Akie and Kechika Regional Projects November 2017 Legal Disclaimer
This presentation contains forward looking statements ; including in particular, statements about Canada Zinc Metals Corp . ’s plans, strategies and prospects . These have been based on the Company's current assumptions, expectations and projections about future events .
Although the Company believes that the expectations reflected in these forward looking statements are reasonable, the Company can give no assurance that these expectations will prove to be correct or that the results anticipated in the forward looking statements will be achieved . These forward looking statements include risks and uncertainties, which relate to, amongst other things, market conditions, industry uncertainty and other such factors which may cause the Company’s actual results to be materially different .
Ken MacDonald P . Geo . , Vice President of Exploration, is the designated Qualified Person as defined by National Instrument 43 - 101 (NI 43 - 101 ) and is responsible for the technical information contained herein .
Robert Sim, P . Geo . , is an independent consultant and served as the Qualified Person responsible for the preparation of the 2016 NI 43 - 101 Technical Report on the Akie Project and is responsible for the 2016 mineral resource estimates for the Cardiac Creek deposit, situated on the Company’s 100 % owned Akie Property .
2 Zinc = Construction & Infrastructure Metal
• Zinc is the third most - used nonferrous metal in the world, after aluminum & copper
• Primarily used as a coating on iron & steel to protect against corrosion – used in buildings, bridges, railways and automobiles – zinc is a “ construction & infrastructure ” metal
• As global economic recovery progresses over the next few years – with continued growth in China , India & other emerging economies – along with the recovery in the USA – a corresponding increase in the demand for zinc is expected to put upward pressure on global zinc prices
• Continuing long - term urbanization and industrialization will mean that the developing world will support growth in global zinc deman d
• Chronic shortage of supply of zinc is being forecasted . The coincidental closure of major zinc mines (Brunswick, Perseverance, Century, Lisheen, Skorpion) through depletion coupled with a very limited number of new zinc mines in the development pipeline is expected to lead to robust zinc price
• Major mine closures during the last 2 years and over the next few years will remove 15 % of the current global zinc concentrate supply
3 Opportunity
CRU (research group) analyst, Helen O’Cleary :
Forecast that enormous deficits in zinc will emerge in 2017 and 2018 . In a presentation at the Sixth International Zinc Conference in Dubai which she called “ Zinc – The New Copper ” she outlined how … growing consumption in all major regions “ will run ahead of production growth beyond 2015 ” causing zinc prices to “ spike towards the end of this decade . ” CRU Group is now forecasting the biggest shortage on record .
Similar statements about the upcoming shortage of mine supply and zinc inventories being drawn down below critical levels have been made by Glencore and Teck Resources .
RBC Capital Markets in H1 2017:
Zinc remains our preferred commodity . We believe the market has moved into deficit and will remain in deficit throughout our forecast period, drawing inventories down below critical levels and leading to very strong pricing . We estimate that global demand rebounded 2 . 7 % in 2016 , and forecast further growth of 3 . 8 % in 2017 and 3 . 7 % in 2018 , followed by trend growth of 2 . 3 % thereafter . We forecast an average zinc price of $ 1 . 25 /lb in 2017 , $ 1 . 35 /lb in 2018 , $ 1 . 35 /lb in 2019 , and $ 1 . 50 /lb in 2020 .
Don Smale of the International Lead and Zinc Study Group (ILZSG) :
Additional Zn capacity is required to replace scheduled closures and projected global increases in demand . He sees only 400 , 000 t of new Zn mine capacity coming on stream within the next 2 years, with a further 900 , 000 t over 2018 - 2020 . “A number of large projects are under consideration, but questions remain over timing and viability for most ,” he added . In the meantime, Zn mine closures and curtailments - including MMG's Century, Vedanta's Lisheen and cutbacks announced by Glencore, as well as decreases expected for Kazakhstan and Peru, have tightened supply and deepened the concentrate deficit .
4 Committed Zinc Supply Insufficient for Demand Forecast Zinc Refined Balance
• Insufficient mine supply expected to constrain refined production - From 2014 - 2020, refined metal supply increase of only 792 kt - Over the same period, refined demand increase of 2.8 Mt • Market was in deficit in 2016
• Ongoing large inventory that has funded the deficit will continue in 2018
• Metal market moving into significant deficit with further mine closures and depleting inventories
5 Source: Teck Slowing Zinc Mine Production Growth
Zinc Mine Production Peaks in 2020
Committed & operating mine production peaking
6 Source: CRU , ILZSG, Teck Resources Management & Directors
• Mr. Peeyush Varshney, LL.B. - CEO & Chairman Principal and Director of Varshney Capital Corp., director of Mountain Province Diamonds Inc. (TSX:MPVD ) and E3 Metals Corp. ( TSX.V:ETMC ).
