NORZINC LTD.

NorZinc will file a Form 15F to end its US registration and reporting, saying the cost outweighs the benefit. The shares keep trading on the Toronto Stock Exchange and are expected to stay quoted on OTCQB, so this ends the SEC record rather than the shareholding - and it ends this database's view of a company that had permits, a feasibility study and no mine.

registration revoked

The C$8 million royalty sale to RCF closed and the proceeds went straight back out to repay RCF's US$6 million interim loan with 8% interest. Prairie Creek now carries two net smelter royalties, Sandstorm's 1.2% from 2013 and RCF's new 1%, and RCF holds about 41% of the shares.

capital raising announcement

RCF agrees to buy a 1% net smelter royalty on Prairie Creek for C$8 million and to lend up to US$6 million in the meantime. It is the second royalty sold on the same mine, after Sandstorm's 1.2% for US$10 million in 2013, and Sandstorm holds a right of first refusal over this one. The stated purpose is to fund the company through completion of permitting.

debt financing

NorZinc has filed its post-environmental-assessment information package with the Mackenzie Valley Land and Water Board and Parks Canada, starting the final permitting stage for the all-season road. It follows the ministers' acceptance of the Review Board's recommendation on 9 October 2018, which resolves the decision wait from earlier filings. Regulators have indicated a process of about 7 months once the package is accepted as complete, which the company says keeps road construction on track to begin in Q1 2020; a Traditional Land Use Agreement was signed with the Naha Dehe Dene Band, and two other Indigenous agreements are described as well advanced. The permits are not yet issued.

regulatory community update

Mercator's new Lemarchant estimate, the first since 2012: 2.42 million tonnes indicated at 6.15% zinc, 1.60% lead, 0.68% copper, 1.22 g/t gold, 64.0 g/t silver and 23.5% barite, plus 0.56 million tonnes inferred, drawn from 165 holes of which 91 were drilled by the company between 2013 and 2017. Contained zinc in the indicated category is up 123% on 2012, and bench tests produced a 97.75% barite concentrate. Filed under the company's new name, NorZinc.

resource reserve update

The $20 million closed on 10 July, and the proceeds repay RCF's own US$10 million bridge loan from December 2017. The investor agreement was amended at the same time to let RCF nominate additional directors and take project oversight rights, and RCF VI L.P. transferred its shares into RCF VI CAD LLC. RCF ends up holding about 41% of a company that has never produced, having also been its lender.

capital raising announcement

Shareholders approved the RCF placement and a corporate reorganisation at the annual meeting, and Don MacDonald was confirmed as chief executive. On closing, RCF and its associates will hold about 41% of the shares, or 48% if the warrants are exercised.

capital raising announcement

Resource Capital Fund VI, already the largest shareholder, agrees to put in $20 million for 100 million shares at $0.20 plus 50 million warrants at $0.25 expiring 31 December 2018. The price is a 61% premium to the ten-day average, but part of the money simply repays a US$10 million bridge loan RCF itself advanced in December 2017. Don MacDonald is appointed president and is to become chief executive, ending John Kearney's run in that role.

capital raising announcement

The full feasibility study lands: mining rate up 18.5% to 1,600 tonnes a day, mill throughput up 25%, lower operating costs, power from the territorial utility with an integrated LNG supply, and an all-season road. Pre-tax net present value is $344 million at 8% with a 24% return, and $188 million at 18% after tax, over an initial 15-year life - better economics than the corrected 2016 figures of $284 million and 23%, but on a shorter mine life than the 17 years then assumed.

resource reserve update

Ten holes and three extensions for 3,070 m pushed the Lemarchant deposit 25 to 65 m further up-dip. LM17-116 returned 6.0 m at 14.06% zinc, 6.27% lead, 1.88% copper, 382.9 g/t silver and 2.01 g/t gold, and LM17-115 7.1 m at 10.23% zinc, 148.4 g/t silver and 2.41 g/t gold.

drilling result

HCF International Advisers of London is appointed to arrange project debt for Prairie Creek. No debt is committed: HCF is at the first of three stages, building a funding strategy and sounding out potential lenders, against the 2016 study's $250 million capital cost, of which the company hopes to borrow up to 70%.

debt financing

AMC and Ausenco are engaged to take Prairie Creek from prefeasibility to a definitive feasibility study, expected by mid-2017. The stated reason is that talks with financial institutions confirmed a bankable study would be needed before project debt could be raised.

resource reserve update

The corrected technical report is re-filed, closing out the September disclosure. The base case now shows a pre-tax net present value of $284 million at 8% with a 23% return, and $155 million post-tax at 18%, against the $509 million and 32% published in March.

resource reserve update

An error was found in the 2016 prefeasibility study's own economic model, five and a half months after it was published: gross smelter revenue over the 17-year life had been overstated at $3.7 billion instead of $3.3 billion, because by-product metals in the primary concentrates were credited as payable when they may not be. Resources, reserves, mine plan and costs are unchanged, but the pre-tax net present value falls to $284 million from $509 million, the return to 23% from 32%, and payback stretches from three years to four.

