TSX: NZC $0.080
Zn: $1.19/lb
Pb: $0.92/lb
Ag: $15.78/oz

Highlights

The Prairie Creek Mine (the Mine) is located in traditional Dene territory in Canada’s Northwest Territories. A Feasibility Study was completed on the Mine in September 2017 with robust economics. The Prairie Creek Project consists of the Mine and surrounding land and access. NorZinc has operating permits for the Mine and is in the final drafting process of the permit for all season road (“ASR”) access to the Mine. NorZinc expects to obtain the final ASR permits and seek financing for the construction and development of the mine in 2019 with full production occurring in 2022.

Based on the reserves of the 2017 Feasibility Study, Prairie Creek will have a 15-year mine life with average annual metal contained in concentrate of 105 million lbs. lead, 95 million lbs zinc and 2.1 million oz. silver for the first 10 years, and average annual EBITDA of $110 million over the same period.

In addition to the 8 million tonnes of reserves extending over a strike length of 1.2 km and 400m vertically, the project has 7 million tonnes of inferred resources extending over a total strike length of 1.2 kilometres with potential to extend the mine life significantly beyond 15 years.

Land and Permit Highlights

The Mine and related infrastructure are surrounded by the Nahanni National Park Reserve, which was expanded in 2009 to surround the site of the Prairie Creek Mine, however at the same time of the Park expansion, the Government of Canada provided legislative assurance that upon successful permitting, NorZinc would have the rights to operate and access the Mine. NorZinc signed a Memorandum of Understanding (“MOU”) with Parks Canada in 2008 and continuations of that MOU in 2012 and in 2015 in which both Parks Canada and NorZinc support a balanced approach to resource development and conservation.

NorZinc has also signed two Impact Benefit Agreements ("IBA") with two Indigenous groups providing strong local support for the Mine's development. In January 2011, NorZinc signed an IBA with the Nahanni Butte Dene Band, situated approximately 100 kilometres southeast of the Prairie Creek Mine. The Nahanni Butte Dene Band (NDDB) are the traditional stakeholders of the land around the Prairie Creek Mine. Later in 2011, the Company signed an IBA with the Liidlii Kue First Nation (LKFN) of Fort Simpson, NT, located approximately 250 kilometres east of the Mine. The Company also signed a Socio-Economic Agreement with the Government of the Northwest Territories later in 2011. All of these agreements are in place to provide maximum economic benefits and opportunities to the residents of the region.

Regional Map showing the Prairie Creek Mine, surrounded by, but excluded from, the Nahanni National Park Reserve

Initial development and operation of the Mine was planned to be undertaken via a winter road. In 2014 NorZinc decided to commence the process to permit an all season road access to the Prairie Creek Mine to reduce the mine concentrate inventory tied up at the mine, reduce the risk of delivering concentrates to the market and delivering supplies and equipment into the mine, and to enable the consideration of alternative, more environmentally friendly, energy sources.

In September 2017 the Mackenzie Valley Land and Water Review Board (“MVLWB”) issued an Environmental Assessment (“EA”) Report recommending the approval of the ASR subject to implementation of the measures described in the EA Report. On October 9, 2018 the Company received the final federal and territorial decision adopting the Review Board’s recommendation and conditions. The permitting process has now entered the regulatory phase conducted by the MVLWB that will culminate in the road permits being issued by the MVLWB and Parks Canada. These permits will incorporate the recommended mitigation measures included in the EA Report. The regulatory phase is expected to be completed mid-2019.

Existing Infrastructure

Prairie Creek Mine Infrastructure

The Prairie Creek Mine has the majority of the required infrastructure in place which includes:

  • 1,000 ton per day mill
  • 5 kilometres of underground workings and related equipment
  • 3 exploration diamond drills and related drilling supplies
  • 1,000 metre gravel airstrip
  • 50 kilometres of exploration roads
  • Fully equipped administration and warehouse buildings
  • Accommodations
  • 6.8 million litre fuel tank farm
  • 450,000 cubic metre capacity engineered water storage pond
  • 200-year storm-protective dyke system along Prairie Creek Mine Site
  • Modern satellite and repeater tower communication equipment 

Feasibility Study

A Technical Report entitled “Prairie Creek Property Feasibility Study NI 43-101 Technical Report” effective September 28, 2017 was prepared by AMC Mining Consultants (Canada) (“AMC”), with contributions by Ausenco Engineering Canada Inc. (“Ausenco”), Global Mineral Resource Services Ltd., Allnorth Consultants Limited and F. Wright Consulting Inc., in accordance with National Instrument 43-101 and is available below and under the Company’s profile on SEDAR at www.sedar.com. The Technical Report discloses the results of a Feasibility Study based on the 2015 Mineral Resources, updated Mineral Reserves, updated metallurgy test work, ongoing optimization and other engineering studies completed since September 2016. For simplicity the extracted contents of the Technical Report will be referred to as the “Sept 2017 Feasibility Study”.

A summary of key results from the Sept 2017 Feasibility Study is shown below:

The Sept 2017 Feasibility Study

  • Used Base Case US dollar metal price forecasts of $1.10/lb zinc, $1.00/lb lead and $19.00/oz silver.
  • Reserves and resources were:
    • Measured and Indicated Resources of 8.7 million tonnes grading 9.5% Zn, 8.9% Pb, and 136 g/t Ag
    • Proven and Probable Reserve of 8.1 million tonnes averaging 8.6% Zn, 8.1% Pb, and 124 g/t Ag. (included in the Measured and Indicated Resources
    • Inferred Resource of 7.0 million tonnes grading 11.3% Zn, 7.7% Pb and 166 g/t Ag.
  • Average annual metal content in concentrate during the first 10 years of operation of 95 million pounds of zinc, 105 million pounds of lead and 2.1 million ounces of silver.
  • Average annual earnings before interest, taxes, depreciation and amortization ("EBITDA") of $81 million per year and cumulative EBITDA earnings of $1,294 million over the projected mine life of 15 years

Pre-production Capital Costs, including provision for a new All Season Road, are estimated at $279 million, including contingency, with payback of 4.6 years from first revenue. (See below)

To view the complete September 28, 2017 Technical Report please click on the image below.

Prairie Creek Property Feasibility Study NI 43-101 Technical Report
(20.2MB PDF)

Permit and Licenses

Below is a summary of the key development permits and licenses

Agreements

Below is a summary of the key development socio-economic agreements


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