NorZinc Announces Positive PEA Including After-Tax NPV8% Of US$299M on Extended 20-Year Mine Life at Higher 2400 tpd Throughput – Yahoo Finance

NZC-TSX NORZF-OTCQB

(All figures are presented in US Dollars unless otherwise stated)

VANCOUVER, BC, Oct. 21, 2021 /CNW/ - NorZinc Ltd. (TSX: NZC) (OTCQB: NORZF) (the "Company" or "NorZinc") is pleased to announce the results of a Preliminary Economic Assessment ("PEA") for its 100%-owned Prairie Creek Project ("Prairie Creek" or the "Project") in the Northwest Territories, Canada. The PEA incorporates an updated Mineral Resource Estimate providing an economic assessment for a 2,400 tonnes per day ("tpd") mine plan with a life of mine of 20.3 years.

PEA Highlights Include:

After-tax NPV8% of $299 million using base case metal prices of $1.20/lb zinc, $1.05/lb lead and $24/oz silver (pre-tax NPV8% of $505 million)

After-tax IRR of 17.7% (pre-tax IRR of 21.4%) based on initial Capex of $368 million, including $35 million of contingency, with significant opportunity to improve initial costs through cost optimization

At recent zinc spot price of approximately $1.50/lb zinc, after-tax NPV8% increases to US$479 and IRR increases to 22.8%,

LOM C1 by-product costs of $0.19/lb Zn and C3 by-product costs of $0.60/lb Zn (C1 co-product costs of $0.73/lb ZnEqi and C3 co-product costs of $0.92/lb ZnEq), placing Prairie Creek in the lowest third of zinc mines once in operation

Average annual payable ZnEq production of 261 Mlbs, including 2.6 Moz of average annual silver production, over a 20-year life of mine, with a payback of 4.8 years

Total cumulative LOM EBITDA of $2.5 billion; average annual EBITDA of $123 million

Updated Mineral Resource Estimate includes 9.8 M tonnes of total Measured & Indicated ("M&I") Resources at 22.7% ZnEq, a 15% increase in total M&I tonnage from the September 2015 Mineral Resource Estimate and 6.4 M tonnes of total Inferred Resources at 24.1% ZnEq

Updated definitive Feasibility Study to commence immediately and will incorporate the investigation of numerous identified opportunities to add value by optimizing capex and opex input costs

Project represents a majorly de-risked project with world-class potential in one of the most favourable and stable jurisdictions in the world

"The completion of the PEA is yet another significant milestone for NorZinc as it showcases the true potential of the Prairie Creek deposit, demonstrating a robust throughput rate of 2,400 tpd over a long mine life of over 20 years, highlighting the potential value and benefit this project has to deliver to all stakeholders," commented Rohan Hazelton, CEO of NorZinc Ltd. "While the PEA considers historical data with a reinterpreted mineral resource, it outlines a solid base-case for management as we continue on the planned path towards financing and development of the Prairie Creek Project. The modified permits for the expanded throughput rates are well underway with approvals expected in late Q1 2022."

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"We have identified multiple opportunities for further operational and economic optimization, which we will continue to investigate as we move towards the next step of completing an updated Feasibility Study for the Project, particularly in relation to input costs relating to both the initial and sustaining capital and operating costs as well as the ore sorting strategies aimed at optimizing processing. The fundamentals for zinc, our primary product, are strong and are enhanced by the recent addition of zinc to Canada's Critical Mineral List which highlights the minerals critical to the building of a clean and digitized economy. Silver is also expected to continue to play a significant role in the development and financing of the project as the market demand for silver streams is high."

"Overall, this PEA demonstrates compelling economics which provides management with greater conviction in early-stage financing discussions already taking place. And while metallurgy continues to be a consideration, management is confident in the quality and marketability of our concentrate. We have strong interest and demand for our concentrates as recently reaffirmed with our MOU with Boliden."

Table 1: Highlighted Results from PEA

After-Tax Net Present Value ("NPV") (Discount Rate 8%)

$299M

After-Tax Internal Rate of Return ("IRR")

17.7%

After-Tax Payback Period

4.8 Years

Pre-Production Capex

$368M

Sustaining Capex and Closure Costs

$332M

Average Annual Payable Silver

2,551 koz

Average Annual Payable Zinc

122 Mlbs

Average Annual Payable Lead

101 Mlbs

Life of Mine ("LOM")

20.3 Years

Total Resource Mined

17.2 Mt

Average ZnEq[i] Diluted Grade of Mineral Resources Mined

17.10%

Gross Revenue After Royalty (LOM)

$6,274M

After-Tax Free Cash Flow (LOM)

$1,121M

Average Annual EBITDA

$123M

C1 Costs over LOM (By-Product)

$0.19/lb Zn

C3 Costs over LOM (By-Product)

$0.60/lb Zn

C1 Costs over LOM (Co-Product)

$0.73/lb ZnEq

C3 Costs over LOM (Co-Product)

$0.92/lb ZnEq

Zinc Price - Flat (LOM)

$1.20/lb

Lead Price - Flat (LOM)

$1.05/lb

Silver Price - Flat (LOM)

$24.00/oz

FX Rate (CAD:USD)

1.25

The PEA was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and led by Ausenco, with contributions from Global Mineral Resource Services, Mining Plus and F. Wright Consulting.

The reader is advised that the PEA summarized in this press release is preliminary in nature and is intended to provide an initial, high-level review of the project's economic potential and design options. The PEA replaces and supersedes the Company's previous 2017 Feasibility Study on the project. The PEA mine plan and economic model includes numerous assumptions and the use of Inferred Resources. Inferred Resources are considered to be too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral Resources that are not mineral reserves do not have demonstrated economic viability.

Figure 1: After-tax cash flow by year of production (CNW Group/NorZinc Ltd.)

Table 2: Capital Costs Summary

Capital Cost Summary

Pre-Production (US$M)

Mining

$51

Site Preparation

$1

Process plant1

$41

Paste Tailings Plant

$28

Surface Infrastructure2

$41

All Season Road (ASR)

$89

Total Direct Costs

$251

Site Indirects3 (including EPCM)

$39

Owner's costs - Operational Readiness & Fuel

$25

Owner's costs - Capitalized Pre-production

$18

Total Directs, Indirects and Owner's costs

$333

Contingency

$35

Total Pre-Production (Initial) Capital

$368

Notes to table:

1.

Includes dense media separator, mill building remediation, process plant upgrade

2.

Includes site utilities, process plant mobile equipment, ancillary buildings, water treatment plant, water storage pond, waste rock pile, winter road maintenance and management, underground infrastructure

3.

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NorZinc Announces Positive PEA Including After-Tax NPV8% Of US$299M on Extended 20-Year Mine Life at Higher 2400 tpd Throughput - Yahoo Finance