resource reserve update

A $10.2 million offering closed with the over-allotment taken in full: 34,135,000 common shares and 6,665,000 flow-through shares, all priced at $0.25. That is well below the $0.35 unit price of the July 2014 raise, and the proceeds are for feasibility and development work at Prairie Creek and exploration in Newfoundland.

capital raising announcement

The 2016 prefeasibility study turns the enlarged resource into a 17-year mine life, with a pre-tax net present value of $509 million at an 8% discount rate and a 32% return, or $302 million and 26% after tax, using US$1.00/lb for zinc and lead and US$19/oz silver. Planned output is about 60,000 tonnes of zinc concentrate and 55,000 tonnes of lead concentrate a year.

resource reserve update

Third-quarter 2015 results: $7.0 million was spent on Prairie Creek exploration and development in nine months, and working capital stood at $2.66 million. A further $1.55 million was posted with the Northwest Territories government as reclamation security, and the nine-month net loss was $8.2 million.

quarterly activities report

The 2015 underground drilling paid off in the estimate: measured and indicated resources rose 32% to 8.7 million tonnes from 6.6 million, the Main Quartz Vein indicated tonnage up 48% to 4.2 Mt at 11.6% lead, 9.2% zinc and 168 g/t silver, and stockwork indicated up 40% to 2.0 Mt. Total inferred tonnage is unchanged because vein tonnes upgraded to indicated were replaced by newly inferred stockwork, and as in March the added tonnes carry lower grades than the ones they join.

resource reserve update

The final seven holes all hit mineralisation and the northernmost was the best of the year: PCU-15-72 returned 7.5 m at 33.67% zinc, 17.77% lead and 247 g/t silver in vein, then 24.5 m at 11.95% zinc, 6.92% lead and 116 g/t silver of stockwork, then a second vein over 4.5 m. PCU-15-69 gave 13.0 m at 28.15% zinc, 21.5% lead and 452 g/t silver. Mineralisation is still open to the north, into ground currently classed as inferred.

drilling result

A second, previously unknown vein was found 75 m into the footwall of the Main Quartz Vein: PCU-15-62 cut 5.4 m at 19.8% zinc, 8.3% lead and 150 g/t silver, and PCU-15-65 intersected it again on the next section 50 m north. The same batch produced the program's thickest vein intercept, 8.4 m at 22.7% lead, 9.7% zinc and 226 g/t silver in PCU-15-64, and stockwork of 2.4 m at 32.7% zinc, 24.7% lead and 311 g/t silver.

drilling result

Underground chip sampling in the Northwest Drift on the 870 m level returned 4.4 m of true width grading 14.2% zinc, 5.6% lead and 119 g/t silver over 71.8 m of strike. This pointed to the potential of the stockwork for early, selective mining.

drilling result

All four of the first underground holes hit the Main Quartz Vein. The best, PCU-15-53, returned about 3.0 m of true width grading roughly 30% zinc, 27.5% lead and 289 g/t silver, though the release transposes the zinc and lead figures between its headline and its text. PCU-15-52 gave 5.36 m of stockwork at 11.9% zinc, 7.2% lead and 89 g/t silver. These are the grades needed to move inferred tonnes into the indicated category for the coming study update.

drilling result

AMC's rebuilt Prairie Creek estimate raises measured and indicated resources to 6.59 million tonnes at 10.2% zinc, 9.5% lead and 147 g/t silver from 5.43 million tonnes at 10.8%, 10.2% and 160 g/t in 2012, and inferred to 7.08 million tonnes at 11.7% zinc, 9.6% lead and 177 g/t silver from 6.24 million tonnes at 14.5%, 11.5% and 229 g/t. More tonnes at lower grades: the extra tonnage comes from 50 additional holes and underground chip sampling, and the fall in inferred grade from tighter geological constraints and a change of estimation method, not from anything found underground.

resource reserve update

Procon Mining and Tunneling won the tender to rehabilitate the Prairie Creek workings and carry out underground development and initial production. Procon did the 2004/5 rehabilitation and drove the 650 m exploration decline in 2006/7, and it is that decline the new drilling will be collared from.

material agreement

The bought deal closed at $15.75 million gross, $10.0 million of units at $0.35 and $5.75 million of flow-through shares at $0.38 after the underwriters took part of the over-allotment. The unit money is for starting underground development at Prairie Creek, opening the winter access road, finishing the optimisation study and posting reclamation security.

capital raising announcement

A $15 million bought deal is agreed with Dundee, Canaccord Genuity and Paradigm: 13,160,000 flow-through shares at $0.38 for $5.0 million and 28,572,000 units at $0.35 for $10.0 million, each unit carrying half a warrant exercisable at $0.50 for three years.

capital raising announcement

In Newfoundland, 15 holes for 4,928 m extended the Northwest zone found earlier in 2013, 250 m from the Lemarchant deposit, to a 100 m strike length that is still open. The best intercept was 8.7 m at 8.21% zinc, 3.66% lead, 0.72% copper, 150.0 g/t silver and 3.24 g/t gold, with single samples of 463 g/t silver over 1.0 m and 17.5 g/t gold over 0.8 m.

