Prairie Creek Mine shows signs of life
Canadian Zinc pens memorandums of agreement with Korea Zinc, Boliden
April Hudson
Northern News Services
Monday, March 21, 2016
TTHENAAGO/NAHANNI BUTTE
Memorandums of understanding between Canadian Zinc Corporation and two metal companies for deposits at Prairie Creek Mine could see the company selling thousands of tonnes of concentrate each year.
On March 3, Canadian Zinc Corporation announced that the Prairie Creek Mine, located near Nahanni Butte, will be supplying between 40,000 and 70,000 metric tonnes of zinc concentrates and between 20,000 and 25,000 metric tonnes of lead concentrates per year to Korea Zinc and Boliden.
The agreement will be for a minimum of five years, beginning when Prairie Creek Mine starts up again. The mine is expected to start up in the summer.
Exact amounts of concentrates will be agreed upon at a later date.
Although the memorandums are not legally binding, Canadian Zinc's chief operating officer and vice-president for exploration Alan Taylor said it can be taken as an expression of interest.
"(The MOUs) are a preliminary indication of further negotiations to be done," he said. "It means a lot to the operation and to our investor base ... (it) gives the investor base more confidence to perhaps increase their interest and financing toward the mine."
Canadian Zinc ran an underground exploration drilling program at Prairie Creek Mine in 2015, which succeeded in extending the expected life of the mine and revealed new deposits of metals.
Prairie Creek Mine closed early for the season on Sept. 29 due to low lead and zinc prices. In mid-December, Wilbert Antoine, Canadian Zinc's manager of northern development, told News/North the mine would likely not re-open until May or June.
Taylor said the date of re-opening is yet to be determined. There are currently no programs scheduled for 2016 at the mine site, although Canadian Zinc is still doing engineering, design and mine planning as well as resource calculations from its Vancouver office.
In its news release, Canadian Zinc said the memorandums signed with Korea Zinc and Boliden include commercial terms, which are being kept confidential.
The quantities of metals agreed upon represent the entire planned production of zinc concentrate and half of the planned production of lead concentrate for the first five years of Prairie Creek Mine's operation.
Concentrates will likely be shipped out of Vancouver, with shipping schedules and lot sizes to be agreed upon on each shipping season.
Any remaining concentrate produced by the mine will be available for other buyers, according to the news release.
Canadian Zinc is still in the midst of its application to the Mackenzie Valley Land and Water Board for an all-season road permit to Prairie Creek Mine.
Currently, that application is at the environmental assessment stage.
Taylor said the company plans to issue an economic report soon which will include a pre-feasibility study on the mine. That report is expected to update mine operations based on the presence of an all-season road, and from there Canadian Zinc will be able to determine how much capital will need to be raised for the mine.
"It costs a lot to open up the mine site and you need a significant program running to really justify that," Taylor said.
The application for the road remains before the board.
