in the marketplace. A
non-binding Memorandum of Understanding ("MOU") has been signed
with Boliden which extends the validity of the existing MOU to
June 30, 2023 from its original
expiry date of June 30, 2022 and
significantly increases zinc sulphide concentrates to be delivered
to Boliden, with exact annual quantities to be mutually agreed.
Along with the formal MOU process negotiations have been
proceeding with several other buyers of the concentrates. As such,
formal offers have been received by NorZinc which exceed the total
forecast production of the mine. These negotiations will
continue and are expected to proceed to formal agreements as the
development of the mine progresses.
Proposed Infrastructure Upgrades and Access Road
The Prairie Creek Project is a remote, isolated site, with
existing site infrastructure that requires upgrade, expansion or
replacement where necessary.
In 1982, the mine was fully permitted, and construction was
almost complete, but production was not achieved. The existing site
infrastructure includes the process plant, administration building,
workshops, sewage treatment plant, diesel storage tank farm and
warehouses. New facilities needed for operations will include the
DMS plant, a paste backfill plant, tailings stockpiles, liquified
natural gas ("LNG") facility, water storage pond, waste rock pile,
water treatment plant, accommodations and kitchen, additional
warehouse and concentrate load-out facility.
New dual-fuel powered low-speed power generator units will
provide power and heat for the site. These power generator units
will be located within the existing mill powerhouse after removal
of the obsolete units currently in place. The energy source for the
power generation will be provided by a combination of LNG using an
on-site LNG storage / vaporization facility and diesel fuel from
the existing diesel storage tank farm adjacent to the mill. The new
generators will be outfitted with glycol heat recovery systems in
order to maximize energy efficiency. The heat from the generators
will be used to heat some of the surface facilities.
An active stockpile of tailings will be stored in a building
with heating capability next to the paste backfill plant to provide
feed to the plant. An outdoor area will accommodate a secondary
tailings stockpile. The waste rock pile will be located in a draw
of the Harrison Creek valley north of the mill and accessed by
trucks on a reconstructed internal site road.
A 150-person camp and cookhouse exists on the site, but most of
the buildings have deteriorated beyond economical repair. They will
be demolished and replaced by a modular camp adjacent to the
upgraded administration building complex to be used during
construction and operations.
The site water management plan includes the reconfiguration of
an existing large pond originally intended for tailings into a
two-celled water storage pond connected to the mine and mill via
piping and to a new water treatment plant. An exfiltration trench
below the bed of Prairie Creek will discharge site effluent.
The site is serviced by a 3,000 ft gravel airstrip located
approximately 1 km from the camp beside Prairie Creek which can
accommodate passenger aircraft up to DHC-7 size.
The construction of the process plant and site infrastructure
will be initially serviced via a winter road. Site production
operations will be supported via an all-season road ("ASR") which
will be completed prior to concentrate production.
Water Management
Water management plans have been improved since the 2013
operating permits were issued. The expected range of groundwater
that would be flowing into the mine has been reduced, and it has
been determined that the majority can be intercepted by drainage
wells, thus avoiding contact and contamination in the mine
workings. Separately, the mill process flow sheet has been improved
and processing can occur with 100% recycling of mill effluent.
These two improvements will result in a better effluent for
discharge, consisting almost entirely of the intercepted
groundwater, and with a reduced demand for water treatment. The
water storage pond will have one cell to enable recycle of water to
the mill, and another for the temporary storage of the intercepted
groundwater prior to discharge, with and without treatment to meet
effluent water quality limits.
Operating Permits
Mine operating permits were received from the Mackenzie Valley
Land and Water Board ("MVLWB") in 2013. These were renewed in 2020.
In 2021, the Company applied to make some modifications to the
permits to reflect an expanded project. The permitting process has
reached the mid-point and is expected to conclude in late Q1
2022.
Closure Plans and Costs
The main components of closure plans are the removal of
infrastructure and buildings, removal of the water storage pond and
covering of the waste rock pile. The value of mine closure costs
associated with the 2020 operating permits, and estimated using the
Government of the NWT's cost calculator, total $14.2M. A small increase in these costs is
expected to reflect the closure costs for the expanded project in
the permits expected to be issued in 2022. ASR closure costs are
estimated at $6.4M.
Stakeholder Engagement
The Company continues to work in partnership with the local
Indigenous and non-Indigenous Governments of the region that would
be impacted by the Project and are the key beneficiaries. There is
strong Indigenous support and partnerships developed through
engagement on the Project components with signed Benefit Agreements
between the Company and Indigenous Governments for the Mine and the
Road. These Agreements ensure benefits through contracts, training,
and employment throughout all phases of the Project.