drilling result

Canadian Zinc raised US$10 million by selling Sandstorm Metals & Energy a 1.2% net smelter return royalty over Prairie Creek, keeping a 30-month right to buy it back at cost if Sandstorm funds a metal stream of at least US$90 million, on which Sandstorm took first refusal. Money raised without issuing shares, against a reserve of 5.2 million tonnes at 9.4% zinc, 9.5% lead and 151 g/t silver and a 2012 study showing a $193 million capital cost.

asset acquisition disposition

The 2012 program drilled 5,629 m in 12 holes at Prairie Creek and produced the richest silver ever reported on the property, 1.3 m at 2,059 g/t silver in PC-12-216, plus a coincident electromagnetic and gravity anomaly about a kilometre from the mill that became the 2013 priority target. The same filing carries the business acquisition report for Paragon Minerals, bought by plan of arrangement on 24 September 2012, which is how the Newfoundland projects came into the company.

drilling result

Canadian Zinc completed its acquisition of Paragon Minerals on 24 September 2012, issuing 7,296,298 shares for the 53,649,254 Paragon shares it did not already own (0.136 Canadian Zinc share per Paragon share). Paragon holders end up with about 4.5% of the combined company. This brings in the South Tally Pond property in Newfoundland, including the Lemarchant deposit (indicated 1.24 Mt at 5.38% zinc; inferred 1.34 Mt), which is the start of the Newfoundland package in context. The filing also lists an 30 August 2012 press release on cooperation with the Northwest Territories government, with only its headline in the text provided.

regulatory community update

Q1 2012 results (three months to 31 March 2012): net loss of $2.53 million, much smaller than $14.24 million a year earlier because the loss on marketable securities fell from $12.88 million to $1.51 million. The company raised $9.12 million by issuing 13,610,000 shares at $0.67 (this continues the February 2012 Zhongrun placement in context), lifting shares outstanding to 156,719,112 and short-term investments to $13.68 million. The filing is also tagged to a 15 May 2012 press release headlined as approving additional permits for Prairie Creek: a decline development permit, a road land use permit and a work plan on the Class 'A' water licence; only the headline is in the text provided.

regulatory community update

One filing carrying three announcements: Zhongrun International Mining of Shandong bought a further 6,000,000 units at $0.67 on 10 February, taking it to 15,000,000 shares and 7,500,000 warrants, about 9.6% undiluted; the last two holes of the 2011 program returned 2.54 m at 9.93% zinc, 20.18% lead and 239 g/t silver and 10.68 m at 6.53% zinc, 8.03% lead and 92 g/t silver just south of the defined resource, on two previously unrecognised sub-parallel veins; and on 5 March the company renewed its memorandum of understanding with Parks Canada covering development of Prairie Creek beside the Nahanni National Park Reserve that surrounds it.

material agreement

The filing bundled press releases from December 2011 to early January 2012. The 9 December release reported that the Mackenzie Valley Environmental Impact Review Board found the Prairie Creek Mine unlikely to cause significant adverse impacts and sent the project on to the regulatory permitting phase.

capital raising announcement

Second-quarter 2011 results (six months to 30 June 2011) show a net loss of $24.55 million, driven mainly by a $21.03 million loss on marketable securities, against a $2.7 million profit in the same period of 2010. Marketable securities fell from $39.4 million at end-2010 to $18.4 million and cash from $4.46 million to $1.08 million, with $3.33 million in short-term investments; this continues the share-portfolio swings in the context. The filing is also tagged to an August 2011 press release on $3 million of federal funding for training Aboriginal employees at Prairie Creek; only its headline appears in the text provided, so no further detail is stated. The statements say the company has no debt and enough resources to operate for twelve months, but that significant additional financing would be needed if operating permits are received.

regulatory community update

A $5 million unit placement at $0.90, each unit carrying half a warrant at $1.15 for 18 months, agented by Northern Securities with a $1 million over-allotment, to advance Prairie Creek towards production. The price has more than doubled from the $0.40 flow-through of June 2010 in eleven months, and $0.90 is the highest the company raises at anywhere in this record.

capital raising announcement

A filing covering four items: a 5 July press release on further vein and stratabound mineralisation at Prairie Creek, a 12 July announcement that surface exploration drilling began, an 18 July $10 million private placement with Sprott Asset Management, and the June proxy voting results.

drilling result

The earliest cached event, and the record starts mid-programme rather than at a beginning: underground drilling from the newly driven decline at Prairie Creek returned the first six holes of Section 50650N, including PCU-06-003 with 6.40 m at 12.42% zinc, 15.55% lead, 396 g/t silver and 1.185% copper, and PCU-06-001 with 4.59 m at 23.87% zinc, 9.11% lead and 170 g/t silver. One hole, PCU-06-004, found no significant mineralisation.

drilling result