• Mr. Praveen Varshney, FCPA, FCA – CFO & Director Principal and Director of Varshney Capital Corp., director of Mogo Finance Technology Inc. ( TSX:MOGO ).
• Dr. John Thomas, Ph.D – Metallurgist - Independent Director Extensive project management experience; VP Operations of other publicly listed junior mining companies.
• Mr. Marco Strub, Portfolio Manager – Independent Director From 1997 to 2003 was a partner of Exulta AG and is currently a principal of Sircon AG.
• Mr. Ken MacDonald, P. Geo. – VP Exploration, QP Over 28 years experience in the mineral exploration sector; from early stage exploration to underground bulk sample to active underground mining. Involved in small and large - scale projects including participation in mine prefeasibility and feasibility studies. Is qualified person (QP) as per NI - 43 - 101 Standards of Disclosure for Mineral Projects.
• Mr. Nicholas Johnson, B.Sc.H (Queens 2001) – Project Manager Over 15 years experience as exploration geologist; including at Goldcorp’s Red Lake mine & also employed by Watts Griffis & McOuat (WGM) Mining Consultants and Bema Gold.
7 Corporate Summary
Share Structure – as at Nov 9 , 2017 • Dominant landholder in British Issued & Outstanding 167.16M Columbia’s highly prospective Options 9.07M zinc - lead - silver Kechika Warrants 3.46M District 52 week low/high range $0.22/$0.48 • Host to several base metal Average daily volume 250,000 shares Cash +$6 Million deposits and numerous targets • CZX owns 100% of NI 43 - 101 compliant Cardiac Creek deposit (Akie) • Akie is an advanced stage project with 143 drill holes • Located next to Teck & Korea Zinc’s Zn - Pb - Ag Cirque deposit
• Kechika Regional - Significant Key Shareholders new discovery potential Tongling Nonferrous Metals Group Jintuo (Canada) Investment Co. Ltd Teck Resources Korea Zinc 8 Akie & Kechika Regional Properties
Akie Property : 116 km 2 (yellow) Kechika Regional : 505 km 2 (red) Kechika Regional - Optioned to Teck Resources/Korea Zinc: 177 km 2 (purple)
• 230 mineral claims 100% Owned by CZX
• Claims Overlie 140 km of prospective Gunsteel Formation
• Claims in Good Standing to Dec. 2025
• 79,780 hectares in BC’s highly prospective Kechika Zn - Pb - Ag SEDEX belt
• Belt hosts several base metal deposits ( Akie , Cirque, Driftpile ) & numerous lightly or untested targets
9 Tongling Nonferrous Metals Group
Integrated China SOE: copper mining, mineral processing, smelting & refining Ranked No.2 in China & No.6 in the world in terms of copper cathode production (2008) Paid $678M in 2010 for Corriente Resources’ undeveloped copper projects in Ecuador
10 Teck & Korea Zinc: Investors
Teck & Korea Zinc Earn - in Agreement: Teck (TSX: TCK.B) is:
Tiered option agreement to acquire up to One of the world’s largest producers of zinc 70% interest in the Pie, Cirque East & Yuen (645,000 tonnes of zinc con per year) properties (three of the contiguous Kechika properties) Red Dog mine in Alaska is one of the world's largest zinc mines Total aggregate of $8,500,000 in exploration expenditures on the properties Trail Smelter in BC is one of the world's on or before December 30 , 2019 largest fully - integrated zinc & lead smelting and refining operations Teck & Korea Zinc Private Placement: Have the Cirque Property (20 km NW of Acquired 1,250,000 units of CZX at a price Akie & contiguous with Pie & Yuen ) per unit of $0.40 when share price was trading at $0.20
• $3.0 million in cumulative exploration expenditures to end of 2016 • Large airborne gravity survey flown by Teck JV in 2014 - 2015 • Additional $0.5 million in expenditures required by the end of 2017 (1 st Option) • High priority drill targets identified for testing
11 Location and Infrastructure
• Akie & Kechika regional properties located in NE British Columbia
• 260 km NNW of Mackenzie • 450 km NNW of Prince George
• All - season road access to the Akie property & planned UG development at Cardiac Creek
• Existing paved highway and railway access at Mackenzie
• BC’s largest hydroelectric power source is 160 km SE
