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 Estimate

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

The new March 2015 mineral resource estimate has demonstrated an increase in the overall tonnage of measured and indicated resources. The new updated estimate, with increases in both the vein and stockwork tonnages in the indicated category, will increase the life-of-mine potential compared to the 2012 resource estimate.

  • Total Measured and Indicated Resource tonnages increased by 21% to 6.5 million tonnes at combined grade of approximately 20% Pb and Zn with approximately 150 g/t Ag, details of which include:
    • an 11% increase in Vein tonnage to 4.1 M tonnes grading 12.4% Pb, 11.2% Zn, 199 g/t Ag;
    • an increase in Stockwork tonnage to 1.4 M tonnes grading 4.0% Pb, 7.1% Zn, 63 g/t Ag from the previous stockwork estimate of 410,000 tonnes grading 3.7% Pb, 7.7% Zn, 69 g/t Ag;
    • a more constrained classification of Stratabound mineralization has shifted the previously reported tonnage from the Measured category to the Indicated category and decreased the tonnage by 17% to 1.1 M tonnes grading 5.4% Pb, 10.8% Zn, 55 g/t Ag.
  • Total Inferred Resource tonnages increased by 13% to 7.1 M tonnes grading 9.6% Pb, 11.7% Zn, and 177 g/t Ag from 6.2 M tonnes grading 11.5% Pb; 14.5% Zn; and 229 g/t Ag.

The following table shows the detail of the 2015 Mineral Resource estimate by resource category and mineralization style.

Mineral Resource Estimate for Prairie Creek Mine (March 2015)

Zone Class Tonnes (Mt) Zn (%) Pb (%) Ag (g/t)
Main Quartz Vein Measured 1.279 13.2 11.6 211
Indicated 2.850 10.2 12.8 193
Measured + Indicated 4.129 11.2 12.4 199
Inferred 6.132 12.6 10.4 195
Stockwork Measured 0 0.0 0.0 0
Indicated 1.400 7.1 4.0 63
Measured + Indicated 1.400 7.1 4.0 63
Inferred 0.790 4.7 4.0 61
Stratabound Measured 0 0.0 0.0 0
Indicated 1.059 10.8 5.4 55
Measured + Indicated 1.059 10.8 5.4 55
Inferred 0.156 11.0 6.6 63
Notes: Estimated at a cut-off grade of 8% Zn-Eq based on prices of US$1.00/lb for both zinc and lead and US$20/oz for silver, with average processing recovery factors of 78% for Zn, 89% for Pb and 93% for Ag, and average payables of 85% for Zn, 95% for Pb and 81% for Ag.

 

The following table compares the 2015 overall mineral resource with the previous 2012 overall mineral resource at the Prairie Creek Mine: The Company does not consider the changes in the mineral resource estimates to be a material change in respect of the affairs of the Company.

Overall Resource Estimate:
March 2015
     Overall Resource Estimate:
June 2012
Total MQV+STK+SMS Tonnes (Mt) Zn (%) Pb (%) Ag (g/t)      Tonnes (Mt) Zn (%) Pb (%) Ag (g/t)
Measured 1.279 13.2 11.6 211      1.700 12.1 9.7 155
Indicated 5.309 9.5 9.0 131      3.731 10.2 10.5 162
Measured + Indicated 6.588 10.2 9.5 147      5.431 10.8 10.2 160
Inferred 7.078 11.7 9.6 177      6.239 14.5 11.5 229

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

  • Including data from 50 additional diamond drill holes and 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 en-echelon bodies.
  • 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.

 

2012 Resource Estimation Details

Previously on May 31, 2012, J. Morton Shannon, P.Geo. and Dinara Nussipakynova, P. Geo., of AMC Mining Consultants (Canada) Ltd. completed a NI 43-101 compliant resource estimate for Prairie Creek.

AMC reported a Measured and Indicated resource of 5.43 million tonnes at a grade of 10.8% Zn, 10.2% Pb, 160 g/t Ag and 0.31% Cu and an Inferred resource of 6.24 million tonnes at a grade of 14.5% Zn, 11.5% Pb 229 g/t Ag and 0.57% Cu. The resources were estimated in accordance to the definitions stated in the Canadian Institute of Mining and Metallurgy and Petroleum “Standards on Mineral Resources and Mineral Reserves” adopted by the CIM Council on November 14, 2000 (CIMM 2000) and qualifies as NI 43-101 compliant. The Measured, Indicated and Inferred resources are tabulated below:

Mineral Resource Estimate for Prairie Creek Mine

Zone

Class

Tonnes (Mt)

Zn (%)

Pb (%)

Ag (g/t)

Cu (%)

Main Quartz Vein

Measured

1.055

13.2

11.5

209

0.45

 

Indicated

2.680

10.5

12.7

200

0.43

 

