Canadian Zinc Corporation Obtains Financing of US$20 Million

Canadian Zinc Corporation (TSX:CZN) announced that it has entered into an equity financing agreement with RCF VI CAD LLC, a wholly owned subsidiary of Resource Capital Fund VI L.P, pursuant to which RCF VI LLC has agreed, subject to shareholder and regulatory approvals, to purchase 100 million shares of Canadian Zinc at US$0.20 per share, for gross proceeds of US$20 million.

As quoted in the press release:

As part of the placement, RCF VI LLC will be issued 50 million short-dated warrants, exercisable at US$0.25 per share until December 31, 2018, which if exercised in full would generate an additional US$12.5 million, or a total potential equity financing of US$32.5 million.

The use of proceeds of the equity financing will include repayment of the US$10 million bridge loan advanced by RCF VI L.P. in December 2017 and the ongoing development of the company’s flagship Prairie Creek Zinc-Lead-Silver project in the Northwest Territories, Canada, including additional engineering and permitting work to improve project confidence, and general working capital.

The proposed equity financing with RCF VI LLC will be submitted to shareholders for approval at the forthcoming annual general and special meeting of shareholders, scheduled to be held in Vancouver, British Columbia, on June 27, 2018, and is subject to certain conditions precedent and regulatory approvals.

The existing investor agreement with RCF VI L.P., which contains various rights granted to RCF VI L.P., including participation rights to maintain its pro rata shareholding interest in the company for as long as it remains a significant shareholder, will be amended to include RCF VI LLC and to provide for the right of RCF VI to nominate additional members to the board of directors proportional to its shareholding, and to provide certain other project oversight rights.

John Kearney, chairman and CEO, commented:

This US$20 million equity financing by RCF is another strong vote of confidence in the company’s potential and the viability of the Prairie Creek project. RCF is the company’s largest shareholder and the investment at a subscription price of US$0.20 per share represents a 61 percent premium over the 10-day volume weighted average price of the company’s shares as of May 14, 2018. Management will be recommending that shareholders vote for approval of the financing.

Click here to read the full Canadian Zinc Corporation (TSX:CZN) press release.