NEWS RELEASE

CZN-TSX CZICF-OTCQB

FOR IMMEDIATE RELEASE

October 31, 2017

CANADIAN ZINC FILES TECHNICAL REPORT ON 2017 FEASIBILITY STUDY OF THE PRAIRIE CREEK MINE

Vancouver, British Columbia, October 31, 2017 - Canadian Zinc Corporation (TSX: CZN; OTCQB: CZICF) reports that the Company has filed a new Technical Report on its Prairie Creek Zinc-Lead-Silver Project in the Northwest Territories.

The Technical Report entitled "Prairie Creek Property Feasibility Study NI 43-101 Technical Report" effective September 28, 2017, which provides the results of the recently completed 2017 Feasibility Study ("2017 Feasibility Study" or "2017 FS"), 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 ("NI 43-101") and is available under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.canadianzinc.com.

The results of the 2017 FS were previously announced by the Company on September 28, 2017. See Canadian Zinc News release September 28, 2017.

Conclusions

AMC concludes that the Prairie Creek Mine is shown to be a viable project, based on the Mineral Reserves, mine plan and production and economic parameters determined within the 2017 Feasibility Study.

The Prairie Creek Property contains a high-grade, silver-lead-zinc-copper vein along with other lead-zinc deposits and deposit types. The Technical Report indicates a Mineral Reserve of 8.1 million tonnes and a life of mine ("LOM") from mill start-up of 15 years at a steady-state mining production rate of 584,000 tonnes of ore per annum.

AMC recommends that Canadian Zinc advance the Project to the next stage, which will include detailed design and planning of the required services, construction of the all season road, refurbishment of the mill, ordering the long-lead equipment for power generation, portal refurbishment, access widening, and development of ramp declines and underground infrastructure in preparation for ore production and processing.

Mill start-up is projected for August 2020, with a pre-production period during which detailed engineering, mill and camp refurbishment, underground development from existing workings, and construction of key surface infrastructure items, including a paste plant and all season road, will take place.

The 2017 FS indicates a base case pre-tax Net Present Value ("NPV") of $344M using an 8% discount rate, with an Internal Rate of Return ("IRR") of 23.8% and a post-tax NPV of $188M with a post-tax IRR of 18.4%. The Base Case metal price assumptions used in the model are: Zn=US$1.10/lb., Pb=US$1.00/lb., Ag=US$19.00/oz., with a foreign exchange rate of C$1.25=US$1.00.

The development of the Prairie Creek Mine will offer significant economic advantages on a wider scale. There is broad support among Aboriginal organizations and communities in the Dehcho region for the direct benefit and economic stimulus that the mine would bring to this region of the Northwest Territories. The envisaged operation of the Prairie Creek Mine presents a significant opportunity for potential enhancement of the social and economic well-being of the surrounding communities.

During construction there will be approximately 211 jobs, and during operations approximately 330 direct full-time jobs over the life of the mine. In addition, the Project offers other potential indirect business and employment opportunities, related to transport, supply of the Mine Site and environmental management and monitoring.

Recommendations

The principal recommendations in the Technical Report relate to further detailed studies and engineering associated with the design and operation of the future mine and, at the same time, initiating a path to production of mine construction that will lead to achieving a target mill production startup of August 2020.

Ausenco and AMC recommendations to be completed during the execution phase of the project that could either improve the project economics or advance the development of the project include:

  • Detailed engineering and Issued For Construction drawings to support the procurement and construction of the process plant and sit infrastructure.

  • Early works site activities including removal of existing generators from the power house, repair of the mill roof, initial work on the Water Storage Pond and Waste Rock Pile, site clearance of derelict buildings, equipment and scrap material.

  • Investigate the utilization of second hand construction equipment and mobile equipment for operations.

  • Additional study of paste binder requirements and backfill methodology.

  • Additional detailed mine design and scheduling to further optimize grades and balancing of ore and tailings stockpile requirements.

    Prairie Creek Mine Project Highlights
  • An initial 15-year mine life based on a Proven and Probable Mineral Reserve of 8.1 million tonnes grading 8.6% Zn, 8.1% Pb and 124 g/t Ag. Potential for extended mine life through further underground exploration leading to the possible conversion of Inferred Mineral Resources to Mineral Reserves.

  • During the first 10 years of operation, annual production is projected to average 64,800 tonnes of zinc concentrate and 71,600 tonnes of lead concentrates containing 95 million lbs. zinc, 105 million lbs. lead and 2.1 million oz. silver.