• Deep sea port at Prince Rupert and Teck zinc smelter at Trail, BC
• Strong Government & Local Community Support
12 Geological Setting
World Famous Target: Selwyn Basin “Gunsteel Shale”
Kechika Trough: SE extension of Selwyn Basin into BC
13 Akie Property
Work completed by CZX 2005 - 2017
• Diamond drilling: ~65,000 total metres in 143 diamond drill holes; 112 holes in Cardiac Creek deposit block model • NI 43 - 101 Indicated and Inferred resource estimate prepared & updated • Road construction to access planned UG workings: total 14.7 km • Construction of 50 person trailer camp & core storage/logging facility • Secured UG and Surface Exploration Permits • Engineering baseline studies (2010 -
ongoing) Geotechnical & Groundwater Drilling • Environmental baseline studies (2007 - ongoing)
14 M u ltiple Wide High Grade Intercepts
Hole # Int (m)* Zn+Pb (%)
05 - 30 24.63 14.69 05 - 32 19.60 14.70 07 - 45 26.11 16.98 07 - 49 14.13 13.65 07 - 50 14.69 20.08 07 - 51 24.93 12.40 07 - 53 11.36 15.15 08 - 57 14.44 12.14 15 - 121 20.84 15.69 15 - 124 17.04 13.20 17 - 137 15.44 22.61
* Interval is true width 15 Cardiac Creek Long Section
1,300 metre strike length Room to Expand : 800 metre down - dip extent Open at depth & along strike 20 metre average true thickness 16 Cross Section of Drill Hole A- 17- 137 Resource Calculation (NI 43 - 101 Compliant: 2016)
Cut Off Tonnes Zinc Lead Silver Combined Zinc Metal Lead Metal Silver Grade % (000’s) (%) (%) (g/t) Zn + Pb (Mlbs) (Mlbs) (Moz) Zinc (%)
INDICATED
2 37,141 5.93 1.14 10.40 7.07 4,852 931 12.4
3 30,504 6.68 1.29 11.50 7.97 4,489 869 11.3
4 24,875 7.40 1.44 12.60 8.84 4,057 787 10.0 5 19,647 8.17 1.58 13.60 9.75 3,540 685 8.6 base case 6 15,137 8.97 1.73 14.70 10.70 2,995 578 7.2
7 11,346 9.81 1.90 15.80 11.71 2,454 474 5.8 INFERRED 2 32,666 4.07 0.68 7.40 4.75 2,932 489 7.7
3 20,730 5.01 0.85 8.70 5.86 2,291 388 5.8
4 13,200 5.89 1.00 9.90 6.89 1,714 292 4.2 5 8,070 6.81 1.16 11.20 7.97 1,211 207 2.9 base case 6 4,810 7.72 1.32 12.40 9.04 819 140 1.9
7 2,671 8.74 1.49 13.60 10.23 515 87 1.2
Notes: (1) Estimate based on drilling results inclusive to 2015 data (2) Average width of deposit is estimated at 20 metres (true thickness)
18 Gross In - situ Metal
Indicated Inferred Metric tonnes 19.6 Million 8.1 Million Zn Cut - off Grade 5% 5% Average Grade Zinc – 8.17% Zinc – 6.81% Lead – 1.58% Lead – 1.16% Silver – 13.6 g/t Silver – 11.2 g/t Gross Contained Zinc – 3.54 billion lbs Zinc – 1.21 billion lbs Metals Lead – 0.68 billion lbs Lead – 0.21 billion lbs Silver – 8.6 million oz Silver – 2.9 million oz
• Additional 10,021 metres of drilling since 2012 • Indicated resource increased by 7 million tonnes from 2012 update • 71% of the resource is in the Indicated category • Average 100 metre drill spacing in continuous central high grade core • 2017 drill results have not been added to model or resource yet
19 Opportunity: Under - valued
CZX currently trades at an EV/lb Zn - equiv. (M&I Resources) of US$0.0076/lb, compared with select peers averaging US$0.0256/lb. Based on total resources (M,I&I) CZX trades at US$0.0057/lb, compared with US$0.0190/lb Market EV/ ZnEq EV/ZnEq Close Annual Shares Cap Cash EV M&I+I EV/Resource M&I Resource M&I+I Resource Company Ticker Price Low - High O/S (M) (US$M) ( US$M) ( US$M) P/NAV (Mlbs Zn) (US¢/lb) ( Mlbs ZnEq) ( US¢/lb) ( Mlbs ZnEq) (US¢/lb) ZINC – EXPLORATION/DEVELOPMENT
Arizona Mining AZ - T 3.34 1.70 - 3.68 305.2 792 83 710 0.81 9,630 7.40 12,728 5.57 20,082 3.53
Tinka Resources TK - V 0.60 0.19 - 0.78 212.0 99 7 92 0.53 2,446 3.80 2,718 3.39
Aquila Resources AQA - T 0.26 0.19 - 0.32 275.4 55 3 52 0.59 224 23.10 1,394 3.70 1,714 3.01
Canada Zinc Metals CZX - V 0.28 0.22 - 0.48 163.0 35 4 31 4,751 0.70 4,154 0.76 5,554 0.57
Zinc One Resources† Z - V 0.45 0.17 - 0.90 99.4 34 6 29 578 5.00 480 6.02 578 5.00
Canadian Zinc CZN - T 0.17 0.15 - 0.32 266.1 34 4 30 0.25 3,579 0.80 3,540 0.85 6,622 0.45
Adventus Zinc ADZN - V 0.93 0.57 – 1.15 45.6 33 0 33
Ironbark Zinc IBG - A 0.08 0.06 - 0.13 539.4 32 2 30 0.31 8,394 0.40 6,398 0.47 8,951 0.34
