VANCOUVER, Feb. 7, 2017 /CNW/ - Canadian Zinc
Corporation (TSX: CZN; OTCQB: CZICF) ("the Company" or
"Canadian Zinc") announces that it has appointed HCF
International Advisers Limited as its adviser in securing debt
financing for the construction of its Prairie Creek Zn-Pb-Ag Mine
in the Northwest Territories,
Canada.
HCF International Advisers Limited ("HCF") is a
leading independent corporate finance advisory boutique based in
London, UK and focused on the
global natural resources and infrastructure sectors. HCF provides
strategic and financial advice to companies and financial
institutions across the complete life cycle of a project, including
structuring of debt finance.
HCF has prepared a three-staged approach to source and negotiate
debt financing for the Prairie Creek Mine. The preliminary stage,
which is now under way, includes development of a funding strategy,
appointment of an independent technical engineer, preparation of a
new financial model and conducting preliminary market soundings of
potential lenders. This will be followed by formal engagement with
potentially interested parties and thereafter negotiation and
finalization of financing documentation.
The estimated capex as reported in the Prairie Creek 2016
Preliminary Feasibility Study ("PFS") was $250 million and it is anticipated that debt
financing could range up to 70% of this figure.
John F. Kearney, Chairman and
CEO of Canadian Zinc, stated, "The Prairie Creek Project is
on the cusp of development with a definitive feasibility study
underway to support the project debt financing. We believe the
appointment of an experienced, financial adviser like HCF is timely
and will help guide the debt financing process to a successful
conclusion."
Mark Sumner, Managing Director
of HCF, stated, "We are pleased to be working with
Canadian Zinc, sourcing and negotiating debt financing for the
Prairie Creek Project. Our proven track record of structuring and
executing debt financing transactions for a variety of projects in
the natural resources sector will guide our financing work for the
Prairie Creek Mine."
In this improving metal prices market, Canadian Zinc is
advancing the development of the Prairie Creek Project by
undertaking a Definitive Feasibility Study ("DFS"), which is
expected to be completed in mid-2017.
The DFS will provide a path towards construction by addressing
all the contingencies in the required detail and help to manage or
reduce the various risk factors in the Project. The DFS will also
follow up on a number of recommendations in the Prairie Creek 2016
PFS for further optimization and potentially enhanced
economics.
Canadian Zinc has also recently engaged Ausenco to undertake
project development planning services for the Prairie Creek Mine
and to deliver an optimized project development plan that can be
used to advance the project to production and provide a critical
link to the project financing plan. The Project Execution Plan will
include the development of a contract and procurement strategy.
This strategy will align with the project execution schedule and
will serve to support the capital cost estimate as well as
execution risks and opportunities, and with the ability and
capacity to convert to an Engineering Procurement and Construction
Management ("EPCM") contract at the appropriate time.
About the Prairie Creek Mine
The Prairie Creek Mine hosts Proven and Probable Reserves of
7.60 million tonnes averaging 8.93% zinc, 8.33% lead, and 127.58
g/t silver within Measured and Indicated Resources of 8.70 million
tonnes grading 9.5% zinc, 8.9% lead and 136 g/t silver. In
addition, the Report confirms a large Inferred Resource of 7.05
million tonnes grading 11.3% zinc, 7.7% lead and 166 g/t silver and
additional exploration potential.
Over the 17 year mine-life, Prairie Creek's projected average
annual mine production is expected to be approximately 60,000
tonnes of zinc concentrate and 55,000 tonnes of lead concentrate
containing approximately 86 million pounds of zinc, 82 million
pounds of lead and 1.7 million ounces of silver.
The financial results are strongly positive and indicate a
pre-tax undiscounted cumulative cash flow of $710 million at metal prices of US$1.00/lb for zinc and lead and US$19/oz for silver. The financial model yields a
pre-tax NPV of $284 million at an 8%
discount rate, with an IRR of 23%, and a post-tax NPV of
$155 million, with a post-tax IRR of
18%.
About HCF International Advisers Limited
The HCF management and advisory team is comprised of skilled
professionals with both strong financial and technical expertise,
previously holding senior positions at the World Bank, the
International Finance Corporation (IFC), Standard Chartered Bank,
the European Bank for Reconstruction & Development (EBRD), and
Royal Bank of Scotland.
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. Canadian
Zinc also owns an extensive land package in central Newfoundland that it is exploring for
copper-lead-zinc-silver-gold deposits.
Cautionary Statement – Forward-Looking Information
This news release contains certain forward-looking
information, including, among other things, 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.
E-mail: invest@canadianzinc.com Website:
www.canadianzinc.com
SOURCE Canadian Zinc Corporation