11 August 2021
August 11, 2021 ? Vancouver, British Columbia ? NorZinc Ltd. (TSX: NZC; OTCQB: NORZF) (the “Company” or “NorZinc”) reports its interim financial results and development activities for the second quarter ended June 30, 2021 (“Q2 2021”) and announces signing of Impact Benefit Agreement with ?????dl???? K???? First Nation (“LKFN”). (All amounts are in Canadian dollars unless otherwise stated. M = million).
The Company’s activities are primarily focused on the completion of permitting for an expanded project design and ultimate development of the Prairie Creek silver-zinc-lead mine in Canada’s Northwest Territories (the “Prairie Creek Project”, the “Prairie Creek Mine” or the “Mine”). In Q4 2019, the Company received the final Water License (“WL”) and Land Use Permit (”LUP”) from the Mackenzie Valley Land & Water Board (“MVLB”) and Parks Canada (“Parks”) for construction of All Season Road (“ASR”) access to the Prairie Creek Project. In Q4 2020 the Company received renewed operating WL and LUP permits for the Mine from the MVLB and NWT.
For the three and six months ended June 30, 2021, the Company incurred a net loss of $3.5M and $5.2M respectively, compared to a net loss of $1.3M and $4.3M for the respective comparative periods. The increase was driven by increased exploration and evaluation expense and increased general and administrative expense related to the termination and severance payable to a former senior executive of the Company.
As at June 30, 2021, the Company had a negative working capital balance of $0.2M (December 31, 2020 – positive $3.2M) which included cash and cash equivalents of $1.2M (December 31, 2020 - $5.3M). The working capital balance has decreased from 2020 to 2021 due to exploration and corporate expenditures in the period.
In accordance with the previously announced mine enhancement program (“MEP”), NorZinc continues to plan, subject to Covid-19 restrictions and financing, to construct the ASR over parts of three calendar years, initially in Phase 1 (2022) as a winter road and in Phase 2 (2023-2024) installing bridges, culverts and final grading of the road. Prior to each phase of the construction activity, the Company plans to complete further field investigations and site plans and award construction contracts. During Phase 1 the Company plans to undertake geotechnical work on the ASR route to determine final ASR design and Phase 2 bidding parameters. Dependent on Covid-19 and the permitting and financing timelines, construction of the ASR is planned to commence in late 2022 and continue into 2024, in parallel with continuous and ongoing site construction and project development.
In preparation for the scenario that NorZinc increases mill throughput from 1,600 tonnes per day to 2,400 tonnes per day, the Company has applied for amendments to the current Water Licence and Land Use Permit to reflect an increased processing. Due to the requirements of the regulatory timeline, the application was filed in May 2021 and is currently in process to ensure that all permits and licences are in place in the case of an increased processing scenario.
The Company has engaged Auramet International, LLC (“Auramet”) as Financial Advisor in conjunction with project financing for the Prairie Creek Mine. Auramet’ s role will be to work with the Company to provide advice and assistance regarding the solicitation, structuring, negotiating, and closing of a comprehensive financing package.
The Company continues to target the main development project financing for mid-2022 with funding of the construction of the initial Phase 1 ASR (an early winter road) prior to the overall project financing, planned to be from non-bank sources as discussed below. As previously announced, the main development project funding is expected to be sourced largely from the debt and silver streaming markets.
Management continues to explore additional financing alternatives including flow-through financing, convertible notes, bridge loans and private placements as alternatives to a potential silver stream financing.
The Company is pleased to announce the signing of a Road Benefit Agreement and a Letter of Agreement linking the RBA with the Impact Benefit Agreement signed in 2011 with the LKFN of Fort Simpson, NWT. These two agreements are related to the construction and operation of the road to connect the Company’s high grade zinc-lead-silver Prairie Creek Mine to the Liard Highway in the Northwest Territories of Canada.
“I am pleased to be signing these important benefit agreements with the LKFN ensuring economic and social benefits from the construction and use of an All-Season Road that will support the Prairie Creek Mine. I thank the Chief and leadership of LKFN in supporting the Prairie Creek project and look forward to our continued partnership in realizing the benefits to all LKFN members.” said NorZinc President and CEO Rohan Hazelton on the completion of these agreements.
Unless otherwise indicated, all scientific and technical information relating to the Company’s mineral projects contained in this news release has been reviewed and approved by Kerry Cupit, P. Geo., who by reason of education, membership in professional associations (as defined in NI 43-101) and past relevant work experience, fulfills the requirements of a Qualified Person as defined in NI 43-101. Mr. Cupit is a Project Geologist employed by the Company, with a B.Sc. in Earth Sciences (Geology).