CZN article in Mining LifeMaybe will will get another run-up on Monday???
Cheers
Dee10
Minews Story
Date : September 26, 2003
Canadian Zinc Corporation Comes Back To Life With A Vengeance Now Permits For Prairie Creek Mine Have Been Granted.
Nothing has been heard for some time from Canadian Zinc Corporation as the company had to go into virtual hibernation while it waited for formal planning permits to develop its long life, high grade Prairie Creek silver-zinc mine in the Northwest Territories. It all took an inordinately long time as various authorities put the dead hand of bureaucracy on the process. The mine itself has a resource of 11.8 million tones grading 12.5% zinc, 10.1% lead 161 g/t silver and 0.4% copper The combined zinc/lead grade at greater than 22 per cent metal per tonne places Prairie Creek amongst the highest grade mines in the world.
The relevant permits have now been issued for mining exploration and associated activities, including underground decline development, and for a metallurgic pilot plant. Following an exhaustive permitting process, including a full environmental review by the McKenzie Valley Environmental Review Board, and approval by the federal Minister for Indian and Northern Affairs, the Mackenzie Valley Land and Water Board, which is the premier permitting agency in the region, has issued the land use permit and a type B water licence for the Prairie Creek mine for a period of five years commencing Sept. 10, 2003.
The mine, mill and supporting infrastructure are virtually complete and have been valued at around C$100 million. A scoping study was carried out in 2001 which demonstrated a viable commercial mine with a life of at least 18 years subject to the receipt of the permits and metal prices at the time. The mine was originally constructed, primarily as a silver mine, in 1982 but never achieved commercial production. During the 1990s Canadian Zinc significantly increased the mineral resource base at Prairie Creek. Throughout 2003 further reviews and refinements of the scoping study were carried out focusing on maximizing the silver production from the mine.
News of the receipt of the permits drove the price of the shares up from C$0.20 cents to nearly C$0.70 cents and it is said that a lot of the buying came from America where investors were particularly interested in the significant silver resource of over 70 million ounces, with the average silver grade of the resource of over 5 ounces per tonne. The studies recently carried out demonstrate that Prairie Creek will have a silver production cash cost, after all by-product credits, of approximately US$1.70 per ounce. With the recent recovery in the price of silver to US$5.20/ounce this would represent a very healthy cash operating margin of US$3.50/ ounce, or the equivalent of about US$250-million over the life of the mine.
In addition, further refinement of the scoping study has indicated that a high-grade start-up plan, from the decline area, would allow the production of about seven million ounces of silver per year for the first three years of mine life at an average silver cash cost, after all by- product credits, of about US$1.48 /ounce as typical silver grades of the high-grade sections are about 10 ounces/ tonne. The proposed decline development will provide access to the vein mineralisation below the current four kilometres of mine workings and allow drilling of the high-grade core area that will form the nucleus of the startup of operations. The metallurgical pilot plant with a capacity of one tonne/ hour will produce concentrates of copper, lead and zinc, containing significant amounts of silver. These concentrates while limited in volume will allow the company to optimize concentrate quality and metallurgical efficiency.
According to chairman John Kearney the plan now is to drive the decline to carry out the underground development and drilling and to start operating the mill during the next 2004 working season. The results can be used in the final feasibility and to complete the permitting exercise for final mine development. If all goes well this could be a very exciting story over the next couple of years and the project should benefit from the anticipated improvement in the prices of silver and silver and zinc.
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