By Shane Lasley
New PFS shows promise for Prairie Creek zinc mine
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Last updated 4/10/2016 at Noon
Canadian Zinc Corp. March 31 provided summary results of its 2016 preliminary feasibility study on it Prairie Creek zinc-lead silver mine in Northwest Territories.
This updated PFS is based on optimization work completed over the past three years, including a 2015 exploration program that increased total measured and indicated resource tonnages by 32 percent.
The 2016 PFS outlines a mine that would produce an average of 60,000 metric tons of zinc concentrate and 55,000 metric tons of lead concentrate per year - containing roughly 86 million pounds of zinc, 82 million lb. of lead and 1.7 million ounces of silver.
Using base case metal price forecasts of US$1/lb. for both zinc and lead and US$19/lb. for silver, this operation is anticipated to yield average annual earnings before interest, taxes, depreciation and amortization of C$90 million per year and cumulative EBITDA earnings of C$1.4 billion over an initial mine life of 17 years.
This base case scenario is estimated to produce a pre-tax net present value (8 percent discount) of C$509 million and an internal rate of return of 32 percent; and a post-tax NPV (8 percent discount) of C$302 million and post-tax IRR of 26 percent.
Pre-production capital costs, including a new all-season road and contingency, are estimated at C$244 million, with a payback of three years.
"The base case economic model indicates a robust project at consensus forecasts for the long term prices of lead and zinc and we believe that there is very good potential for additional project optimization, enhanced economics and further extending the mine life," said Canadian Zinc Chairman and CEO John Kearney.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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