DEH CHO
Canadian Zinc Corporation has recently wrapped up part of its initial underground work at its Prairie Creek mine northwest of Nahanni Butte, though it still is seeking to raise money to continue work at the site through the year.

Prairie Creek, the Canadian Zinc Corporation owned mine in Nahanni National Park near Nahanni Butte. The company wants to go ahead with development but shrinking silver, lead and zinc prices threaten the mine's future. - NNSL file photo

Chief operating officer Alan Taylor said they finished pumping water from a tunnel in the mine earlier this month.

"We're continuing to stabilize that tunnel, we're doing some surveying on the site and we're about to put the diamond drill in that tunnel," Taylor said Feb. 16 while in Vancouver.

Prairie Creek was developed as a zinc, lead and silver mine decades ago but never entered production.

It has 5.22 million tonnes of proven and probable mineral reserves the company wants to mine.

After raising capital, the company announced last October that underground work at the mine had started.

Taylor estimated 15 to 18 people are working at the mine at this point with the underground work was contracted out to Procon Mining and Tunneling Ltd.

Beginning November, electrical service was reinstalled in the mine to support things like ventilation equipment.

As well, the company airlifted thousands of kilograms of equipment such as pumps, a diamond drill and pipes from Fort Simpson to the mine as there is no all season road to the site.

It has also been flying in diesel fuel.

Taylor said around Christmas time the company wrapped up the electrical work and then began to remove the ground water that had naturally entered the mine's 650 metre-long decline tunnel.

Next will be several months of diamond drilling work at locations at the end of the tunnel which will produce core samples.

The samples are used to show how much of a specific thing - metals in this case - are in the ground.

The drilling will update a study from 2012 and should help prove the economics of the mine.

Having a more detailed report, Taylor said, lowers risks for the company and makes the company more credible when it goes to financial institutions to raise money.

A soft metals sector has made it harder for mining companies to raise capital and he said several mining company stocks have been shrinking.

He said an early report should be done by the end of March.

Canadian Zinc, listed on the Toronto Stock Exchange, has seen its share price fall from a peak of $1.34 in early 2011 down to around 22 cents in the past few weeks.

The company, which also is exploring deposits in Newfoundland, is still trying to raise funding to continue developing the mine toward full production.

It has enough capital raised to complete planned underground work at Prairie Creek by mid-year, he said.

"We'll see where we are after that," Taylor said.

The stock price decline has followed a trend in the metals it seeks to mine from Prairie Creek.

The price of zinc has been around $0.97 per pound in American dollars recently since reaching a one-year peak above $1 per pound last August.

That was the highest zinc has been since 2011.

The price of silver has been declining as well.

The price peaked in 2011 at around $48 per ounce and has now dropped to $16.8 per ounce.

It's a similar story for the price of lead, also slumping since 2011.

"It's a tough go in the mining industry right now," Taylor said.

"It's difficult to see a long way forward right now but as I said we know it is cyclical ... we hope the cycle will start to come back and give us more ability to raise funds."

The company is still in the midst of an environmental assessment of building an all-season road 170 kilometres from the Liard Highway in to Nahanni National Park Reserve to the mine and a second airstrip.

As part of the review, a developers assessment report is expected to be done in March.

Taylor said the company will continue to be in communication with nearby communities about its work.