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InZinc Mining Ltd. (TSXV:IZN) is a Canadian junior mineral exploration company based in Vancouver, British Columbia. InZinc is focused on advancing its 100% owned West Desert zinc-iron-copper-indium project in western Utah. A May 2014 independent Preliminary Economic Assessment (PEA) concludes that the production of clean and high value zinc, iron (magnetite) and copper concentrates through conventional mining and processing of the West Desert resources over a 15 year mine life has the potential to generate strong cash flow and a high rate of return.
Multiple opportunities for enhanced economics, including potential to expand the large resources currently outlined in the deposit, are present and further work leading to a pre-feasibility study is planned.
- 100% owned advanced stage zinc project approaching pre-feasibility
- One of the best located and larger undeveloped zinc resources
- Located in business-friendly and infrastructure-rich Utah
- Zinc-iron-copper-indium resource associated with massive, high-grade iron (magnetite) mineralization is open for expansion
- PEA results suggest it has the potential to be the highest returning (23% IRR after tax) zinc project within peer group
- Significant upside potential to PEA
- Experienced management and board with an established track record of mine development and finance
- Numerous large scale zinc mines will be closing in the near future leading to a global supply deficit
A Well-Located North American Zinc Project
The West Desert zinc-copper project is located in Utah, approximately 160 km southwest of Salt Lake City. It benefits from all-weather road access, on-site grid power, proximity to natural gas pipelines and is located 90 km from multiple transcontinental rail networks servicing western US ports and major North American markets.
PEA Illustrates Potential for Low-cost, Mid-tier Zinc Production
The West Desert deposit is situated in the historic Fish Springs Mining District which produced about 2.7 million ounces of silver in the early part of the 20th century. It is a magnetite-rich skarn containing significant levels of zinc, copper and indium along with recoverable gold and silver. The upper portions of the deposit have been oxidized to a depth of about 200 metres.
Based on approximately 40,000 metres of drilling, the current underground (non-oxide) resources are as follows:
April 2014: stated at a US$ 50 GMV (Gross Metal Value) per tonne cut-off; ZnEq based on 100% recovery and Zn=$1/lb, Cu=$3/lb, Magnetite=$115/t, and In=$600/kg
A May 2014 Preliminary Economic Assessment contemplates a 5,000 tonne per day underground mining operation ramping up to 6,500 tonnes per day in year three using longitudinal and transverse long-hole open stoping mining methods based on the underground resource only. Near surface oxide resources were not assessed and remain as a future opportunity for potential open pit mining.
Metallurgical test work confirmed that the underground resources of the West Desert project are amenable to conventional flotation processing to produce marketable zinc and copper concentrates. The concentrates will respectively contain significant levels of indium and precious metals and are clean, with no deleterious elements at penalty levels.
Test work also demonstrated that a marketable iron (magnetite) concentrate can be produced at very high recoveries and low expense using traditional magnetic separation. Efficient removal of a magnetite concentrate in advance of flotation improves the overall zinc and copper grades of feed to the flotation plant and is expected to enhance base metal recoveries.
Over a 14.8 year life, underground mining of the West Desert resources has the potential to produce:
- 1,593 million pounds of zinc
- 15 million tonnes of iron (magnetite) concentrate
- 566 tonnes of indium
- 147 million pounds of copper
- precious metals credits
The baseline economic metrics projected by the PEA include:
- +20% IRR (after-tax)
- >$250M NPV (8%)
- 14.8 year mine life
- 3.7 year payback (from construction)
- US$247M initial capital cost
- US$ (0.04) lb/zinc direct cash costs (C1)
- US$0.50 lb/zinc fully allocated costs (C3)
Open for Expansion and New Discoveries
Substantial resources at West Desert remain open for expansion to the east, west, and south. There is also potential for the discovery of new zones beyond these extensions.
InZinc Mining’s 100% owned West Desert project is an advanced stage zinc-iron-copper-indium project located in business-friendly and infrastructure-rich Utah. A May 2014 PEA illustrated the potential for low-cost zinc, copper and iron production at West Desert through conventional mining and processing while generating strong cash-flow and a high rate of return. The PEA identifies significant upside potential, including for the expansion of existing resources.
The project is fully permitted and bonded for continued exploration and further work leading to a pre-feasibility study is planned.
Chris Staargaard – President, CEO, and Director
Mr. Staargaard has over thirty-five years of experience in mineral exploration, having worked in a wide variety of geological environments both in Canada and internationally, with assignments ranging from initial evaluations through to resource estimation and preliminary economic assessments. Early experience included working as a project geologist for Kennco Explorations Ltd, Kidd Creek Mines Ltd. and Homestake Mineral Development Company. From 1988 until joining InZinc Mining in 2002 as CEO, he provided independent consulting geological services, mainly to junior mining companies and investment dealers involved in the mineral exploration industry.
