Canada Zinc Metals Corp (V.CZX) to use PDAC to showcase Cardiac Creek deposit

To stand out over dozens of other mining companies at the annual PDAC investor conference, a company needs to have nailed their pitch, developed a strong news timeline, and have a story arc that is just coming into fruition. Investors want a good story that nobody has figured out is good yet, to maximize the likelihood of a return, and the size of that return.

We asked the companies exhibiting at PDAC a series of questions about their companies and the greater resource sector in general, and Canada Zinc Metals Corp (TSXV:CZX, Forum) President and CEO Peeyush Varshney came exploding out of the blocks like an Olympic sprinter with a well thought out approach to company and country that, frankly, we thought worthy of its own spotlight.

Varshney is a seasoned investor and advisor on the Canadian public markets who, as part of Varshney Capital, has taken positions in companies such as Global Gardens (CSE:VGM, Forum), Rentmoola, and Mogo (TSX:GO, Forum). And with company stock currently sitting at an attractive price, and their zinc play coming together quickly, what better time to give it a look-see than right now?

So here is our pre-PDAC Q&A with Canada Zinc Metals Corp.

1. Is this your company’s first PDAC event? If so, what do you hope to get out of it? If not, how many times have you been in the past?

CZX has maintained an annual presence at the PDAC for several years and we look forward to PDAC 2016 to reconnect with existing shareholders; showcase the Cardiac Creek Zn-PB-Ag deposit and recent exploration results. The PDAC 2016 will also allow us to engage with new potential investors and companies active in the base metal space. The Company has been invited by PDAC to give a Corporate Presentation and exhibit at the Core Shack.

2. How would you describe your company’s opportunity to investors?

CZX is a well-managed junior explorer with a proven track record in successful mineral exploration; a significant $7 million treasury and four large mining companies as shareholders. The Company has drilled a significant, high-grade NI 43-101 compliant Zn-Pb-Ag resource in northeastern British Columbia with over 100 diamond drill hole intersections. The Cardiac Creek deposit, one of the largest undeveloped Zn-Pb-Ag deposits in the world, is located at the southern end of the Company’s large tenure block which covers nearly 800 sq. km and traverses over 140 kilometres of the highly prospective Kechika trough, the southernmost portion of the world class Selwyn Basin.

3. Did you raise money in 2015? If so, how much? And are you planning a raise in 2016?

CZX did not raise any money in 2015 and there are no plans at this time to raise money in 2016. At current share prices, raising equity financing is too dilutive. In 2014, the Company successfully raised just over $3.0 million thru various private placements.

4. Are you expecting 2016 to be a break-out year for your company? If so, why? If not “break-out”, how would you describe your expectations for 2016?

CZX is anticipating 2016 will be another extremely volatile market for the junior resource sector and that financing for exploration will remain difficult. Companies like CZX with significant tangible assets and marketable results through aggressive exploration will stand out from the crowd and continue to attract attention.

5. What is the most common misapprehension investors have about your company?

The common misapprehension is that CZX is an early stage junior explorer involved in the metals sector and therefore is too speculative for investment. In fact, the Company has already delineated a large, high grade Zn-Pb-Ag deposit with almost $5 billion of in-situ metal in the ground.

6. 2015 has obviously been a tough year for much of the resource sector. Would you say it was tougher than 2014 for your company, about the same, or easier?

2015 was a very challenging environment for the junior resource sector with even more negative sentiment than was evident in 2014. The TSX Venture exchange reached new record lows and investors avoided the venture capital markets to a point that there is now a very real crisis in Canada as companies scramble to find alternative sources of funding to continue the important work of discovery and development to drive the next phase of mine building in Canada.

7. What could governments and regulators do to clear barriers to success for public company miners/explorers going forward?

The junior explorers need access to vital investment capital and the junior funding model is largely not working any longer in this current environment. Governments and regulators need to recognise the significant economic contribution of the junior exploration sector and develop a new governance structure that eliminates red tape, reduces the regulatory burden cost and develops new funding mechanisms.

8. What is your company doing to find new investors?

CZX is in discussions with several base metal miners and other institutional investors that can see the quality of the Company’s advanced stage Zn-Pb-Ag Cardiac Creek deposit and the upside of the Company’s expansive exploration potential.

9. What is the most common mistake public resource company execs make, in your experience?

Reckless spending on poor quality assets.

10. Is the slump in oil and gas making life harder for the resources sector too?

The negative investment sentiment towards the oil and gas sector, and in the overall market place, is making lifer harder for the resource sector too. The lower price of fuel and other fuel-related products actually helps the active junior explorer in Canada but the overriding volatility in the price of crude also works to frustrate the capital markets as a spill-over effect.

11. What will it take to make mining cool again?

Increases in consumption, tightening supplies and increases in commodity prices will bring much needed investment to the mining space; but the sector has to develop other investment models and learn how to appeal to a younger, mobile generation reluctant to invest in the mining sector.

12. In your opinion, what will be the next commodity to surge when resources make their comeback, and why?

CZX believes that infrastructure metals like zinc and copper will recover more quickly than other commodities as global economies adopt deficit spending on large infrastructure projects as a means to cope with unemployment and stagnant GDP growth. Zinc prices in particular are anticipated to climb to lucrative heights as supplies tighten with a number of major zinc mine closures, few quality zinc projects in the development pipeline and little incentive to develop new zinc projects in the current climate.

--Chris Parry
https://www.twitter.com/chrisparry