Three years of work to optimize its Prairie Creek zinc-lead silver mine project in Northwest Territories is paying off for Canadian Zinc Corp. In March, this optimization work resulted in an updated and improved pre-feasibility study.

A resource calculated late in 2015 outlined 8.7 million metric tons of measured and indicated resources averaging 8.9 percent zinc, 9.5 percent lead and 136 grams-per-metric-ton silver; a 32 percent increase compared to the last resource calculation in 2012.

Based on the increased resource, the 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 (containing roughly 86 million pounds of zinc, 82 million lbs. lead and 1.7 million ounces silver) per year.

Using a base case metal price of US$1/lb. for both zinc and lead, and US$19/lb. for silver, the operation is anticipated to produce a post-tax net present value (8 percent discount) of C$302 million and post-tax internal rate of return of 26 percent.

Canadian Zinc has ready buyers for the metals anticipated to be produced at Prairie Creek; signing memorandums of understanding with two major smelters to acquire between 40,000 and 70,000 metric tons of zinc concentrates; and 20,000 to 25,000 metric tons of lead concentrates per year.

Korea Zinc signed up to buy 20,000 to 30,000 wet metric tons of zinc sulfide concentrates; 15,000 to 20,000 wet metric tons of lead sulfide concentrates; and 5,000 metric tons of lead oxide concentrates per year, for a minimum period of five years from the date of startup of its Prairie Creek Mine.

Boliden, which has five smelters in northern Europe, signed up to buy at least 20,000 dry metric tons and up to 40,000 dry metric tons of zinc sulfide concentrates per year.

In July, Canadian Zinc raised C$10.2 million to fund feasibility, development and exploration programs for the Prairie Creek project; as well as exploration at its zinc-lead projects in Newfoundland.

Canadian Zinc is weighing the benefits of completing a definitive feasibility study for Prairie Creek, a move that would enhance the company's ability to secure bank financing for C$216 million in capital costs needed to finish developing the zinc mine.

-SHANE LASLEY