Nevada Zinc

Nevada Zinc Announces Positive Preliminary Economic Assessment Results for the Lone Mountain Zinc Project Including 40% Pre-Tax IRR – 35% After Tax IRR

Toronto, Ontario June 27, 2019 – Nevada Zinc Corporation (“Nevada Zinc” or the “Company”) (TSX-V: NZN) is pleased to announce the favourable results of an independent Preliminary Economic Assessment (“PEA”) of the viability of potentially mining the zinc mineralization at the Company’s 100% owned Lone Mountain Project (“Project”) in centToronto, Ontario June 27, 2019 – Nevada Zinc Corporation (“Nevada Zinc” or the “Company”) (TSX-V: NZN) is pleased to announce the favourable results of an independent Preliminary Economic Assessment (“PEA”) of the viability of potentially mining the zinc mineralization at the Company’s 100% owned Lone Mountain Project (“Project”) in central Nevada. The PEA highlights strong potential economics for a low cost, relatively simple, open pit zinc mine and floatation plant operating, producing, and selling zinc concentrate for 12 years based on the current Mineral Resources. The operating rate of the mine is planned to be a nominal 800 tonnes per day (“tpd”). Using a long term average zinc price of US $1.13 per pound and an 8% discount rate the Project generates a pre-tax Net Present Value (“NPV”) of US $56.4 M ($75.2 M CDN) and a pre-tax 40% Internal Rate of Return (“IRR”). The after tax NPV (8%) is $43.2 M ($57.6 M CDN) and the after tax IRR is 35%. All currency is stated in USD unless indicated otherwise.

Table 1 - PEA Summary

Parameters

USD

CAD

Pre-Tax IRR

40%

Pre-Tax NPV 8%

$56.4 M

$75.2

After Tax IRR

35%

After Tax NPV 8%

$43.2 M

$57.6 M

Payback Period (After Tax), (years)

2.7

Average Annual Zinc Production (lbs. contained)

35.2 M

Average Annual Zinc Payable (85%) (lbs. payable)

30.0 M

Pre-production Capex

$25.7 M

$34.3 M

Mine Life (years)

12

Anticipated Mill Throughput (Average tpd)

800

Operating Days per Year

347

Mineral Resource Tonnage (tonnes)

3,257,000

Mineral Resource Grade

7.57%

Anticipated Process plant Recovery

80%

Anticipated Grade of Concentrate Produced

45%

Zinc Price for PEA Study (per pound)

$1.13

Foreign Exchange Rate (CAD/USD)

0.75

PEA Cautionary Note

Readers are cautioned that the PEA is preliminary in nature and there is no certainty the results of the PEA as presented will ever be realized. Mineral Resources are not mineral reserves and do not have demonstrated economic viability. Additional work is required to upgrade the inferred mineral resources to mineral reserves.

Bruce Durham, President and CEO of Nevada Zinc commented on the announcement today: “The results in today’s PEA confirm the Company is making good progress toward eventually turning this “grass roots discovery prospect”, into a viable zinc producer. The PEA was envisioned as a low CAPEX project that could withstand cyclical commodity prices and that could be completed in the context of the current capital markets where access to large amounts of capital is simply not available to small companies. The scope of the PEA included new equipment and contract mining. While we know there is potential for the Lone Mountain zinc mineralization to be a quality feedstock for making value added zinc sulphate for the US fertilizer industry and we know our mineralization could potentially be leached using the Metsol non-acid leach technique to produce a value added zinc oxide product, we stopped short of inputting either of these value added scenarios into the PEA. We kept it simple. The assumptions in the PEA are that the mineralization would be mined in a single pit using a contract miner and that the mineralization would be concentrated using standard floatation techniques to make zinc concentrate that would be transported to a smelter for payment. As we progress beyond today’s PEA we will be looking to better quantify the potential to garner more value from the rather unique zinc mineralization at Lone Mountain. The Project is located in a great jurisdiction close to a very supportive mining based community and based on the results to-date, Lone Mountain has the potential to create significant value for our shareholders.” Mr. Durham further added: “There is also a lot of prospectivty at the Project. We have only drill tested a short portion of the 4 kilometre long structure and we have still not drilled deep enough to evaluate the potential for the Project to host significant zinc sulphide mineralization at depth.”

Table 2 – Overview of the PEA Results

Base Case (USD)

Base Case (CAD)

Commodity Assumption

Zinc Price $/lb

$ 1.13

$/tonne

$2,500

Economics Pre-Tax

Net Cash Flow

$106.7 M

$142.2 M

NPV @ 8%

$ 56.4 M

$ 75.2 M

IRR

40%

Economics After Tax

Net Cash Flow

$ 83.8 M

$111.7 M

NPV @ 8%

$ 43.2 M

$ 57.6 M

IRR

35%

Payback Period

2.7 years

Capital and Operating Cost Estimates

Table 3 – Initial and Sustaining Capital Costs (CAPEX)

Area

Start-up Capital ($ M)

Sustaining Capital ($ M)

Total ($ M)

Mining (Contractor – mobilization)

2.0

2.0

Site Development/Infrastructure

2.0

2.0

Mineral Processing

14.0

14.0

Tailings Management Facility

1.0

1.0

Closure

0.5

0.5

Salvage Value

(0.5)

(0.5)

Contingencies (30%)

5.7

5.7

Owners’ Costs

1.0

1.0

Sustaining Capital

2.2

2.2

Total

25.7

2.2

27.9

Table 4 - Operating Costs (OPEX)

Area

Cost per tonne of Mineralized Material ($)

Cost per unit

Unit

Open Pit Mining

19.50

$3.50/t Ore - $2.00/t Waste

per tonne mined

Crushing

3.00

per tonne processed

Processing

22.20

per tonne processed

G&A

2.00

per tonne processed

All Included OPEX

47.70

per tonne processed

Note: PEA assumed that start-up working capital would be provided by concentrate purchaser on credit revolver basis.

