Zazu Metals Corporation

Zazu Metals Corporation

March 01, 2010 08:01 ET

Positive Scoping Study Results for Zazu's Lik Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 1, 2010) - Zazu Metals Corporation (TSX:ZAZ) ("Zazu") is pleased to announce that Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA") has completed a Preliminary Assessment (Scoping) Study on an initial open pit mine on Zazu's Lik Deposit. Based on these results Zazu plans to move the project forward to the pre-feasibility stage. The Lik Deposit is 22km from Teck's Red Dog Mine in North West Alaska.

The study considered both Indicated and Inferred Mineral Resources in the Lik Deposit amenable to open pit mining. The life of mine open pit plan includes the production of 16 million tonnes grading 8.08% zinc, 2.57% lead and 47.9 g/t silver. Scott Wilson RPA estimated the pre-production capital cost as US$352 million including a 22% contingency for a 5,500 tonne per day mine and mill with an 8 year mine life. Scott Wilson RPA estimated life of mine operating costs of US$75 per tonne. Their base case assumes metal prices of US$1.00 per pound for zinc, US$0.80 per pound for lead and US$16 per ounce for silver. This demonstrated a pre-tax Internal Rate of Return ("IRR") of 9%.

The deposit is highly levered to the zinc price. Using US$1.10 and US$1.20 per pound of zinc in the same model yields pre-tax IRR's of 17% and 23% respectively. The spot zinc price reached US$1.15 in January this year.

Zazu management expects the project economics to improve when the additional Inferred Resources and potential additions from drilling at depth are included in future mine plans. Gil Atzmon, Chairman and CEO stated: "Zazu management anticipates a strong long term zinc price as global zinc demand increases and supply decreases due to upcoming mine closures".

The Preliminary Assessment is an initial investigation of a development scenario for the deposit which contains a number of economic and technical assumptions. It includes Inferred Resources which are considered too geologically speculative to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the reserves development, production, and economic forecasts will be realized.

Scott Wilson RPA led the preliminary assessment study with specialist research and opinion provided by other entities. Scott Wilson RPA completed the required pit design, planning, building and operational estimates.

In May of 2009, Zazu moved the Lik Deposit into early development stage with the updated Mineral Resource estimate completed by Scott Wilson RPA. Their estimate of Lik South is an Indicated Mineral Resource of 18.74 million tonnes grading 8.08% zinc, 2.62% lead and 52.8 g/t silver; plus an Inferred Mineral Resource of 1.23 million tonnes grading 6.80% zinc, 2.12% lead and 35 g/t silver, at a 5% cut off grade. Lik North is an additional 5.18 million tonnes grading 9.65% zinc, 3.25% lead and 51 g/t silver of Inferred Resource at a 7% cut off grade. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Zazu is in the enviable position of having a limited number of shares outstanding, no debt, and a strong treasury. Teck is a 50% joint venture partner in the Lik Deposit, however, Zazu has the exclusive right to obtain 80% of the property by meeting certain spending commitments by 2018.

The Preliminary Assessment was completed by Kevin C. Scott, P.Eng., Principal Metallurgist with Scott Wilson RPA, and R. Dennis Bergen, P.Eng., Associate Principal Mining Engineer with Scott Wilson RPA, both of whom are qualified persons as defined by National Instrument 43-101. The part of this news release pertaining to the Preliminary Assessment Study was reviewed by them. The part of this news release pertaining to the Mineral Resource estimate was reviewed by Dr. William E. Roscoe, P.Eng., Principal Consulting Geologist with Scott Wilson RPA, and Neil N. Gow, P.Geo., Associate Consulting Geologist with Scott Wilson RPA, both of whom are qualified persons as defined by National Instrument 43-101.

About Zazu Metals Corporation

Zazu is a Canadian-based exploration company focused on acquiring and developing base metal properties in North America. Zazu's principal asset is its 50% joint venture interest with Teck in the Lik zinc – lead - silver deposit in northwestern Alaska. Additional information about Zazu is available on its website at

Additional information about the property is also available on the Teck website ( Zazu is not responsible for the content, accuracy or timeliness of material contained on the Teck website.


Gil Atzmon, Chairman and CEO

This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as "forward-looking statements"). Specifically, this press release contains forward-looking statements regarding the completion of a preliminary assessment (scoping) study. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Zazu's ability to predict or control and may cause Zazu's actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, metal price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, general economic conditions and other risks involved in the gold exploration and development industry, as well as those risk factors discussed in the section entitled "Risk Factors" in Zazu's 2008 annual information form. Such forward-looking statements are also based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the following: the availability of financing for exploration and development activities; the estimated timeline for the development of the Lik Deposit; the supply and demand for, and the level and volatility of the price of, zinc and base metals; the accuracy of mineral reserve and resource estimates and the assumptions on which the mineral reserve and resource estimates are based; market competition; ongoing relations with employees and local communities; and general business and economic conditions. Accordingly, readers should not place undue reliance on forward-looking statements. Zazu undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law.

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