Mineral Resources and Reserves

 Installing Anchor Bolts A number of historical mineral resource and reserve estimates have been compiled and reported for the Main Zone deposits at Prairie Creek. It is apparent from consideration of the various resource and reserve statements that they consistently reflect a high grade, lead-zinc-silver-copper vein-type deposit.

2015 Mineral Resource Estimates

Canadian Zinc completed two Mineral Resource updates on the Prairie Creek Project in 2015, one in March and a more recent update released in September that incorporates exploration drilling completed in 2015.

The most recent Prairie Creek Mineral Resource estimate was completed in September 2015, by AMC Mining Consultants Ltd. (AMC) [Gregory Z. Mosher P.Geo. Qualified Person (QP), as defined by NI 43-101]. AMC also completed the previous mineral resource estimate in March 2015 [Gregory Z. Mosher P.Geo., and J. Morton Shannon, P.Geo., Qualified Persons (QPs), as defined by NI 43-101] and the Mineral Resource estimate defined in the Technical Report filed in August 2012.

The new September 2015 mineral resource estimate has demonstrated an increase in the overall tonnage of Measured and Indicated Resources which will increase the life-of-mine potential compared to the 2012 resource estimate.

  • Total Measured and Indicated Mineral Resource tonnages for the Prairie Creek Mine increased by 32% to 8.7 million tonnes from 6.6 million tonnes (“Mt”). Highlights of the changes include:
    • A 48% increase in the Main Quartz Vein Indicated Mineral Resource tonnage to 4.2 Mt grading 11.6% Pb, 9.2% Zn, 168 g/t Ag, from 2.8 Mt grading 12.8% Pb, 10.2% Zn and 193 g/t Ag;
    • A 40% increase in Stockwork Indicated Mineral Resource to 2.0 Mt grading 3.5% Pb, 6.6% Zn, 61 g/t Ag, from 1.40 Mt grading 4.0% Pb, 7.1% Zn and 63 g/t Ag;
    • A new Measured Mineral Resource has now been defined in Stockwork mineralization at 169,000 t grading 5.3% Pb, 12.6% Zn, 116 g/t Ag.
  • Total Inferred Resource tonnage remains unchanged with an increase in Stockwork replacing upgraded Main Quartz Vein resources.
    • A 100% increase in Stockwork Inferred Mineral Resource tonnage to 1.6 Mt grading 4.6% Pb, 6.2% Zn, 70 g/t Ag from 790,000 t grading 4.0% Pb, 4.7% Zn, 61 g/t Ag;
    • As Inferred Main Quartz Vein tonnes were converted to the Indicated category through detailed 2015 infill drilling, the Main Quartz Vein Inferred tonnage decreased to 5.3 Mt grading 8.7% Pb, 12.9% Zn, 199 g/t Ag from 6.1 Mt grading 10.4% Pb, 12.6% Zn and 195 g/t Ag.

 

September 2015 Mineral Resources Prairie Creek Mine

Mineral Zone

Classification

Tonnes (t)

Silver (g/t)

Lead (%)

Zinc (%)

Main Quartz Vein (MQV)

Measured

1,313,000

211

11.5

13.2

Indicated

4,227,000

168

11.6

9.2

Measured & Indicated

5,540,000

178

11.6

10.2

Inferred

5,269,000

199

8.7

12.9

Stockwork (STK)

Measured

169,000

116

5.3

12.6

Indicated

1,953,000

61

3.5

6.6

Measured & Indicated

2,122,000

66

3.6

7.1

Inferred

1,610,000

70

4.6

6.2

Stratabound (SMS)

Indicated

1,042,000

54

5.2

10.8

Measured & Indicated

1,042,000

54

5.2

10.8

Inferred

170,000

60

6.3

11.2

TOTAL

Measured

1,482,000

200

10.8

13.2

Indicated

7,222,000

123

8.5

8.7

Measured & Indicated

8,704,000

136

8.9

9.5

Inferred

7,049,000

166

7.7

11.3

Notes: Mineral Resources are stated as of 10 September 2015. Mineral Resources include those Resources converted to Mineral Reserves. Stated at a cut-off grade of 8% ZnEq based on prices of US$1.00/lb for both zinc and lead, and US$20/oz for silver. Average processing recovery factors of 78% for Zn, 89% for Pb, and 93% for Ag. Average payables of 85% for Zn, 95% for Pb, and 81% for Ag. ZnEq% = (grade of Zn in %) + [(grade of lead in % * price of lead in $/lb * 22.046 * recovery of lead in % * payable lead in %) + (grade of silver in g/t* (price of silver in US$/Troy oz/ 31.10348) * recovery of silver in % * payable silver in %)] / (price of zinc in US$/lb*22.046 * recovery of zinc in % * payable zinc in %). $ Exchange rate = 1 CAD/USD. The September 2015 Prairie Creek Mine Mineral Resource estimate was completed by Gregory Z. Mosher, P.Geo, Qualified Person (“QP”), as defined by National Instrument 43-101 (“NI 43-101”) of AMC Mining Consultants (Canada) Ltd.