The PEA was undertaken at the request of Bruce Durham, P.Geo., President and CEO of the Company and was prepared by Peimeng Ling and Associates Limited (“PL&A”) in accordance with the requirements of NI-43-101 Standards of Disclosure for Mineral Projects (“NI-43-101”). Peimeng Ling, P.Eng. (MSc. Chemical Engineering), the principal author of the Technical Report, is an independant Qualified Person (as that term is defined by Canadian regulatory guidelines) in respect of the preparation of the PEA Technical Report discussed in this press release. Her experience includes over 35 years experience in the chemical and metallurgical processing field including project evaluation and project management.

Table 5 - Mineral Resource Estimate

Cut-Off Zn %

Tonnage (000’s)

Pb%

Zn%

Zn M lb

5%

1,989

0.8

10.05

440

4%

2,473

0.7

8.97

489

3%

2,931

0.7

8.12

525

2%

3,257

0.7

7.57

543

1%

3,534

0.7

7.09

552

Notes: Numbers in Table 5 are from P&E Mining Consultants Inc. report dated July 22, 2018 “Initial Mineral Resource Estimate and Technical Report on the Lone Mountain Property Eureka Nevada USA”. A 2% NSR royalty is payable to the original property vendor on the majority of the Property. All material tonnes and metal values are undiluted. Mineral Resources are calculated assuming a 2% zinc cut-off. Mineral Resources which are not mineral reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing or other relevant issues. Details of the Mineral Resource Estimate can be found in the technical report filed on SEDAR under the Companys’ profile and dated September 7, 2018.

Mining

The mineralization on the Project extends to surface and is amenable to conventional open pit mining methods utilizing front end loaders and trucks. An optimized pit shell was constructed using indicative costs for the area, including $2.50/t mining costs for waste, $3.50/t mining costs for mineralized material, a zinc price of $1.25 per pound, process recovery of 85%, smelter payout of 85%, and smelter charges and freight of $200/t, in addition to processing costs of $20/t and G&A of $3.00/t. (P&E Mining Consultants Inc. 2018 see note above). Slight modifications were made to some of the parameters in light of additional investigations and results from additional metallurgical test work. The PEA established mining costs to be $2.00/t for waste and $3.50/t for mineralization. Process recovery was set at 80%, smelter payout was set as 85% and the achievable concentrate grade was determined to be 45% for the study while G&A was set at $2.00/t. No optimization of the planned mining of the deposit was carried out in the preparation of the PEA.

Table 6 - Processing Plant Feed Schedule

Year

Total Process Plant Feed

(tonnes 000’s) Undiluted

Zinc Grade

(Mineral Resource Grade)

Pounds of Zn Contained in Concentrate (M)

Total Material Mined

(tonnes 000’s)

1

264

7.57%

35.2

2,373

2

264

7.57%

35.2

2,373

3

264

7.57%

35.2

2,373

4

264

7.57%

35.2

2,373

5

264

7.57%

35.2

2,373

6

264

7.57%

35.2

2,373

7

264

7.57%

35.2

2,373

8

264

7.57%

35.2

2,373

9

264

7.57%

35.2

2,373

10

264

7.57%

35.2

2,373

11

264

7.57%

35.2

2,373

12

264

7.57%

35.2

2,373

13

89

7.57%

11.9

837

Total

3,257

7.57%

434.3

29,313

Note: Total material mined values include all production from open pit mining (mineralization plus waste).

Processing

The Company and its consultants have been carrying out mineralogical and metallurgical investigations on the Project’s non-sulphide mineralization since October 2015. Since that time the Company has completed thin section investigations, polished thin section work, Heavy Liquid Separation studies, whole rock dissolution using sulphuric acid, Tescan Integrated Mineral analyser tests, concentrate production tests using floatation techniques to concentrate the mineralization, as well as acid dissolution teswork on floatation concentrate and have also completed initial dissolution test work using the METSOL proprietary process on mineralized rock samples. The dissolution testwork on floatation concentrate material using sulphuric acid was designed to target the dissolution of the zinc minerals to produce a liquid comprised primarily of zinc sulphate. Zinc sulphate product was targeted as an end product that would ideally be an end product for use in the fertilizer or animal food businesses. The dissolution test work completed using the METSOL process was aimed at determining the viability of leaching zinc bearing rock without dissolving the associated calcite and dolomite to produce chemical grade zinc oxide.

The recoverable, and potentially payable mineralization on the Project is comprised of zinc oxide and carbonate and minerals, specifically smithsonite, hemimorphite and willemite with some overlap in the identification of the willemite and hemimorphite minerals. The main gangue minerals associated with the zinc mineralization have been identified as calcite, dolomite and minor quartz. Through the various investigations the smithsonite and hemimorphite/willemite were found to be moderately liberated at a grind size P80 of 600 microns, 57% and 72% respectively. Additional grinding was found to liberate more of the zinc mineralization.

Heavy Liquid Separation tests were completed by Met-Solve Laboratories of Vancouver and also more recently by SGS, Lakefield Ontario. Testing was completed on a variety of fraction sizes and at variable specific gravities (SG). The tests generated grade recovery curves showing good separation of the heavier zinc bearing mineralization.

Floatation test work was carried out at SGS, Lakefield Ontario. Initial test work showed 96% recoveries and produced concentrate with approximately 30% zinc content. Other tests that were completed as follow-up which produced zinc recoveries over 80% recovery and grading more than 40% zinc. Because the tests were preliminary and single batch tests only, it is reasonable to assume that a higher grade of concentrate, up to 45% could be produced with recovery of approximately 80% in more advanced testwork. Another bulk floatation test produced a 46% zinc concentrate with a 67.4% recovery. Again, the sample was a batch test only, so in a locked cycle environment it is considered reasonable that a 45% zinc concentrate could be produced at an 80% recovery rate.