The Project is expected to provide over 600 jobs during
construction and over 300 jobs during the life of mine operation.
The project will have a significant impact on the region of the
Project and the Northwest
Territories representing an economic development opportunity
of over $3 billion and the potential
for direct territorial and federal government benefits over
$800M.
Mineral Resource Estimate
The new Mineral Resource Estimate is an update of the previous
estimate which was included in the Company's Feasibility Study
Technical Report dated September 20,
2017 and includes assay data from 47 samples and
lithological data collected from three drillholes, PC-20-225, 226,
and PC-21-227, that have been acquired since the previous
estimate.
Highlights Include:
- 9.8 M tonnes of total Measured
& Indicated ("M&I") Resources at 22.7% ZnEq, a 15% increase
in total M&I tonnage from the September
2015 Mineral Resource Estimate
- 6.4 M tonnes of total Inferred
Resources at 24.1% ZnEq
- Conversion of Main Quartz Vein ("MQV") Inferred Resources into
Indicated Resources with the addition of recent drill results and
updated modeling and estimation parameters, resulting in an
increase to MQV M&I tonnes by 11%, to 6.2 M tonnes grading 184 ppm Ag, 11.9% Pb, 10.7%
Zn
- Stockwork ("STK") M&I Resources have increased by 36% to
2.9 Mt, grading 65 ppm Ag, 3.2% Pb, 7.7% Zn
- Metal content in total M&I Resources has increased by 15%
for zinc, 11% by lead, and 15% for silver
A summary of the Mineral Resource Estimate is set out in the
table below:
Table 6: Updated Mineral
Resource Estimate for the Prairie Creek Project
Effective October 15, 2021
Domain
|
Classification
|
Tonnes
|
ZnEqi
%
|
Ag ppm
|
Pb %
|
Zn %
|
Main Quartz
Zone
(MQV)
|
Measured
|
903,000
|
30.3
|
206
|
11.2
|
12.9
|
Indicated
|
5,248,000
|
27.7
|
181
|
12.0
|
10.3
|
M &
I
|
6,152,000
|
28.0
|
184
|
11.9
|
10.7
|
Inferred
|
3,849,000
|
31.4
|
207
|
8.4
|
16.7
|
|
|
|
|
|
|
|
Stockwork
(STK)
|
Measured
|
128,000
|
17.4
|
97
|
4.1
|
10.3
|
Indicated
|
2,754,000
|
12.6
|
63
|
3.2
|
7.6
|
M &
I
|
2,883,000
|
12.8
|
65
|
3.2
|
7.7
|
Inferred
|
2,187,000
|
12.7
|
67
|
4.0
|
6.7
|
|
|
|
|
|
|
|
Stratabound
Massive
Sulphides (SMS)
|
Indicated
|
722,000
|
16.4
|
53
|
5.1
|
9.7
|
Inferred
|
367,000
|
15.4
|
47
|
4.4
|
9.6
|
|
|
|
|
|
|
|
TOTAL
|
Measured
|
1,031,000
|
28.7
|
193
|
10.3
|
12.6
|
Indicated
|
8,724,000
|
22.0
|
133
|
8.6
|
9.4
|
M &
I
|
9,755,000
|
22.7
|
139
|
8.8
|
9.7
|
Inferred
|
6,403,000
|
24.1
|
150
|
6.7
|
12.9
|
Notes to
table:
|
1.
|
Stated at a cut-off
grade of 8% ZnEq based on prices of Zn = $1.15
USD/lb, Pb = $1.00 USD/lb, Ag = $20.00 USD/troy
oz.
|
2.
|
Average overall processing recovery
factors for the purposes of the resource estimate for Zn,
Pb and Ag are 81.5%, 84.3%, and 95.1% respectively, with payables
similarly as 85.0%, 94.8%, and 85.0%. Numbers may not
compute exactly due to rounding.
