Canadian Zinc Wraps Up Prairie Creek Drill Program

Tuesday saw Canadian Zinc (TSX:CZN,OTCQB:CZICF) complete an underground exploration program at its Northwest Territories-based Prairie Creek project, and according to the company the results look good. 
The program began in November 2014 with the rehabilitation of underground workings, and progressed on to drilling in February. Drilling wrapped up in July, and was comprised of 21 holes covering 5,484 meters — the company previously released results from the program in May and twice in June, and Tuesday brought results for the last seven holes. All holes in the program were completed from drill station #10, which is located at the 870-meter-level decline tunnel.
Speaking to the Investing News Network, Steve Dawson, vice president, corporate development at Canadian Zinc, explained that the program had two goals: to look for new mineralization in previously underexplored areas, and to convert a portion of the inferred mineral resource to the indicated category for inclusion in mine economics.
The company was definitely successful in the first respect. Tuesday’s release highlights hole PCU-15-72, which “returned some of the highest grades and thicknesses” seen during the program. Specifically, it includes a vein intercept of 7.5 meters grading 17.77 percent lead, 33.67 percent zinc and 247 g/t silver; that intersection is immediately followed by stockwork-style mineralization, which overall grades 6.92 percent lead, 11.95 percent zinc and 116 g/t silver over 24.5 meters.
However, perhaps more importantly, hole PCU-15-72 also includes a second vein intercept located below that stockwork-style mineralization. Indications of that second vein are also present in hole PCU-15-69 — in that hole, an initial vein intercept of 10.3 meters grading 8.48 percent lead, 7.81 percent zinc and 129 g/t silver is followed by another vein intercept grading 21.5 percent lead, 28.15 percent zinc and 452 g/t silver over 13 meters.
“We’re getting an indication of a second vein system that may be parallel,” Dawson explained, adding, “it has yet to be determined exactly in terms of geological interpretation.”

Success at the company’s second goal may take a little longer to materialize. Dawson said that an update to reserves and resources at Prairie Creek “will come about over the next little bit.” As of March 2015, Prairie Creek had a measured and indicated resource of 6.5 million tonnes at a combined grade of about 20 percent lead and zinc, plus 150 g/t silver; its inferred resource sat at 7.1 million tonnes grading 9.6 percent lead, 11.7 percent zinc and 177 g/t silver.
After reserves and resources are updated based on this year’s drill program, Canadian Zinc’s plan is to revise the mine plan for the project and issue an update on a 2012 prefeasibility study — that should happen sometime in 2015. “Then [we’ll] see what the market’s like and look to put this project into production,” he said.
Of course, Dawson and Canadian Zinc are aware that it may take some time for positive market conditions to emerge. Though there’s more optimism about zinc than there currently is about most commodities, even zinc isn’t doing its best.
“There’s the two goals of cash preservation vs. making our project attractive and ultimately putting a mine into production. It’s very hard to balance those things,” said Dawson. “But I’m hoping the market conditions are such that we do start seeing an upturn in zinc and lead prices. I think a lot of projects will seem much more interesting and attract a lot more interest.”
At close of day Tuesday, Canadian Zinc’s share price was up 5.56 percent on the TSX, at $0.095. Earlier in the day it rose as high as $0.105. On the OTCQB the company’s share price was sitting at $0.072, down 1.37 percent.
 
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.