As part of the plan by the Company to determine the best approach to maximize the value of the mineralization, the Company had SGS undertake leach test work using sulphuric acid to attempt leaching of the floatation concentrate. Test work by Outotec in 2016 showed the unconcentrated mineralization was readily leached however the high acid consumption rates would not allow the dissolution of raw mineralization to be a viable processing route. SGS completed 9 leach tests on various floatation concentrates. On the basis of the 9 tests, the conclusions were that in most of the tests, high zinc extraction was achieved. The method of acid addition seemed to have an effect on extraction of silicon. When acid was added slowly only limited silicon was dissolved (~5%).

A report by Metsol in March 2017 describing work completed by them reported the results of leaching of mineralized samples from the Project using the Metsol process, a non-acid leach technique. That work showed the mineralization had characteristics well suited for the leaching of mineralization to produce a zinc oxide product. Leach extraction was shown to be in the range of 80% to over 90% in the 6 samples processed. Post leaching roasting of the material produced a purity of 99.3%.

Table 7 – Sensitivity analysis NPV 8% Pre-Tax Base Case

NPV

NPV

NPV

IRR

Item

Variances

Value

0%

5%

10%

%

Initial Capital Cost ($M)

+15%

Base Case

-15%

22

19

16

104

107

110

68

71

75

45

48

52

35

40

47

Total OPEX

($M)

+15%

Base Case

-15%

15

13

11

83

107

131

53

71

89

35

48

62

32

40

48

Zinc metal price

$/t Zn Metal

+15%

Base Case

-15%

2,875

2,500

2,125

168

107

45

116

71

26

83

48

14

60

40

19

Zinc Grade

+15%

Base Case

-15%

8.7%

7.57%

6.4%

151

107

62

104

71

39

73

48

24

54

40

26

Infrastructure

The Project is ideally located in east central Nevada, approximately 28 kilometres to the northwest of Eureka Nevada, a mining focused area that continues to be supportive of mining development. Highway 50 which provides the main access between Reno Nevada and Eureka passes along the southern boundary of the Project and a year round county maintained road provides access to the eastern part of the Project. Existing unmaintained roads provide access to the planned area of operations.

Two mining operations have recently been permitted in the area. Since being permitted in 2018, McEwen Mining Inc. has constructed and recently declared commercial production at its’ Gold Bar Project approximately 25 km to the northwest of the Project and General Moly, Inc. has completed permitting of its Mount Hope Molybdenum Project located 25 kilometre to the north of the Project.

High voltage power transmission lines are located just to the south of the Project near Highway 50. The PEA contemplates generating power using diesel power. The determination was made that a single 1.5 MW diesel generator is sufficient to provide the power needed for the operation as planned in the PEA. A back-up generator is also included in the plan. Further planned power supply studies include the possibility of using LNG as a fuel for generated power. Primary power generation will be located in proximity to the grinding facilty in order to minimize power line requirements.

Water required for operations and general site purposes would be be supplied by local well sites located as close as possible to the plant location. No plan has been developed on the location of available wells or water rights. The Company has engaged in initial reviews of the possibilities for water rights and will continue the investigation of available water near the project site.

Permits

The Project is located on public BLM lands and patent land. To-date the Company has disturbed less than 5 acres and in order to increase the footprint of disturbance the Company will require a Exploration Plan of Operations (PoO). Mining and exploration activities included in the PoO will require items such as a description of surface disturbance activities, preliminary design reports and a description of waste rock, ore, spent heap and ground water characterization. A Reclamation Plan describing the construction and closure of each facility with the associated bond cost estimate as applicable is also required. Future activities creating more than five acres of disturbance will also require that the BLM perform an appropriate National Environmental Policy Act analysis (NEPA), likely an Environmental Assessment. The NEPA analysis assesses the potential for impacts to all resources from the proposed project. No survey work has been initiated at this time although plans are being made to undertake the work.

Additional information about the Company is available on the Company’s website: www.nevadazinc.com

Bruce Durham P.Geo, President and CEO of Nevada Zinc, is a Qualified Person, as that term is defined by Canadian regulatory guidelines under National Instrument 43-101, and has read and approved the technical information contained in this press release.

The PEA Technical Report on which this press release is based will be posted on the Companys’ website and on SEDAR within 45 days of this release. Some numbers in this release are rounded and therefore some discrepancies may be present in the totals shown.

The Company announces that Allen Ezer has resigned as a director of the Company to pursue other opportunities. The Company thanks Allen for his years of service and wishes him the best in his new ventures.

For further information contact:

Nevada Zinc Corporation
Suite 1660 141 Adelaide St. West
Toronto, Ontario M5H 3L5
Tel: 416-504-8821

Bruce Durham, President and CEO
bdurham@nevadazinc.com

www.nevadazinc.com

Caution Regarding Forward-Looking Statements

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.ral Nevada. The PEA highlights strong potential economics for a low cost, relatively simple, open pit zinc mine and floatation plant operating, producing, and selling zinc concentrate for 12 years based on the current Mineral Resources. The operating rate of the mine is planned to be a nominal 800 tonnes per day (“tpd”). Using a long term average zinc price of US $1.13 per pound and an 8% discount rate the Project generates a pre-tax Net Present Value (“NPV”) of US $56.4 M ($75.2 M CDN) and a pre-tax 40% Internal Rate of Return (“IRR”). The after tax NPV (8%) is $43.2 M ($57.6 M CDN) and the after tax IRR is 35%. All currency is stated in USD unless indicated otherwise.

