Canadian Zinc Corporation
TSX : CZN

Canadian Zinc Corporation

November 24, 2006 09:25 ET

Canadian Zinc Corporation: $13 Million Financing Completed

Programs at Prairie Creek to Continue Throughout Winter

TORONTO, ONTARIO--(CCNMatthews - Nov. 24, 2006) -

Not for dissemination in the United States or through U.S. newswires

Canadian Zinc Corporation (TSX:CZN) is pleased to report it has closed the previously announced financing to raise gross proceeds of $13 million.

The financing, which was led by Northern Securities Inc., was underwritten by Northern Securities Inc., Canaccord Adams and Octagon Capital Corporation, and was placed with Canadian institutional and private client investors.

The proceeds of $13,000,000 consisted of $5,000,000 in Units (5,555,555 Units) and $8,000,000 in Flow-Through Shares (6,956,522 shares). The Flow-Through Shares were priced at $1.15 per share. The Units were priced at $0.90 per Unit, with each Unit consisting of one common share and one-half share purchase warrant. Each full warrant is exercisable to purchase one common share at a price of $1.15 per share until November 23, 2008.

The underwriters were paid a commission of 7% in cash and were issued broker warrants equal to 7% of the Units sold in the offering and 7% of the Flow-Through Shares sold in the offering. Each broker unit warrant is exercisable at $0.93 into one broker unit consisting of one common share and one half warrant, with each whole warrant exercisable at $1.15 until November 23, 2008. Each broker flow through warrant is exercisable into one common share at $1.15 until November 23, 2008.

The securities issued in connection with the financing are subject to a hold period and may not be traded until March 24, 2007, except as permitted by Canadian securities legislation.

Following the financing Canadian Zinc has 107,590,212 shares issued and outstanding.

$32 Million in Cash

At September 30, 2006 Canadian Zinc held cash and deposits of $21.7 million and following closing of the financing the Company now has cash and deposits of approximately $32 million placing the Company in a strong financial condition to carry out its ongoing exploration and development programs as it moves the Prairie Creek mine towards production.

Operations at Prairie to Continue Throughout Winter

The ongoing programs at Prairie Creek minesite continue at full pace with good progress Driving of the new underground decline tunnel has now advanced over 300 metres and it is expected that it will reach the planned target of 400 metres of development by year end.

Five underground diamond drilling stations have now been established at various intervals along the decline and underground diamond drilling is ongoing. A total of 10,000 metres of underground drilling is planned in the current phase.

The Company has decided to maintain the current operations and programs at Prairie Creek minesite throughout the coming winter season with only a short Christmas Holiday break. This is the first time in many years that the minesite will be kept open throughout the year. It is expected that the current phase of underground drilling will continue throughout the first quarter of 2007.

Acho Camps and Catering Ltd. a subsidiary of Beaver Enterprises Limited, which is the economic development arm of the Acho Dene Koe First Nation of Fort Liard (part of the Dehcho First Nations), is the contractor for the camp catering and camp maintenance at the Prairie Creek mine. The camp facilities have been upgraded to support year round activity. Procon Mining and Tunnelling Ltd., of Burnaby B.C. is the contractor for the underground development and Advanced Drilling Ltd., a subsidiary of Cabo Drilling Corp., is the contractor for the underground drilling.

About Canadian Zinc

Canadian Zinc's 100% owned Prairie Creek (zinc/silver/lead) project, located in the Northwest Territories, includes a partially developed underground mine with an existing 1,000 ton per day mill and related infrastructure and equipment. The Prairie Creek property hosts a major mineral deposit containing a historically estimated resource of 3.6 million tonnes (measured and indicated) grading 11.8% zinc; 9.7% lead; 0.3% copper and 141.5 grams silver per tonne and 8.3 million tones (inferred) grading 12.8% zinc; 10.5% lead and 0.5% copper and 169.2 grams silver per tonne, with significant exploration potential. The deposit contains an estimated, in situ 3 billion pounds of zinc, 2.2 billion pounds of lead and approximately 70 million ounces of silver.

Cautionary Statement - Forward Looking Information

This press release contains forward-looking information. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, the issue of permits, the size and quality of the company's mineral resources, future trends for the company, progress in development of mineral properties, future production and sales volumes, capital and mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, the outcome of legal proceedings and the financial results of the company. The Company does not currently hold a permit for the operation of the Prairie Creek Mine. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that mineral resources will be converted into mineral reserves.

Contact Information

  • Canadian Zinc Corporation
    John F. Kearney
    Chairman
    (416) 362-6686
    (416) 368-5344 (FAX)
    or
    Canadian Zinc Corporation
    Alan Taylor
    VP Exploration & Chief Operating Officer
    (604) 688-2001 or Toll Free: 1-866-688-2001
    (604) 688-2043 (FAX)
    Email: czn@canadianzinc.com
    Website: www.canadianzinc.com