CZN eyes 2020 start for Prairie Creek zinc mine
Last updated 1/13/2018 at 2:36pm
Canadian Zinc Corp. Sep. 28 said a recently completed feasibility study on Prairie Creek confirms the mine project in Northwest Territories can support a significant increase in the mining rate, which will result in higher quantities of zinc, lead and silver at a lower operating cost as compared to the mine plan presented in a pre-feasibility study completed last year.
"As part of the 2017 feasibility study, a number of optimization programs recommended in earlier preliminary feasibility studies were completed which had a beneficial impact on the Prairie Creek Project, and demonstrated that the capacity of the mine can be increased from 1,350 to 1,600 tonnes (metric tons) per day and the mill from 900 to 1,200 tonnes per day, producing more metal at a faster rate than projected in the 2016 PFS," said Canadian Zinc COO Alan Taylor.
The 1,600-metric-ton-per-day operation contemplated in the study is expected to average roughly 95 million pounds of zinc, 105 million lb of lead and 2.1 million oz of silver annually over the first 10 years.
This operation is estimated to have a net present value, after taxes and royalties, discounted at 8 percent of C$188 million. The post-tax internal rate of return is expected to be 18.4 percent. The capital costs needed to finish developing this mine is estimated to be C$279 million, including contingency. This is about C$35 million more than contemplated in the PFS, primarily due to the expansion in mine and mill throughput and accelerated development.
The post-tax payback period is expected in 4.6 years from mill start-up.
The feasibility study was based on 8.1 million metric tons of proven and probable reserves averaging 8.64 percent zinc, 8.1 percent lead and 124 g/t silver.
"Canadian Zinc has to date invested almost C$85 million in the exploration, development, environmental assessment and permitting of the Prairie Creek Mine and has significantly improved and de-risked the project," said Canadian Zinc Chairman and CEO John Kearney.
In September, Northwest Territories officials approved Canadian Zinc's request to upgrade a winter road into Prairie Creek.
"With the recent recommendation from the Mackenzie Valley Environmental Impact Review Board for approval of the all season road, and with this robust feasibility study in hand, Canadian Zinc will now concentrate efforts on financing for the development and construction of the Prairie Creek Mine," Kearney added.
The company anticipates it will take about 2.5 years to develop the mine and contingent upon financing hopes to have Prairie Creek in operation by mid-2020.