 

Table 1 - PEA Summary

Parameters

USD

CAD

Pre-Tax IRR

40%

 

Pre-Tax NPV 8%

$56.4 M

$75.2

After Tax IRR

35%

 

After Tax NPV 8%

$43.2 M

$57.6 M

Payback Period (After Tax), (years)

2.7

 

Average Annual Zinc Production (lbs. contained)

35.2 M

 

Average Annual Zinc Payable (85%) (lbs. payable)

30.0 M

 

Pre-production Capex

$25.7 M

$34.3 M

Mine Life (years)

12

 

Anticipated Mill Throughput (Average tpd)

800

 

Operating Days per Year

347

 

Mineral Resource Tonnage (tonnes)

3,257,000

 

Mineral Resource Grade

7.57%

 

Anticipated Process plant Recovery

80%

 

Anticipated Grade of Concentrate Produced

45%

 

Zinc Price for PEA Study (per pound)

$1.13

 

Foreign Exchange Rate (CAD/USD)

0.75

 

 

PEA Cautionary Note

Readers are cautioned that the PEA is preliminary in nature and there is no certainty the results of the PEA as presented will ever be realized. Mineral Resources are not mineral reserves and do not have demonstrated economic viability. Additional work is required to upgrade the inferred mineral resources to mineral reserves.

 

Bruce Durham, President and CEO of Nevada Zinc commented on the announcement today: “The results in today’s PEA confirm the Company is making good progress toward eventually turning this “grass roots discovery prospect”, into a viable zinc producer. The PEA was envisioned as a low CAPEX project that could withstand cyclical commodity prices and that could be completed in the context of the current capital markets where access to large amounts of capital is simply not available to small companies. The scope of the PEA included new equipment and contract mining. While we know there is potential for the Lone Mountain zinc mineralization to be a quality feedstock for making value added zinc sulphate for the US fertilizer industry and we know our mineralization could potentially be leached using the Metsol non-acid leach technique to produce a value added zinc oxide product, we stopped short of inputting either of these value added scenarios into the PEA. We kept it simple. The assumptions in the PEA are that the mineralization would be mined in a single pit using a contract miner and that the mineralization would be concentrated using standard floatation techniques to make zinc concentrate that would be transported to a smelter for payment. As we progress beyond today’s PEA we will be looking to better quantify the potential to garner more value from the rather unique zinc mineralization at Lone Mountain. The Project is located in a great jurisdiction close to a very supportive mining based community and based on the results to-date, Lone Mountain has the potential to create significant value for our shareholders.” Mr. Durham further added: “There is also a lot of prospectivty at the Project. We have only drill tested a short portion of the 4 kilometre long structure and we have still not drilled deep enough to evaluate the potential for the Project to host significant zinc sulphide mineralization at depth.”

 

Table 2 – Overview of the PEA Results

 

 

 

Base Case (USD)

Base Case (CAD)

 

 

 

 

Commodity Assumption

Zinc Price $/lb

      $ 1.13

 

 

                $/tonne

      $2,500

 

 

 

 

 

Economics Pre-Tax

Net Cash Flow

$106.7 M

$142.2 M

 

NPV @ 8%

$  56.4 M

$  75.2 M

 

IRR

     40%

 

 

 

 

 

Economics After Tax

Net Cash Flow

$  83.8 M

$111.7 M

 

NPV @ 8%

$  43.2 M

$  57.6 M

 

IRR

     35%

 

 

Payback Period

    2.7 years

 

 

Capital and Operating Cost Estimates

 

Table 3 – Initial and Sustaining Capital Costs (CAPEX)

 

Area

Start-up Capital ($ M)

Sustaining Capital ($ M)

Total ($ M)

Mining (Contractor – mobilization)

  2.0

 

  2.0

Site Development/Infrastructure

  2.0

 

  2.0

Mineral Processing

14.0

 

14.0

Tailings Management Facility

  1.0

 

  1.0

Closure

     0.5

 

     0.5

Salvage Value

   (0.5)

 

   (0.5)

Contingencies (30%)

  5.7

 

  5.7

Owners’ Costs

  1.0

 

  1.0

Sustaining Capital

 

     2.2

  2.2

Total

  25.7

     2.2

 27.9

 

Table 4 - Operating Costs (OPEX)

 

Area

Cost per tonne of Mineralized Material ($)

Cost per unit

Unit

Open Pit Mining

19.50

$3.50/t Ore - $2.00/t Waste

per tonne mined

Crushing

  3.00

 

per tonne processed

Processing

22.20

 

per tonne processed

G&A

  2.00

 

per tonne processed

All Included OPEX

47.70

 

per tonne processed

 

Note:  PEA assumed that start-up working capital would be provided by concentrate purchaser on credit revolver basis.

           

The PEA was undertaken at the request of Bruce Durham, P.Geo., President and CEO of the Company and was prepared by Peimeng Ling and Associates Limited (“PL&A”) in accordance with the requirements of NI-43-101 Standards of Disclosure for Mineral Projects (“NI-43-101”). Peimeng Ling, P.Eng. (MSc. Chemical Engineering), the principal author of the Technical Report, is an independant Qualified Person (as that term is defined by Canadian regulatory guidelines) in respect of the preparation of the PEA Technical Report discussed in this press release. Her experience includes over 35 years experience in the chemical and metallurgical processing field including project evaluation and project management.

