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.

 

Mineral Resource Estimate

The most recent National Instrument ("NI") 43-101 compliant resource estimate was completed by Qualified Persons, as defined by NI 43-101, J. Morton Shannon, P.Geo. and Dinara Nussipakynova, P. Geo. of AMC Mining Consultants (Canada) Ltd. on May 31, 2012.

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)

 

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, 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