Canada Zinc Metals

Pedal to the metals Canada Zinc Metals has a very desirable piece of property thatÔÇöwith access to road, rail, shipping and power all in the general areaÔÇöit hopes to develop into a productive and profitable zinc-lead mine, David Hendricks discovers. Vancouver-based Canada Zinc Metals is a tier one mineral resource exploration company listed on the TSX Venture Exchange (TSX.V: CZX). Its primary asset is a district scale land package in northeastern British Columbia that extends about 140 kilometers in length within the southernmost part (Kechika Trough) of the regionally extensive Paleozoic Selwyn Basin, one of the most prolific sedimentary basins in the world for the occurrence of SEDEX zinc-lead-silver and stratiform barite deposits. The heart of the claim package is the 100-percent-owned flagship Akie property, for which, based on the drilling completed to date, in mid-April 2008 the company announced an initial 43-101 compliant inferred resource estimated to be approximately 24 million metric tons (tonnes) grading 7.6 percent zinc, 1.5 percent lead and 13.0 g/t silver (using a 5 percent zinc cutoff) ÔÇöwhich equates to 3.95 billion pounds of zinc, 780 million pounds of lead and 8.95 million ounces of silver. Zinc is the fourth most common metal in use today, behind only iron, aluminum and copper. It is mostly used as an anti-corrosive agent in the process of galvanization, which is the coating of iron or steel used to protect those metals. Galvanization is used on chain-link fencing, guard rails, suspension bridges, light posts, metal roofs, heat exchangers and car bodies. Lead is used in building construction, lead-acid batteries, bullets and shot, weights, and is part of solder, pewter, fusible alloys and radiation shields. Because of its high density and resistance to corrosion, lead is used for the ballast keel of sailboats. Its high density allows it to counterbalance the heeling effect of wind on the sails while at the same time occupying a small volume and thus offering the least underwater resistance. For the same reason it is used in scuba diving weight belts. It doesnÔÇÖt have the weight-to-volume ratio of many heavy metals, but its low cost increases its use in these and other applications. CEO Peeyush Varshney says, ÔÇ£Canada Zinc Metals was a former shell company that we revived in early 2005, and the first project we took on was the Akie project. There was another junior mining company, Ecstall Mining Corporation, that had approached us, and we negotiated an option agreement to earn a 60 percent interest in its Akie property by making a certain level of expenditures. Due to a particular course of events, we ended up making a takeover bid for Ecstall, which successfully concluded in the spring of 2007, thereby giving us 100 percent ownership of the Akie property and all of EcstallÔÇÖs regional landholdings.ÔÇØ Due to the considerable size, grade and location of the mineral deposit, Canada Zinc Metals is attracting the attention of a number of large base metal mining companies, as Varshney explains. ÔÇ£At the moment we have, as strategic investors, Lundin Mining Corporation, with about 7 percent of the company, and in May 2009 we completed a private placement with Tongling Nonferrous Metals Group Holdings Company Ltd., which is a state-owned Chinese mining entity, whereby they now own 13 percent of Canada Zinc Metals. And we certainly have a number of other companies, both Asian and Western, that continue to show interest in our company and our projects.ÔÇØ As well, Canada Zinc Metals has the financial backing of Varshney Capital to support its operations. Akie happens to have what Varshney describes as ÔÇ£very advanced infrastructureÔÇØ in the general area, which has raised the interest level of the investor groups that have approached the company. There is currently gravel road access to the property, and the road extends about 260 kilometers to the town of Mackenzie, where there is an existing rail line that connects to the town of Trail, where Teck Resources has a smelter. The same rail line goes to the coastal city of Prince Rupert, which has a deep-sea port that routinely engages international shipping. The largest hydro power facility in BC is on Williston Lake, which is just south of the Akie deposit. ÔÇ£So with road, rail, shipping and power access all in the general area, it is a very attractive potential mining scenario. And weÔÇÖre in British ColumbiaÔÇöa mining-friendly jurisdiction. ÔÇ£WeÔÇÖve made a strong effort and made it a priority to establish very good, mutually beneficial working relationships with the various local communities within the region from the very beginning,ÔÇØ says Varshney. The potential investors looking at Canada Zinc Metals see it ultimately as a district scale development opportunity. So not only is the company looking at a robust zinc-lead deposit at Akie, it believes in the ÔÇ£blue-sky discoveryÔÇØ potential of the 140-kilometer stretch of land that it also owns in the region. ÔÇ£We are quite confident we will make other discoveries of zinc-lead deposits,ÔÇØ Varshney says. ÔÇ£Twenty kilometers to the northwest of Akie is the Cirque deposit, which is a 50/50 joint venture between Teck Resources and Korea Zinc. We own the Mount Alcock property, another 20 kilometers to the northwest from Cirque, which has had historical drilling done and has come up with about nine meters of more than 9 percent zinc-lead combined. There has yet to be any real follow-up exploration or drilling there, and we feel it is a high-priority target. We believe there is tremendous value that potentially exists along the extensive prospective claim package that we own.ÔÇØ The current status of the Akie property is advanced exploration, he notes. ÔÇ£WeÔÇÖre hitting the scale required to make this a potential mining situation; itÔÇÖs large and itÔÇÖs very good grade. One of the major features that sets us apart from other zinc-lead exploration companies is the existing infrastructure that we have in the area. With the significant financial and personnel resources to get a mine into production, as well as the extensive permitting requirements, itÔÇÖs hard to say with certainty when a mine could be up and running, but the company intends to fast-track its plans and continue to aggressively advance the Akie deposit toward that ultimate objective.ÔÇØ