 

Table 5 -  Mineral Resource Estimate

 

Cut-Off Zn %

Tonnage (000’s)

Pb%

Zn%

Zn M lb

5%

1,989

0.8

10.05

440

4%

2,473

0.7

8.97

489

3%

2,931

0.7

8.12

525

2%

3,257

0.7

7.57

543

1%

3,534

0.7

7.09

552

 

Notes: Numbers in Table 5 are from P&E Mining Consultants Inc. report dated July 22, 2018 “Initial Mineral Resource Estimate and Technical Report on the Lone Mountain Property Eureka Nevada USA”. A 2% NSR royalty is payable to the original property vendor on the majority of the Property. All material tonnes and metal values are undiluted. Mineral Resources are calculated assuming a 2% zinc cut-off. Mineral Resources which are not mineral reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing or other relevant issues. Details of the Mineral Resource Estimate can be found in the technical report filed on SEDAR under the Companys’ profile and dated September 7, 2018.

 

Mining

 

The mineralization on the Project extends to surface and is amenable to conventional open pit mining methods utilizing front end loaders and trucks. An optimized pit shell was constructed using indicative costs for the area, including $2.50/t mining costs for waste, $3.50/t mining costs for mineralized material, a zinc price of $1.25 per pound, process recovery of 85%, smelter payout of 85%, and smelter charges and freight of $200/t, in addition to processing costs of $20/t and G&A of $3.00/t. (P&E Mining Consultants Inc. 2018 see note above). Slight modifications were made to some of the parameters in light of additional investigations and results from additional metallurgical test work. The PEA established mining costs to be $2.00/t for waste and $3.50/t for mineralization. Process recovery was set at 80%, smelter payout was set as 85% and the achievable concentrate grade was determined to be 45% for the study while G&A was set at $2.00/t. No optimization of the planned mining of the deposit was carried out in the preparation of the PEA.

 

Table 6 - Processing Plant Feed Schedule

 

Year

Total Process Plant Feed

(tonnes 000’s) Undiluted

Zinc Grade

(Mineral Resource Grade)

Pounds of Zn Contained in Concentrate (M)

Total Material Mined

(tonnes 000’s)

1

264

7.57%

35.2

2,373

2

264

7.57%

35.2

2,373

3

264

7.57%

35.2

2,373

4

264

7.57%

35.2

2,373

5

264

7.57%

35.2

2,373

6

264

7.57%

35.2

2,373

7

264

7.57%

35.2

2,373

8

264

7.57%

35.2

2,373

9

264

7.57%

35.2

2,373

10

264

7.57%

35.2

2,373

11

264

7.57%

35.2

2,373

12

264

7.57%

35.2

2,373

13

89

7.57%

11.9

   837

Total

3,257

7.57%

434.3

          29,313

 

Note: Total material mined values include all production from open pit mining (mineralization plus waste).

Processing

The Company and its consultants have been carrying out mineralogical and metallurgical investigations on the Project’s non-sulphide mineralization since October 2015. Since that time the Company has completed thin section investigations, polished thin section work, Heavy Liquid Separation studies, whole rock dissolution using sulphuric acid, Tescan Integrated Mineral analyser tests, concentrate production tests using floatation techniques to concentrate the mineralization, as well as acid dissolution teswork on floatation concentrate and have also completed initial dissolution test work using the METSOL proprietary process on mineralized rock samples. The dissolution testwork on floatation concentrate material using sulphuric acid was designed to target the dissolution of the zinc minerals to produce a liquid comprised primarily of zinc sulphate. Zinc sulphate product was targeted as an end product that would ideally be an end product for use in the fertilizer or animal food businesses. The dissolution test work completed using the METSOL process was aimed at determining the viability of leaching zinc bearing rock without dissolving the associated calcite and dolomite to produce chemical grade zinc oxide.

The recoverable, and potentially payable mineralization on the Project is comprised of zinc oxide and carbonate and minerals, specifically smithsonite, hemimorphite and willemite with some overlap in the identification of the willemite and hemimorphite minerals. The main gangue minerals associated with the zinc mineralization have been identified as calcite, dolomite and minor quartz. Through the various investigations the smithsonite and hemimorphite/willemite were found to be moderately liberated at a grind size P80 of 600 microns, 57% and 72% respectively. Additional grinding was found to liberate more of the zinc mineralization.

Heavy Liquid Separation tests were completed by Met-Solve Laboratories of Vancouver and also more recently by SGS, Lakefield Ontario. Testing was completed on a variety of fraction sizes and at variable specific gravities (SG).  The tests generated grade recovery curves showing good separation of the heavier zinc bearing mineralization.

Floatation test work was carried out at SGS, Lakefield Ontario. Initial test work showed 96% recoveries and produced concentrate with approximately 30% zinc content. Other tests that were completed as follow-up which produced zinc recoveries over 80% recovery and grading more than 40% zinc. Because the tests were preliminary and single batch tests only, it is reasonable to assume that a higher grade of concentrate, up to 45% could be produced with recovery of approximately 80% in more advanced testwork. Another bulk floatation test produced a 46% zinc concentrate with a 67.4% recovery. Again, the sample was a batch test only, so in a locked cycle environment it is considered reasonable that a 45% zinc concentrate could be produced at an 80% recovery rate.

As part of the plan by the Company to determine the best approach to maximize the value of the mineralization, the Company had SGS undertake leach test work using sulphuric acid to attempt leaching of the floatation concentrate. Test work by Outotec in 2016 showed the unconcentrated mineralization was readily leached however the high acid consumption rates would not allow the dissolution of raw mineralization to be a viable processing route. SGS completed 9 leach tests on various floatation concentrates. On the basis of the 9 tests, the conclusions were that in most of the tests, high zinc extraction was achieved. The method of acid addition seemed to have an effect on extraction of silicon. When acid was added slowly only limited silicon was dissolved (~5%).

A report by Metsol in March 2017 describing work completed by them reported the results of leaching of mineralized samples from the Project using the Metsol process, a non-acid leach technique. That work showed the mineralization had characteristics well suited for the leaching of mineralization to produce a zinc oxide product. Leach extraction was shown to be in the range of 80% to over 90% in the 6 samples processed. Post leaching roasting of the material produced a purity of 99.3%.