He has been a Director of a number of publicly traded companies and currently serves on the board of Panoro Minerals and Megastar Development Corp.
Mr. Staargaard holds a B.Sc. in Geology from The Pennsylvania State University and an M.Sc. in Geochemistry from Queen’s University. He is a Professional Geoscientist (P.Geo.) registered with the Association of Professional Engineers and Geoscientists of British Columbia.
Kerry Curtis – Chairman and Director
Mr. Curtis has 31 years of experience in the Canadian mining sector. He is the former President, CEO and director of Cumberland Resources. At Cumberland, he was instrumental in advancing the Meadowbank gold project in Nunavut through discovery, deposit delineation and resource expansion from 200,000 ounces to 4 million ounces to become one of Canada’s largest undeveloped gold resources. Mr. Curtis further led the project through bankable feasibility, development permitting, project financing and initial construction until the company was acquired by Agnico-Eagle Mines in 2007 in a transaction valued at $730 million. Meadowbank is currently one of Canada’s largest producing gold mines.
Prior to Cumberland, Mr. Curtis focused on exploration to production stage polymetallic deposits in Canada, working with a variety of senior and junior mining companies including Minnova, Kennecott Canada and Redfern Resources. He is currently President and CEO of South Arm Resources, a private company based in British Columbia.
Mr. Curtis has completed over $1 billion in mining transactions during his career including: $170 million equity financing for exploration, feasibility, environmental permitting and project construction; $250 million syndicated debt financing; and merger/acquisition transactions valued at $825 million.
He is a graduate of the University of British Columbia with a Bachelor of Science in Geology and is a Professional Geoscientist (P.Geo.) registered with the Association of Professional Engineers and Geoscientists of British Columbia.
Wayne Hubert – Director
Mr. Hubert was most recently CEO and director of Andean Resources Limited from 2006 until December 2010. When he joined Andean, the company had a market capitalization of $70 million and a resource base of about 800,000 ounces of gold. Mr. Hubert helped lead Andean through several discoveries which increased the resource base to over 5 million ounces of high-grade gold as well as subsequent feasibility studies, financings and permitting. Andean was ultimately acquired by Goldcorp for $3.5 billion.
Prior to his tenure at Andean, Mr. Hubert was Vice-President Corporate Development and Investor Relations with Meridian Gold Inc. During his fourteen year career at Meridian, he gained considerable experience in the areas of finance, exploration, project development, permitting and construction. He has a bachelor of science in Chemical Engineering from the University of Cape Town and an MBA from Brigham Young University.
Louis Montpellier – Director
Mr. Montpellier attended the University of British Columbia and received his law degree from the University of Victoria. He began practising law in Vancouver in 1981 and worked exclusively in the capital markets as counsel to emerging issuers and listed public companies engaged in mineral exploration and mining from 1983 to 2010. He is a former founding director and senior officer of Extorre Gold Mines Ltd. which was acquired by Yamana in 2012. He continues to be involved as an independent director for a number of companies in the mining sector.
Ken Puchlik – Consultant
Mr. Puchlik is a Utah-based consultant to InZinc Mining with over thirty years of mineral exploration work with various companies including Freeport Gold, Independence Mining, Cyprus-Amax and Pegasus Gold, His experience includes the development of the 2.4 million oz Kubaka mine in the Russian far east and expanding the resource base at the Jerritt Canyon and Mt. Todd gold mines. For the last several years, he has been acting as Geology Manager of Exploration and Development for Sumitomo at their Pogo gold mine in Alaska where he has added over 1 million oz gold to the existing reserve.
Mr. Puchlik holds an M.S. in Economic Geology from the Mackay School of Mines in Nevada and is currently a director of the Utah Geological Survey.
Steve Vanry – CFO
Mr. Vanry holds a Chartered Financial Analyst designation, the Canadian Investment Manager designation and is a member of the CFA Institute; as well as the Vancouver Society of Financial Analysts. His business career includes over seventeen years with publicly traded natural resource companies at both management and board level during which time he focused on strategic planning, fund raising, mergers and acquisitions, regulatory compliance and financial reporting.
In 2003, he founded Fury Explorations Ltd., a company with advanced stage silver projects in Nevada which subsequently merged with Golden Predator Mines Inc. Mr. Vanry currently provides consulting services in corporate finance, business development and merchant banking and serves as director and/or officer for a number of public companies in the mining sector.
Joyce Musial – Corporate Communications
Ms. Musial has over 25 years’ of investor relations and corporate development experience with various junior and senior exploration and mining companies including Placer Dome Inc., Teck Exploration, Batero Gold Corp. and Cumberland Resources Ltd. At Cumberland, she was a part of the team taking that company from the exploration stage through syndicated bank financing and ultimately its acquisition by Agnico Eagle Mines.