 

MQV RESOURCE LONG SECTION VIEW

MQV longitudinal section class

Distribution of Main Quartz Vein Resources, by Resource Classification

 

SMS RESOURCE PLAN VIEW

SMS plan class

Distribution of Stratabound Resources, by Resource Classification (looking vertically downwards)

 

The main differences between the 2015 and the 2012 resource estimates are attributed to:

  • Including data from 71 additional diamond drill holes and 22 underground chip samples.
  • More constraining factors used in the 2015 estimation, including block size, interpolation and minimum number of samples used.
  • The 2015 resource was estimated by ordinary Kriging; the 2012 resource was estimated using inverse distance squared.
  • The 2015 estimate used a regression equation to estimate bulk densities; the 2012 estimate used interpolated bulk density values and a single fixed value for the STK zone.
  • The 2015 block model incorporated LiDAR survey data which improved the accuracy in surface control when incorporating the new drill/chip data.
  • The geological interpretation was revised to subdivide the Main Quartz Vein into two partially-parallel extensions of the same vein, about 70m apart.
  • The total Inferred Mineral Resource was estimated with a 13% higher tonnage but at a lower grade as a result of using more constraining geological factors and more minimum sample points.

Mineral Reserves

The September 2015 Measured and Indicated Mineral Resource was subsequently converted into a new Mineral Reserve estimate of 7.6 million tonnes of Proven and Probable Reserves at a combined grade of 17% Pb and Zn plus 128 g/t Ag, which represents a 46% increase in Reserves compared to the 2012 PFS. The estimation of Mineral Reserves by AMC, is shown below.

March 2016 Mineral Reserves, Prairie Creek Mine

Mineral Zone

Classification

Tonnes (t)

Silver (g/t)

Lead (%)

Zinc (%)

Zinc Equivalent

Main Quartz Vein (MQV)

Proven

1,199,288

186

10.08

12.09

30.70

Probable

3,966,848

152.62

10.52

8.58

26.79

Total

5,166,136

160.37

10.42

9.39

27.70

Stockwork (STK)

Proven

174,656

105.01

4.80

11.48

20.83

Probable

1,297,665

60.72

3.41

6.64

12.87

Total

1,472,322

65.97

3.57

7.22

13.81

Stratabound (SMS)

Proven

-

 -  

 -  

 -  

 -  

Probable

965,132

46.09

4.38

9.03

16.12

Total

965,132

46.09

4.38

9.03

16.12

TOTAL

Proven

1,373,944

175.70

9.41

12.02

29.45

Probable

6,229,646

116.97

8.09

8.24

22.24

Total

7,603,590

127.58

8.33

8.93

23.54

Notes: Mineral Reserves are based on a cut-off grade of 12% ZnEq for LHOS, 11% ZnEq for DAF, an incremental cut-off grade of 9.7% ZnEq for incremental stoping and 7.1% ZnEq for development ore. Cut-off grades are based on a zinc metal price of US$1.00/lb, recovery of 75% and payable of 85%; a lead metal price of US$1.00/lb, recovery of 88% and payable of 95%; and a silver metal price of US$17/oz, recovery of 92% and payable of 81%. Average unplanned dilution and recovery of 14% and 95%, respectively, for LHOS and 6.4% and 95%, respectively, for DAF are assumed. Exchange rates used are CAD$1.25 = US$1.00. The March 2016 Prairie Creek Mine Mineral Reserve estimate was prepared by H. A. Smith, P.Eng, Qualified Person (“QP”), as defined by National Instrument 43-101 (“NI 43-101”) of AMC Mining Consultants (Canada) Ltd.

 

A Technical Report (the "Report") dated March 31, 2016, was prepared by AMC Consultants, with G. Z. Mosher, P.Geo., H. A. Smith, P.Eng., H. Ghaffari, P. Eng., J. Huang, P.Eng., and T. A. Morrisson, P.Eng., as the Qualified Persons, all independent of Canadian Zinc.

The 2016 Report indicates that the Prairie Creek Property hosts Measured and Indicated Resources of 8.70 million tonnes grading 9.5% Zn, 8.9% Pb, and 136 g/t Ag, which includes a reserve of 7.60 million tonnes averaging 8.93% Zn, 8.33% Pb, and 127.58 g/t Ag. In addition, the Report confirms a large Inferred Resource of 7.05 million tonnes grading 11.3% Zn, 7.7% Pb and 166 g/t Ag and additional exploration potential. The Report has been filed on SEDAR and may be viewed under the Company's profile at www.sedar.com, or by clicking below.

To view the complete March 31, 2016 (revised Sept 30, 2016) Technical Report please click on the image below.

715025 Canadian Zinc Prairie Creek NI 43-101 March 2016<br />(revised Sept 2016)NI 43-101 March 2016 (revised Sept 30, 2016)

 

DISCLAIMER

The “resource” grades and tonnages include all intercepts in the specific area and has no blocks removed by a cut off grade. The estimate includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the mineral resources will be converted to mineral reserves.

Cautionary Note to U.S. Investors – The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this website, such as “measured,” “indicated,” and “inferred” “resources,” which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F which may be secured from us, or from the SEC’s website at http://www.sec.gov/edgar.shtml