Table 7 – Sensitivity analysis NPV 8% Pre-Tax Base Case

 

 

 

NPV

 

NPV

NPV

IRR

Item

Variances

Value

0%

5%

10%

%

 

 

 

 

 

 

 

Initial Capital Cost ($M)

+15%

Base Case

-15%

22

19

16

104

107

110

68

71

75

45

48

52

35

40

47

Total OPEX

($M)

+15%

Base Case

-15%

15

13

11

83

107

131

53

71

89

35

48

62

32

40

48

Zinc metal price

$/t Zn Metal

+15%

Base Case

-15%

2,875

2,500

2,125

168

107

45

116

71

26

83

48

14

60

40

19

Zinc Grade

+15%

Base Case

-15%

8.7%

7.57%

6.4%

151

107

62

104

71

39

73

48

24

54

40

26

 

 

Infrastructure

The Project is ideally located in east central Nevada, approximately 28 kilometres to the northwest of Eureka Nevada, a mining focused area that continues to be supportive of mining development. Highway 50 which provides the main access between Reno Nevada and Eureka passes along the southern boundary of the Project and a year round county maintained road provides access to the eastern part of the Project. Existing  unmaintained roads provide access to the planned area of operations.

Two mining operations have recently been permitted in the area. Since being permitted in 2018, McEwen Mining Inc. has constructed and recently declared commercial production at its’ Gold Bar Project approximately 25 km to the northwest of the Project and General Moly, Inc. has completed permitting of its Mount Hope Molybdenum Project located 25 kilometre to the north of the Project.

High voltage power transmission lines are located just to the south of the Project near Highway 50. The PEA contemplates generating power using diesel power. The determination was made that a single 1.5 MW diesel generator is sufficient to provide the power needed for the operation as planned in the PEA. A back-up generator is also included in the plan. Further planned power supply studies include the possibility of using LNG as a fuel for generated power.  Primary power generation will be located in proximity to the grinding facilty in order to minimize power line requirements.

Water required for operations and general site purposes would be be supplied by local well sites located as close as possible to the plant location. No plan has been developed on the location of available wells or water rights. The Company has engaged in initial reviews of the possibilities for water rights and will continue the investigation of available water near the project site.

Permits

The Project is located on public BLM lands and patent land. To-date the Company has disturbed less than 5 acres and in order to increase the footprint of disturbance the Company will require a Exploration Plan of Operations (PoO). Mining and exploration activities included in the PoO will require items such as a description of surface disturbance activities, preliminary design reports and a description of waste rock, ore, spent heap and ground water characterization. A Reclamation Plan describing the construction and closure of each facility with the associated bond cost estimate as applicable is also required. Future activities creating more than five acres of disturbance will also require that the BLM perform an appropriate National Environmental Policy Act analysis (NEPA), likely an Environmental Assessment. The NEPA analysis assesses the potential for impacts to all resources from the proposed project. No survey work has been initiated at this time although plans are being made to undertake the work.

 

Additional information about the Company is available on the Company’s website: www.nevadazinc.com

Bruce Durham P.Geo, President and CEO of Nevada Zinc, is a Qualified Person, as that term is defined by Canadian regulatory guidelines under National Instrument 43-101, and has read and approved the technical information contained in this press release.

 

The PEA Technical Report on which this press release is based will be posted on  the Companys’ website and on SEDAR within 45 days of this release. Some numbers in this release are rounded and therefore some discrepancies may be present in the totals shown.

 

The Company announces that Allen Ezer has resigned as a director of the Company to pursue other opportunities. The Company thanks Allen for his years of service and wishes him the best in his new ventures.

 

For further information contact:                     

Nevada Zinc Corporation 
Suite 1660 141 Adelaide St. West
Toronto, Ontario M5H 3L5
Tel: 416-504-8821

Bruce Durham, President and CEO
bdurham@nevadazinc.com 

www.nevadazinc.com

Caution Regarding Forward-Looking Statements

 

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc.  Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties.  Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Nevada Zinc Corporation Announces Commencement of Preliminary Economic Assessment on Lone Mountain Zinc Project in Nevada, USA

TORONTO, November 26, 2018 – Nevada Zinc Corporation (the "Company" or "Nevada Zinc") (TSX Venture: “NZN”) is very pleased to announce the commencement of a Preliminary Economic Assessment ("PEA") on the Company's flagship, 100%-owned, Lone Mountain Zinc Project, located in Eureka County, Nevada, USA.

The objectives and timing of the PEA include:

  • Completion of an independent preliminary scoping-level engineering analysis of the project with the aim of producing zinc chemical compounds, which includes zinc sulphate, and zinc concentrate;

  • Providing an estimate of the potential economic value of the project;

  • Providing an estimate of the project’s capital costs, operating costs, as well as sustaining costs;

  • Providing a conceptual economic model of the project over the life-of-mine;

  • The PEA is scheduled to be completed and filed in the first quarter of 2019.

Bruce Durham, President and CEO, commented "The commencement of the Lone Mountain PEA marks another major step forward for the Company following completion and filing of the Inferred Mineral Resource Estimate in September of this year. This will be a pivotal phase for Nevada Zinc as we fast-track the development of the Lone Mountain Project as a zinc chemical compounds and oxide concentrate project. Our shareholders are uniquely positioned to benefit from the potential  increase in zinc chemical compounds demand throughout North American markets.”

Don Christie, CFO and Director, stated "The PEA will provide us with a solid base from which we will be able to communicate the economic characteristics of the Lone Mountain Project and we expect this to be a very exciting and rewarding time for Nevada Zinc.”