|
A comparison of the updated Mineral Resource Estimate to the
previous estimate is described in Table 7:
Table 7: Updated vs Previous Resource Estimates for the
Prairie Creek Project
Updated Prairie
Creek Resource Estimate
September 2021
|
|
Previous Resource
Estimate
September 2015
|
MQV+STK+SMS
|
Tonnes
|
Ag ppm
|
Pb %
|
Zn %
|
|
Tonnes
|
Ag ppm
|
Pb %
|
Zn %
|
Measured
|
1,031,000
|
193
|
10.3
|
12.6
|
|
1,482,000
|
200
|
10.8
|
13.2
|
Indicated
|
8,724,000
|
133
|
8.6
|
9.4
|
|
7,222,000
|
123
|
8.5
|
8.7
|
Measured &
Indicated
|
9,755,000
|
139
|
8.8
|
9.7
|
|
8,704,000
|
136
|
8.9
|
8.9
|
Inferred
|
6,403,000
|
150
|
6.7
|
12.9
|
|
7,049,000
|
166
|
7.7
|
11.3
|
The updated Mineral Resource Estimate contains
approximately 1.0 million more tonnes in the M&I
resource categories than the September 2015
Estimate, with individual overall metal content in the same
categories also up by 15%, 11%, and 15% for zinc,
lead and silver, respectively. Changes in tonnage are largely
attributable to modifications and enlargement of the STK wireframe
model owing to recently acquired drillhole data. The changes
in distribution of Mineral Resources among resource
classifications – a decrease of Measured Resources in both the
MQV and STK Zones – are attributable to the use of more
conservative search ellipses in the current estimate compared to
the previous estimate.
Additional Notes:
- Grades were estimated for silver, lead, zinc, arsenic, cadmium,
copper, iron, mercury lead oxide, antimony and zinc oxide and were
interpolated into the block model using ordinary kriging (OK).
- A complete assay database rebuild from original lab
certificates was completed in mid-2021 and forms the basis for the
new estimate.
- The ZnEq average grade is relatively insensitive to the cut-off
grade, with the exception of the STK Indicated and Inferred
Resources. At all cut-offs the ZnEq grade is significantly higher
than 8% and therefore the use of a threshold grade has little
impact on the total mineral resource.
Independent Qualified Person
The PEA was prepared for NorZinc by Ausenco Pty Ltd ("Ausenco")
and other industry consultants, all defined as Qualified Person
("QP") under National Instrument 43-101. The QPs that have reviewed
and approved the content of this press release are:
- Kevin Murray, P.Eng, Manager,
Process Engineering, Ausenco
- Greg Mosher, P.Geo, Global
Mineral Resource Services
- Maurice Mostert, P.Eng, Manager
- Western Canada, Mining
Plus.
The Technical Report for the Preliminary Economic Assessment for
the Prairie Creek Project will be filed on SEDAR (www.sedar.com)
within 45 days of this press release.
About NorZinc
NorZinc is a TSX-listed mine development Company trading under
the symbol "NZC" and on the OTCQB under the symbol "NORZF". NorZinc
is developing its key project, the 100%-owned high grade
silver-zinc-lead Prairie Creek Project, located in the Northwest Territories.
Cautionary Statement – Forward-Looking Information
This press release contains forward-looking information,
including, among other things, all of the
economic forecasts and projections included in the
PEA, plans described regarding building a mine on the Prairie
Creek Project, the expectation of filing a subsequent feasibility
study, and the expectations regarding optimizations to be contained
in any such feasibility study. The forward-looking statements
in this release are subject to numerous risks, uncertainties and
other factors that may cause future results to differ materially
from those expressed or implied in such forward-looking statements,
in particular future planned activities are subject to receipt of
sufficient funding. Material risks and uncertainties that
could cause actual results to differ materially from the
forward-looking statements include funding
risk, uncertainties related to actual capital
costs, operating costs and expenditures, production schedules
and economic results from the Prairie Creek project, uncertainties
and risks related to development activities, uncertainties
inherent in the estimation of mineral resources, permitting risks,
environmental risks, as well as all of the risk factors described
in the Company's most recent Annual Information Form and
Management's Discussion & Analysis filed with Canadian
provincial securities regulatory authorities. The Company disclaims
any intention or obligation to update or revise any forward-looking
information, except as required by applicable law.
___________________________
|
1 ZnEq% = (Grade of Zn in %) +
[(Grade of Pb in % * Price of Pb in $/lb * 22.046 * Recovery of Pb
in % * Payable Pb in %) + (Grade of Ag in g/t* (Price of Ag in
US$/Troy oz/ 31.10348) * Recovery of Ag in % * Payable Ag in
%)]/(Price of Zn in US$/lb*22.046 * Recovery of Zn in % * Payable
Zn in %). For the purposes of the stated mineral resource estimate,
prices used are Zn = $1.15 USD/lb, Pb = $1.00 USD/lb, Ag = $20.00
USD/troy oz, overall average LOM recoveries for Zn, Pb and Ag are
81.5%, 84.3%, and 95.1% respectively, with payables similarly as
85.0%, 94.8%, and 85.0%. For the purposes of the modelled
mine physicals, prices used are Zn = $1.20 USD/lb, Pb = $1.05
USD/lb, Ag = $24.00 USD/troy oz.
|
SOURCE NorZinc Ltd.