Zazu Metals Corporation
TSX : ZAZ

Zazu Metals Corporation

April 15, 2010 08:00 ET

Zazu's Positive Scoping Study for Lik Property Released

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 15, 2010) - Zazu Metals Corporation (TSX:ZAZ) ("Zazu") is pleased to announce that the Preliminary Assessment (Scoping) Study by Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA") on an initial open pit mine on Zazu's Lik South Deposit has been filed on SEDAR and is also available on the Company's website. 

Results from the study were first announced by the Company in its March 1, 2010 news release.

Based on the study results Zazu plans to move the project forward to the pre-feasibility stage. The Lik Deposit is 22km from Teck Resources Limited's Red Dog Mine in North West Alaska. 

The study considered both Indicated and Inferred Mineral Resources in Lik South Deposit amenable to open pit mining. The life of mine open pit production 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 of US$352 million including 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 resources are included in future mine plans. Currently excluded from the economic analysis are resources that may have to be mined via underground methods. These resources include approximately 3 million tonnes of Indicated Resources and 1 million tonnes of Inferred Resources associated with Lik South; and 5 million tonnes of Inferred Resources in Lik North. Scott Wilson RPA recommends that the potential for an underground operation to supplement the open pit and extend the mine life be considered and included for consideration in future project planning. Future drill plans include expanding and upgrading potential.

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 be categorized as Mineral Reserves. The capital cost estimate includes assumptions for earthworks and concrete and excludes civil work due to any adverse soil condition. There is no certainty that the reserves development, production rate, and economic forecasts will be realized. 

Scott Wilson RPA completed the preliminary assessment study using estimates for access road and port costs prepared by others. 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, R. Dennis Bergen, P.Eng., Associate Principal Mining Engineer with Scott Wilson RPA , Neil Gow, P.Geo., Associate Consulting Geologist, and William E. Roscoe, Ph.D., P.Eng., Principal Geologist, all of whom are qualified persons as defined by National Instrument 43-101. 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 www.zazumetals.com.

Additional information about the property is on the Teck website (www.teck.com). Zazu is not responsible for the content, accuracy or timeliness of material contained on the Teck website.

ON BEHALF OF THE BOARD OF DIRECTORS

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 South 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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