About Nevada Zinc

Nevada Zinc is a discovery driven mineral exploration company with a proven management team focused on identifying unique mineral exploration opportunities that have the potential to provide significant economic value to its shareholders.

The current focus of the Company is the development of the Lone Mountain Zinc Project comprised of 231 claims covering over 1,619 hectares (4,000 acres) near Eureka, Nevada.

The Lone Mountain Project is located in east-central Nevada and is easily accessible via paved and gravel roads northwesterly from Eureka where all essential services are available. The Project includes options, leases or purchase agreements to acquire 100% interests in all properties along the entire key structural trend which extends for more than four kilometres.

Bruce Durham P.Geo, President and CEO of Nevada Zinc is a Qualified Person, as that term is defined by Canadian regulatory guidelines under National Instrument 43-101, and has read and approved the technical information contained in this press release.

The Company has completed 85 reverse circulation drill holes and 13 core drill holes . Results from the drill programs have shown numerous broad intersections of medium to high grade, non-sulphide, zinc mineralization in two locations both of which are located between surface and a depth of approximately 250 metres, most of which may potentially be mined using open pit methods.

Additional information about the Company is available on the Company’s website: www.nevadazinc.com


For further information contact:
Nevada Zinc Corporation
Suite 1660, 141 Adelaide St. West
Toronto, Ontario M5H 3L5
Tel: 416-504-8821
Bruce Durham, President and CEO
bdurham@nevadazinc.com


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX enture Exchange) accepts responsibility for the adequacy or accuracy of this release.


This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc.  Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.



Nevada Zinc Reports Initial Mineral Resource Estimate for the Lone Mountain Zinc Project, Nevada

Toronto, Canada July 25, 2018- Nevada Zinc Corporation (“Nevada Zinc” or the “Company”) (TSX-V: NZN) is pleased to announce the receipt of an initial Mineral Resource Estimate of the mineralization outlined to-date at the Company’s Lone Mountain Project, Nevada (the “Project”). The Mineral Resource Estimate, completed by independent firm P&E Mining Consultants Inc., is based upon the results from 85 reverse circulation drillholes and 13 core drillholes completed to-date on the Project. The most recent program of core drillholes was designed to corroborate assay grades from the reverse circulation drilling as well as to provide further geological information and to expand the footprint of the mineralization. At a cut-off grade of 2% zinc, the pit constrained Inferred Mineral Resource Estimate was determined to be 3,257,000 tonnes grading 7.57% zinc and 0.70% lead.

The mineralization is virtually sulphide free, has a low iron content and has been shown to be comprised of primarily zinc oxide and zinc carbonate minerals (hemimorphite and smithsonite). The physical and chemical characteristics of the zinc mineralization outlined at Lone Mountain make it  potentially suitable for the production of zinc sulphate. Metallurgical test work currently underway (in addition to work previously reported by the Company) shows the mineralization can be leached under atmospheric conditions using sulphuric acid. The targeted end product after leaching would be zinc sulphate and oxide compounds. Zinc sulphate is used on its own or in combination with other inputs to produce crop fertilizer. Currently, zinc deficiency is the most common micronutrient deficiency in crops globally. Crop yields have been proven to increase significantly through the application of zinc sulphate.

Approximately 8% of world zinc production is consumed as zinc sulphate and oxide compounds. Production of zinc chemical compounds could present an attractive opportunity for the Company.

The Company is continuing to evaluate the possibility of producing various zinc  chemical compounds as a potentially low capital cost high margin alternative to selling a zinc concentrate product to a smelting facility. Metallurgical test work is continuing at SGS Canada Inc. near Lakefield, Ontario.

President and CEO of Nevada Zinc, Bruce Durham commented: “This initial Mineral Resource Estimate of the tonnage and grade of mineralization outlined to-date is another important step forward for Nevada Zinc. We have only tested about 20% of the strike length of the main controlling structure on the Project and still have additional surface exploration to complete over much of the eastern part of the Project.  With consensus forecasts for sustained reasonably strong zinc prices, Nevada Zinc is well positioned to take advantage of the fundamentally strong zinc market. The Project is particularly well located in the strong mining jurisdiction of eastern Nevada, an advantage we intend to exploit as we move the Project forward. The physical and chemical characteristics of our mineralization could make it an ideal feedstock for the production of zinc sulphate, oxide and other chemical compounds.  

Highlights - Mineral Resource Estimate

  • The pit constrained Inferred Mineral Resource Estimate was calculated at a 2% zinc cut-off.

  • Using the 2% zinc cut-off, the Inferred Mineral Resource Estimate is 3,257,000 tonnes at a grade of 7.57% zinc and 0.70% lead.

  • There remains significant potential to expand the limits of the mineralization discovered to-date and also discover other areas of mineralization on the Project.

  • Metallurigical investigations including leach testing are continuing.  

  • Good progress has been made with respect to the concept to concentrate zinc mineralization at site and ship the concentrate to a smelter facility or alternatively to concentrate mineralization at site and subsequently leach the zinc carbonate and oxide mineralization to make zinc sulphate products on site or elsewhere locally.

  • There remains significant potential for the Company to find zinc lead sulphide mineralization at depth as was the case with Arizona Mining discovering the Taylor sulphide deposit below near surface oxide mineralization.

  • No significant drilling has been completed elsewhere on the Project.

Notes on the Mineral Resource Estimate from P&E Mining Consultants Inc. Include:

The drillhole database contains 85 reverse circulation drillholes and 13 diamond drillholes.

A topgraphic surface was constructed using 6m (20 ft) contours supplied by Nevada Zinc combined with the 74 surveyed drillhole collars.  The elevations of the remaining hand held GPS surveyed drillhole collars were adjusted to the resulting topographic surface.

