NorZinc begins metallurgical testing on Prairie Creek drill core

NorZinc (TSX: NZC; OTC: NORZF) has initiated a feasibility study level metallurgical test program on its Prairie Creek project located in the Dehcho region of the Northwest Territories. The program will be conducted by SGS Canada, a leading technical services provider, with the objective of finalizing milling parameters and performance characteristics for the first three to five years of planned production.

“Metallurgical testing represents a critical step in successfully transforming an exploration stage project into an economically viable mining opportunity, and we are pleased to have engaged SGS Canada to complete this next phase with us which will ensure this study is conducted to the highest standards,” stated Rohan Hazelton, president and CEO of NorZinc.

To generate material required for metallurgical testing, the company has been conducting drilling on the Prairie Creek property since June, with approximately 3,700 metres completed to date and another 1,000-1,500 metres planned. Drill core samples have already been out for delivery to an assay laboratory before being fed into metallurgical testing with SGS.

Running concurrently with this drill program is a geotechnical study using the same holes, aimed at improving dilution estimates for mineralized material to be extracted during the same first three-to-five-year period of the mine plan. Since this study requires fewer holes than the metallurgical program, it is expected that field data collection will conclude near the end of this month.

Results of the metallurgical program will be incorporated into updated resource and reserve models, in order to provide an updated mine plan incorporating the additional confidence these summer field programs are expected to bring. In addition, NorZinc expects to follow up on the above drill programs with a smaller (less than 1,000 metres) channel twinning program if weather conditions allow, using the on-site surface drill rigs to core into the main quartz vein (MQV) near the historical underground channel samples, to confirm the validity of that dataset.

Mining activity at Prairie Creek can be dated back to 1928, when mineralization was first discovered by Poole Field. Limited work was conducted until 1966, when Cadillac Explorations acquired the property and subsequently explored the mineralized areas now known as zones 3, 7 and 8.

In 1970, the property was optioned to another company that carried out underground development of zone 3, bulk sampling and preliminary metallurgical test work. Some surface drilling was also carried out on zones 6, 7 and 9. However, the option agreement was terminated later that year.

In 1980, an independent feasibility study was completed on the project by Kilborn Engineering. Financing negotiations were completed with a private company owned by Nelson Bunker Hunt and William Hunt of Texas (the Hunt brothers). In the same year, Cadillac acquired the 1,000 tonne-per-day Churchill copper concentrator, which was dismantled and transported on the winter road to Prairie Creek.

By May 1982, the surface facilities were 90-95% complete, and mine preparation work to produce an initial 500 tonnes per day was finalized. A total of $64 million had been spent on the project. At that time the silver price collapsed, forcing Cadillac into bankruptcy, after which time the Prairie Creek project was tied up in litigation until 1990.

In 1991, Nanisivik Mines acquired the property and later optioned it to NorZinc (then known as San Andreas Resources). An asset purchase agreement in 1993 allowed NorZinc to acquire a 100% interest in the property and a 60% interest in the plant and equipment. By 2004, NorZinc had secured all the remaining interest in the mine asset.

Since 1991, NorZinc has completed more than 78,000 metres of surface diamond drilling and underground exploration programs, which greatly expanded the mineral resources on the Prairie Creek property. Its latest resource estimate (2021), comprising the main quartz zone, stockwork and stratabound massive sulphides, totalled 9.8 million tonnes grading 139 ppm silver, 8.8% lead and 9.7% zinc in the measured and indicated category, plus 6.4 million tonnes grading 150 ppm silver, 6.7% lead and 12.9% zinc inferred.

A preliminary economic assessment published in October 2021 outlined a 20-year operation based on a throughput rate of 2,400 t/d with average annual payable of 122 million lb. of zinc, 101 million lb. of lead and 2.6 million oz. of silver. It has an after-tax net present value (at 8% discount) of US$299 million and internal rate of return of 17.7%.

NorZinc shares were trading at 2¢ apiece as of mid-morning in Toronto on Wednesday. Its shares have traded in a 52-week window of 2¢ and 3¢. It has a market cap of $20.8 million.