Consolidated Zinc : Commissions Scoping Study

• Study to commence ahead of planned stage 1 production at zinc mine in Mexico
• Aim to refurbish and expand existing plant to treat approximately 75,000tpa
• Decision follows maiden high-grade Mineral Resource reported in compliance with the JORC Code
• Immediate production access provided via existing underground infrastructure
• Global zinc prices continue strong performance
• RungePincockMinarco Ltd engaged as managers to assess mining and infrastructure capabilities
• BatteryLimits Pty Ltd appointed to investigate the metallurgical and process engineering aspects

  CONSOLIDATED Zinc Limited (ASX:CZL; "Consolidated Zinc" or "the company") is pleased to announce the commencement of a mine scoping study at its Plomosas zinc-lead-silver project in northern Mexico.

  The news comes after the Company's decision to move towards a faster production schedule after a high-grade maiden JORC compliant Mineral Resource was announced in December last year.

  The study will assess mining and infrastructure options, including the possible re-establishment of past mine operations, and refurbishment and potential future expansion of an existing onsite pilot processing plant, targeting a throughput of 200 tonnes per day, or approximately 75,000 tonnes per annum.

  Figure 1. Location of Plomosas mine, Mexico

  Managing Director Mr Will Dix said the company believes following the high-grade maiden JORC results, the time is right to consider options for fast-tracking production.

  "There is an opportunity for early cash flow by using the existing plant currently on site," Mr Dix said. "The Scoping Study will help improve our understanding of the mine mineralisation and give us some insight into various mining methods and processing options initially focussed on the indicated part of the Resource."

  Independent global consultant RungePincockMinarco Pty Ltd ("RPM"), which has intimate knowledge of Plomosas from previous work completed with Consolidated Zinc, has been appointed to manage the study. In addition, BatteryLimits Pty Ltd will continue metallurgical testwork and develop the metallurgical and process engineering options.

  "We have established a solid resource base, largely from the drilling completed in 2016, and are seeing ongoing success as we identify additional mineralisation underground," Mr Dix said.

  "The short and medium-term outlook for zinc prices gives us confidence the study will return positive economic indicators that will provide further justification for this approach."

  The scoping study is expected to be completed early in the second quarter of 2017, enabling decisions to be made on future progress and development of the Plomosas mine soon after.

  "We look forward to working closely with our expanded team to work through the study," added Mr Dix. "In the meantime drilling will continue to expand our current resource and our goal remains to establish a larger scale mining operation off a robust resource at Plomosas."

  Figure 2: Plomosas processing plant on site. Constructed in 2006, it ceased operation in 2011 having treated only 100,000t of ore. Scoping Study will assess options to refurbish and expand throughput.

  BACKGROUND

  Figures 3,4: Plomosas mining infra- structure includes equipment and underground development providing immediate access to the Level 7 resource (such as the Juarez decline shown here).

  The Company announced a maiden JORC resource of 568,000 tonnes @ 16.9% Zn+Pb and 28.4g/t Ag for 96,000t of contained Zn+Pb metal in both Indicated and Inferred categories which was announced to the market on 15 December 2016.

  The Indicated Category resource comprises semi-oxidised sulphide (SOX) mineralisation totalling 99,000 tonnes @ 19.3% zinc, 9.0% lead and 57.9 g/t Ag above a 3% Zn cut-off grade.

  The Scoping Study will focus initially on the Indicated mineralisation while ongoing drilling and underground sampling will continue to increase the resource and improve the resource classifications. Metallurgical testwork by BatteryLimits of the SOX material had already commenced, and the results of which were reported in the first half of 2016.

  Consolidated Zinc is confident in progressing to this next stage due to:

  • The existence on site of a processing plant capable of treating 90tpd which could be refurbished and expanded to 200tpd. This was constructed in 2006 and last operated in 2011 having treated no more than 100,000 tonnes since it was built.

  • The existence of shafts, declines and drives that provide immediate access to the resources defined at level 7.

Yours faithfully,

Consolidated Zinc Limited (ASX:CZL) is a minerals exploration company listed on the Australian Securities Exchange. The Company's major focus is in Mexico where it recently acquired 51% of the exciting high grade Plomosas Zinc Lead Silver Project through its majority owned subsidiary, Minera Latin American Zinc CV SAPI. Historical mining at Plomosas between 1945 and 1974 extracted over 2 million tonnes of ore grading 22% Zn+Pb and over 80g/t Ag. Only small scale mining continued to the present day and the mineralised zones remain open at depth and along strike. The Company's main focus is to identify and explore new zones of mineralisation within and adjacent to the known mineralisation at Plomosas with a view to identifying new mineral resources that are exploitable.

In December 2016, CZL announced the first mineral resource compliant with the JORC 2012 guidelines totalling 568,000 tonnes @ 16.9% Zn+Pb and 28.4 g/t Ag for 96,000t of contained Zn+Pb metal in both Indicated and Inferred categories (Table A).

Competent Persons' Statement

The information in this report that relates to exploration results, data collection and geological interpretation is based on information compiled by Steve Boda BSc (Hons), MAIG, MGSA, MSEG and Andrew Richards BSc (Hons), Dip Ed, MAusIMM, MAIG, MSEG, GAICD. Messrs Boda and Richards are both Members of Australian Institute of Geoscientists (AIG) and Mr Richards is also a Member of the Australasian Institute of Mining and Metallurgy (AusIMM).

Both Messrs Boda and Richards have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken to qualify as Competent Person as defined in the 2012 edition of the 'Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves' (JORC Code). Messrs Boda and Richards consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

The information in this report that relates to Mineral Resources is based on information compiled by Mr Robert Dennis who is a Member of the Australasian Institute of Geoscientists and Australian Institute of Mining and Metallurgy. Mr Dennis is a full time employee of RungePincockMinarco Limited. Mr Dennis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Dennis consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Note:

All Mineral Resources figures reported in the table above represent estimates at December, 2016. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies.

The Mineral Resource has been estimated in accordance with the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' prepared by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Geoscientists and Minerals Council of Australia (The JORC Code 2012).