Mineralization domains (wireframes) were constructed from connected cross-sectional polylines using a 2% Zn cut-off. The mineralization is confined to the Devil’s Gate limestone which resulted in two discrete northern mineralized domains and four discrete southern mineralized domains.

The assay information from all of the drilling by the Company completed since 2014 was utilized as the database in this initial NI 43-101 Mineral Resource Estimate.

A total of 1,049 assays were available for grade estimation.

The  drillhole database contains 87 density measurements taken by pycnometer with values ranging from 2.55 to 4.07 tonnes per cubic meter. The average density within the defined mineralized domains is 2.98 tonnes per cubic meter and the average density of the surrounding country rock is 2.79 tonnes per cubic meter. A thin alluvium layer is present.

Since the mineralized domains are contained within the Devil’s Gate limestone, a 10% void discount factor was applied.

Only a few assay intervals for zinc, lead, arsenic and sulphur were capped.

Grade estimation was carried out using Inverse Distance Squared anisotropic linear weighting of between three and fifteen capped assay intervals selected within a search envelope oriented parallel to the defined structures. P&E Mining Consultants Inc. considers that the information available for the Nevada Zinc Corporation Lone Mountain Deposit demonstrates reasonable geological and grade continuity and satisfies the requirements for an NI 43-101 Inferred Mineral Resource Estimate.

For reporting purposes, an optimized pit shell was constructed to constrain the modelled mineralization using the following economic parameters (US$):


Screen Shot 2018-12-11 at 9.27.45 PM.png





The pit constrained Inferred Mineral Resource Estimate at a 2% Zinc cut-off is as follows:




The sensitivity of the Mineral Resource Estimate(1-4) to Zn cut-off grade is as follows:

Screen Shot 2018-12-11 at 9.27.53 PM.png
Screen Shot 2018-12-11 at 9.28.07 PM.png

(1) Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.  

(2) The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

(3) The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.

(4) The Mineral Resources in this report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.

  

The Inferred Mineral Resouce Estimate for the Project disclosed in this press release was prepared by Fred Brown, P.Geo. and Egene Puritch, P.Eng, FEC, CET of P&E Mining Consultants Inc. By virtue of their education and experience Mr. Brown and Mr. Puritch are Qualified Persons under National Instrument 43-101. Each of them has read and approved the technical contents of this press release as to the accuracy of the statements relating to the Lone Mountain Mineral Resource Estimate.

Bruce Durham P.Geo, President and CEO of Nevada Zinc, is a Qualified Person, as that term is defined by Canadian regulatory guidelines under National Instrument 43-101, and has read and approved the scientific and technical information contained in this press release.

Assay Techniques




Preparation of the samples was done at the ALS Chemex Elko, NV facility.  A 250 gram master pulp was taken then splits were sent to ALS’s North Vancouver, BC facility.  A 48 element package using a 4 acid digestion with ICP-AES and ICP-MS was completed on all samples. For lead and zinc values exceeding the limits of the 48 element package (1% zinc or lead), the procedure was to use a 4 acid digestion with ICP-AES or AAS finish (ore grade analysis).  In the case of values exceeding the limits of the ore grade analysis (30% zinc, 20% lead), the procedure was to use specialized titration methods.




Laboratory QA/QC

Quality control samples from the lab include numerous control blanks, duplicates and recognized standards. Reference standards used include OREAS-131b, OREAS-133b, OREAS-134b, OGGeo08, and CZN-4.  No significant issues were noted with analytical accuracy or precision.

ALS Chemex’s Elko, Reno and North Vancouver location has ISO/IEC 17025:2005 accreditation.

 





About Nevada Zinc

Nevada Zinc is a discovery driven mineral exploration company with a proven management team focused on identifying unique mineral exploration opportunities that have the potential to provide significant value to its shareholders.

While the Company continues to maintain a significant equity interest in the highly prospective Yukon gold properties through its majority ownership position in Generic Gold Corp. (“Generic Gold”), the current focus of the Company is the exploration and advancement of the Project comprised of 231 claims covering over 1,619 hectares (4,000 acres) near Eureka, Nevada and the exploration of the MacBride zinc-copper project in northern Manitoba.

The Project is located in east-central Nevada and is easily accessible via paved and gravel roads northwesterly from Eureka where all essential services are available. The Project includes options, leases or purchase agreements to acquire 100% interests in all properties along the entire key structural trend for more than four kilometres.

The Company has completed 85 reverse circulation drill holes on the Property and  recently completed a 13 hole core drilling program on the Property. Results from the drilling programs have shown numerous broad intersections of medium to high grade non-sulphide zinc mineralization in two locations both of which are located between surface and a depth of approximately 250 metres.

The Company also has the right under an option agreement to earn up to an 80% interest in the MacBride Zinc Project in northern Manitoba (see the Company’s press release dated October 23, 2017).

Additional information about the Company is available on the Company’s website: www.nevadazinc.com

About Majority Owned Generic Gold

Generic Gold Coproration (“Generic Gold”) is a Toronto based mining company exploring precious metal targets in the Tintina Gold Belt in the Yukon Territory of Canada. Since incorporation, Generic Gold completed a significant 2017 exploration program that included diamond drilling on the Livingstone project and trenching on the VIP project, as well as reverse circulation drilling on its Goodman project. Genric Gold is listed on the CSE, (symbol GGC). Information on Generic Gold’s property portfolio and exploration activities are available on the company’s website at www.genericgold.ca. The Company owns 25 million common shares of Generic Gold which has 36.75 million shares outstanding.

For further information contact:

Nevada Zinc Corporation

Suite 1660 141 Adelaide St. West

Toronto, Ontario M5H 3L5

Tel: 416-504-8821

Bruce Durham, President and CEO

bdurham@nevadazinc.com





Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the

TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc.  Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.