NorZinc Announces Positive PEA Including After-Tax Npv8% of US$299m on Extended 20-Year Mine Life at Higher 2400 Tpd Throughput

22 October 2021

October 21, 2021 ? Vancouver, British Columbia ? 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 ZnEq1  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.”

See complete release for more details. 

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