Measured + Indicated

3.736

11.3

12.4

202

0.43

 

Inferred

6.236

14.5

11.5

229

0.57

Stockwork

Indicated

0.410

7.7

3.7

69

0.15

Stratabound

Measured

0.640

10.5

6.8

67

0.00

 

Indicated

0.641

10.6

5.4

63

0.00

 

Measured + Indicated

1.281

10.5

6.1

65

0.00

 

Inferred

0.003

12.4

5.1

46

0.00

Totals

Measured

1.700

12.1

9.7

155

0.28

 

Indicated

3.731

10.2

10.5

162

0.32

 

Measured + Indicated

5.431

10.8

10.2

160

0.31

 

Inferred

6.239

14.5

11.5

229

0.57

 
Notes:
  1. Mineral Resources are stated as of May 31, 2012
  2. Mineral Resources include Mineral Reserves
  3. Stated at a cut-off grade of 8% Zn-Eq based prices of $1.30/lb for both zinc and lead, and $35/oz for silver.
  4. Average processing recovery factors of 78% for Zn, 89% for Pb and 93% for Ag.
  5. Average payables of 85% for Zn, 95% for Pb and 81% for Ag.
  6. $ Exchange rate = 1 CD/USD
     
    MQV RESOURCE LONG SECTION VIEW

    MQV longitudinal section class

    Distribution of Main Quartz Vein Resources, by Resource Classification (looking west, the areas highlighted in light blue are those captured by the 500 m search radius and are not included in resource estimate.)

 

SMS RESOURCE PLAN VIEW

SMS plan class

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

 

2012 Resource Estimation Details

Core Boxes Inspecting Core BoxesAMC visited the Prairie Creek Mine Site to review and verify the Prairie Creek database and review the resource model, making minor adjustments to the classification. The database comprises both underground and surface drill holes in addition to channel samples. Two block models were created: 1) encompassing the Main Quartz Vein (“MQV”) and stockwork (“STK”) solids and 2) for the stratabound (“SMS”) solid. Block values were computed by the inverse distance to the second power in all cases. Three passes were performed for zinc, lead and silver for SMS, and included copper in the case of MQV and STK. Specific gravity was interpolated from collected data for the MQV and SMS, while the STK was assigned a value of 3.31.

 

Mineral Reserves

In conjunction with an Independent Mineral Resource in 2012, an Independent Mineral Reserve estimate was prepared by Barrie Hancock, P.Eng., who is an Independent Qualified Person as defined by NI 43-101.

 

planned ug workingsPlanned Underground Mine Design For The First 11 Years of Operation

Reserves Estimate

A portion of the Mineral Resources was converted to Mineral Reserves through application of suitable Core BoxNQ Size Drill Coredilution factors in stoping blocks (averaging 22% for MQV and 10% for SMS) utilizing the cut-and-fill mining method for MQV and room-and-pillar for SMS. A Mineral Reserve of 5.22 million tonnes, grading 9.4% Zn and 9.5% Pb, with 151 g/t Ag has been estimated.

Due to the high grade nature of the deposit, the majority of the vein resource will be mined, allowing for 97% of all of the Measured and Indicated vein resources to be converted to Mineral Reserves and 57% of all measured and indicated resources within the SMS mineralization to be converted to Reserves.The reserves were estimated in accordance to the definitions stated in the Canadian Institute of Mining and Metallurgy and Petroleum “Standards on Mineral Resources and Mineral Reserves” adopted by the CIM Council on November 14, 2000 (CIMM 2000) and qualifies as NI 43-101 compliant. The Proven and Probable reserves are tabulated below:

 

Mineral Reserve Estimate for Prairie Creek Mine

Zone

Class

Tonnes (Mt)

Zn (%)

Pb (%)

Ag (g/t)

Main Quartz Vein

Proven

1.278

10.8

9.4

172

 

Probable

3.140

8.7

10.5

165

 

Proven and Probable

4.418

9.3

10.2

167

           

Stratabound

Probable

0.803

9.5

5.7

62

           

Total Mineral Reserves

5.222

9.4

9.5

151

Notes:

  1. Mineral Reserves are stated as of May 31, 2012
  2. Mining cut-off grade of 10% Zn-Eq based upon total variable operating cost of $162/t including mining, processing and transportation.
  3. Metal prices assumed are Zn = $1.10/lb, Pb = $1.10/lb and Ag = $28/oz.
  4. Average processing recovery factors of 75% for Zn, 88% for Pb and 92% for Ag.
  5. Average payables of 85% for Zn, 95% for Pb and 81% for Ag.
  6. $ Exchange rate = 1 CD/USD

 

To view the complete June 15, 2012 Technical Report please click on the image below.

 

712017 Canadian Zinc Prairie Creek NI 43-101 June 2012NI 43-101 June 2012(Revised July 2014)

 

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