Share Price PullbackI have to wonder if this rally will be sustained.
The simple announcement that CZN hired a firm to provide “tender packages” to then hire qualified bidders over the 1
st and 2
nd quarters of 2014 is not reason enough for the price to rise.
Perhaps some expect that the optimization study will be out soon, but not even road construction has even begun yet and the mine is still 2 years away. Regardless, that will be another "Sell on News" event.
We all know that Canadian Zinc needs financing.
CZN has said that they need the MVLWB to extend the permits in order to attract financing institutions.
The MVLWB has now just ruled that they cannot defer activation dates but only extend the LUP and WL by 2 years and only after scheduling a Public Hearing.
Therefore, CZN and financial institutions will now have to wait further to be assured of permit extensions and only after Public Hearings are conducted.
Meanwhile, the MVLWB is now asking Canadian Zinc to answer these questions (link below) by
February 11
th:
“APPENDIX 1: INFORMATION REQUESTS
1. Please confirm that CZN continues to hold a surface tenure at the Prairie Creek
mine site. Lease #95F/10-5-5 appears to have lapsed on March 31, 2013. Describe
or explain the current mine site surface tenure and provide a true copy of any
replacement agreement.
2. Please confirm that the Abandonment and Restoration Plan found as an annex to
lease 95F/10-5-5 remains legally binding on CZN. Explain CZN’s view of the
relevance of this Plan to the Board’s assessment of historical, current and future
liability and the cost of closure and reclamation of the site.
3. Confirm for the Board that Aboriginal Affairs and Northern Development Canada
(AANDC) continues to hold $250,000.00 in CZN security for Closure and
Reclamation of the Prairie Creek Mine pursuant to the surface lease for the site.
4. The Board relied on the evidence provided by CZN and AANDC in making its
decisions about the Licence Applicant’s liability for Closure and Restoration of the
Prairie Creek site. It now appears that the Board was not provided with essential
information and that the scope of this liability and the resulting amount of security
ordered by the Licence may not be accurate. Please advise the Board of any
additional information and documents (not already provided in the December 22,
2013 letter) held by CZN which may be relevant to an amended determination of
closure and reclamation liability and quantum of security for this site.
5. Provide copies of all relevant documents, analyses, correspondence and
information referenced in question 4 to the Board. Provide a list of any protected
documents which may not be released to the Board.
6. Please provide a certificate signed by a Corporate Officer that all information not
protected by law which is relevant to the determination of an amended assessment
of liability and security for the Prairie Creek mine site has been provided to the
Board.”
On such a thin depth chart as CZN’s, it is easy to see the price rise and fall rapidly.
Either way, millions in permit fees and capital expenditure will be required to be paid soon.
My guess is that this is a sucker rally or the price is being moved to prepare for a
$50 million/100 million share dilution that analysts have been predicting.
https://www.mvlwb.ca/Boards/mv/Registry/2008/MV2008D0014/MV2008D0014%20%20AND%20MV2008L2-0002%20-%20CZN%20-%20Information%20Request%20%20to%20CZN%20-%20Jan21-14.pdf