  • Pre-production capital costs, including provisions for a new all season road are estimated to be $279 million including a contingency of $26 million

  • LOM average EBITDA of $81 million per year and cumulative EBIDTA earnings of $1,294 million over the projected 15-year mine life.

    Optimization

    As part of the 2017 Feasibility Study, a number of optimization programs suggested in earlier Preliminary Feasibility Studies were completed that had a beneficial impact on the Prairie Creek Project, including:

  • Underground hydrology studies that enabled more detailed and accurate predictions for pre-mining dewatering, which in turn enabled more accurate determination of the surface storage requirements, reduced water treatment requirements and produced a simpler site water management plan.

  • Testing of a composite bulk sample of ore from the Main Quartz Vein ("MQV"), derived from 2015 underground drilling, that is more representative of LOM feed than historically collected which showed excellent recoveries utilizing a simpler process flow sheet.

  • As part of the metallurgical program the first Stockwork ("STK") material was metallurgically characterized and tested and indicated good recoveries.

  • Variability testing on different types of MQV material using different reagents type was carried out to maximize recoveries.

  • Additional paste backfill studies on tailings generated from the 2017 metallurgical program.

  • Further engineering and design assessment of the surface infrastructure by Ausenco.

  • Risk and reliability assessment completed by Ausenco.

  • Mining / milling maximization capacity analysis.

  • Underground mine trade-off studies including ventilation, heating, haulage and development.

  • Analysis of energy alternatives for the operation.

  • Advancement of transport routing and logistics.

  • All season road studies and permitting.

Mining

The Prairie Creek Mine will be an underground operation, based primarily on the MQV and mining an average of 1,600 tonnes per day over a 15-year mine life. During full production, approximately 584,000 tonnes of ore per year will be mined.

Adits were previously driven on three levels: the 970 mL, the 930 mL and the 883 mL, totalling approximately 5 km of underground workings. Access for mining will be through an enlarged 883 mL portal and adit with secondary access through the 930 mL. The 970 mL penetrates the topmost limits of the MQV only and is not part of the current mine plan. As mining progresses to depth, ore from the MQV will be supplemented by ore from the deeper Stratabound Massive Sulphide ("SMS") deposit, both deposits being accessed by common ramp development.

Mining in the MQV and STK areas will be by longhole open stoping with paste backfill. Mechanized drift-and-fill will be used for the SMS ore, also with paste fill. The plan and objective is to use 100% of flotation tailings as backfill.

Ground conditions in existing development underground are good and the existing workings have stood unsupported for thirty years with minimal bolting.

The new mine plan envisages slashing out of some of the existing development to establish two spiral ramps to access deeper levels in the MQV, and the STK and SMS deposits. A single ramp will provide access to the ore above 883 mL. The plan biases initial production towards higher grade sulphide ore, rather than oxide mineralization, with beneficial effects on mine economics.

Ore drifts will be driven on the MQV north and south from the ramp access points to the strike limits of the ore body. Stoping will begin at the ore limits and retreat to the ramp access points. Pre-production development is expected to take approximately 15 months, before stope ore becomes available as mill feed. This work will be performed by a contractor. On completion of the contracted scope of work, CZN will have the option of taking over the work itself or continuing with contract mining.

The majority of water from underground will be collected through advanced dewatering boreholes and pumped to surface, avoiding contamination. All water discharged from the mine will either be sent to the mill as process water, pumped into the existing impoundment pond, which will be modified into a two-cell water storage pond, or directly treated in a new water treatment plant.

Power Generation Plan

It is planned to utilize a turnkey type power generation as proposed by Northwest Territories Power Corporation. This proposal utilizes four new 2.77 MW dual-fuel LNG/diesel powered generator units that will provide power and heat for the site. The power generator units will be located within the existing mill powerhouse. Maximum power running load for the site is estimated at 6.4 MW. These generators will be outfitted with heat recovery systems to maximize energy efficiency. The waste heat from the generators will be used to heat the surface facilities and, potentially, mine air. Further heat for underground and accommodations will be generated by LNG based furnaces.

Processing

The Prairie Creek plant is designed and planned to process the run-of-mine ("ROM") ore produced from the underground mine. More and better information concerning the characteristics of the ore obtained from studies conducted over the past two years has enabled the design of an enhanced mine plan, which will supply optimal feed to the process plant and provide better predictability of quantity and quality of concentrate products. The daily operating throughput will be approximately 1,600 tpd to a Dense Media Separation ("DMS") facility, at the front end of the mill. The DMS product will be fed to the grinding and flotation circuit at a feed rate of nominally 1,200 tpd when

Canadian Zinc Corporation published this content on 31 October 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 01 November 2017 04:22:02 UTC.

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