Vancouver —
The scoping study, performed in-house using independent consultants and contractors, calls for a 1,500-tonne-per-day operation capable of producing 95 million lbs. zinc annually over 18 years.
The junior (formerly known as San Andreas Resources) has spent the better part of a decade promoting the project, which hosts a geological resource of 11.8 million tonnes grading 12.5% zinc, 10.1% lead and 0.4% copper, plus 161 grams silver per tonne. The resource was calculated by MRDI, a division of AGRA-Simons.
The study proposes a pretax internal rate of return of 45.6%, with capital costs pegged at $40.5 million. The operation would utilize the mine and mill, which were built in 1982. The break-even cash cost of production, before financing and taxes, is estimated to be US34.5 per lb. zinc.
Canadian Zinc is now preparing a bankable feasibility study, which will entail a 900-tonne-per-day pilot-plant program. The company plans to submit applications for re-permitting of the entire operation later this year in the hope of starting production by 2003.
The Prairie Creek property, known formerly as Cadillac, was financed in the early 1980s to within months of startup, largely by Procan Exploration, a private company owned by the Hunt brothers of Texas. The owner, Cadillac Exploration, suspended construction activities in May 1982 after it ran out of money following a collapse of the silver price (silver had hit a short-lived high of US$50 per oz. in late 1979 and early 1980, when the project was given the green light). Cadillac was forced into bankruptcy after incurring about $64 million in expenditures on the property.
Facilities at the site include: a lined tailings pond; camp accommodation for 200 personnel; an office and warehouse shops; four 1.1-MW diesel-powered generators; two smaller, stand-by generators; and fuel storage tanks.
More than 4,000 ft. of underground drifting and crosscutting had been carried out on three levels before the project was halted. At the time, resources consisted of 1.8 million tonnes grading 11.75% zinc, 10.3% lead, 0.42% copper and 182 grams silver.
In 1991, San Andreas optioned the property from Nanisivik Mines. San Andreas was renamed Canadian Zinc in 1999 and it now owns all of the project, subject to a 2% net smelter return royalty (capped at $8.2 million) held by Titan Pacific Resources.
The Prairie Creek property is 500 km west of Yellowknife and 300 km north of the nearest railhead, at Fort Nelson, B.C.
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