PinePoint Mining ZINC - V 0.21 0.17 - 0.57 151.2 25 3 22 4,638 0.50 3,808 0.57 8,278 0.26
Rathdowney Resources RTH - V 0.18 0.13 - 0.33 161.7 23 3 20 2,975 0.70 3,580 0.56 Average - Zinc 0.50 4.69 2.56 1.90 Explorers Excluding Max & Min 0.48 2.68 2.29 1.69 Source: Company Reports (historical data), Echelon Wealth Partners (estimates), Capital IQ (share price data, consensus esti mat es ) † Historical , Non NI43 - 101 Resource
20 Imbricate Thrust Faults
Schematic: development of 3 repeat thrust panels on Akie panel
Akie Western Panel: Akie Central Panel: Akie Eastern Panel: • GPS Zone • Cardiac Creek Deposit • South Zinc Anomaly • Zn - Pb ± Ag soil anomaly • NW Zone • Sitka Showing • North Lead Anomaly • AG - Zn - Pb soil anomalies
Cardiac Creek Deposit 21 Kechika Regional Properties
• Potential for large tonnage SEDEX deposits in thrust repeated Gunsteel Formation (140 km of strike length)
• District - scale exploration play: 100% owned by CZX
• Historical exploration from 1970’s to 1980’s; focused on visibly mineralized surface targets; little work done since
• Large areas with incomplete sample coverage; numerous sulphide - barite targets mapped but never tested
• Select drill targets only lightly tested (13,875 m first pass assessment only)
22 Mt. Alcock Project
• 9,172 ha property
• Lightly drill tested in 1989 on main zone ( 2,264 metres total)
• Main zone is massive SEDEX barite cap overlying Zn - Pb mineralization
• No modern follow - up; numerous untested coincident soil/ geophysics targets
• NI 43 - 101 Technical Summary report issued in 2012
• Drill permit in good DDH AK - 89 - 3: 8.8 metres Ɨ @ standing until 2019 9.3% Zn + Pb & 1.2 oz/t Ag
Ɨ denotes core length 23 Exploration Target at Mt. Alcock
24 2017 Exploration Summary
Approximately 4,700 meters of HQ diamond drill core completed on 8 holes using 2 drill rigs; total of 1,100 samples submitted to assay lab All drill holes intersected the target Cardiac Creek Zone with well - mineralized intervals recovered 2017 program completed on schedule and under budget Excellent drill results expected from 2017 drilling on the Cardiac Creek Deposit New geostructural interpretation ongoing based on new 2017 structural analysis using Satellite imagery Advanced drill targets developed on Akie (e.g.. North Lead, Sitka ) and on key regional properties (Yuen North, Mt. Alcock ) Expect multi - year extension to Akie UG permit in fall 2017 Expect all 2017 drill assay results before end of Fall
25 Upcoming 2017 - 2018 Catalysts
Release 2017 drill results; reconfigure the geology & resource models: Q4 2017
Complete metallurgical testing for Cardiac Creek: Q1 2018
Re - issue new resource calculation for Cardiac Creek deposit: Q2 2018
Preliminary Economic Assessment (PEA): Q2 2018
26 Summary
Cardiac Creek (Akie Property) is one of the largest undeveloped zinc - lead - silver deposits in the world & has attracted investment from large base metal mining companies including Tongling Nonferrous Metals , Teck Resources and Korea Zinc – attracted by project’s scale, grade, district exploration potential and jurisdiction
Company has dominating & highly prospective land position in the district with a strong likelihood of discovery of additional deposits : Mt . Alcock, Bear/Spa, Pie
All mineral claims in good standing until 2025 Permits for further surface and underground exploration are secured
Infrastructure in the area is well established with road access to Akie Kechika Regional claims – 140 km bluesky district - scale discovery potential – 35 years of historical exploration data – limited drill testing of select targets – follow - up warranted
Considering “spinout” of regional properties into another publicly traded vehicle for the benefit of existing CZX shareholders
Significantly undervalued vs . peer group
Chronic shortage of zinc is occurring ; coincidental with depletion of major zinc mines coupled with very limited new mine developments leading to very bullish views on zinc 27 Canada Zinc Metals Corp.
Please contact us at:
2050 – 1055 West Georgia St. PO Box 11121, Royal Centre Vancouver, BC, Canada V6E 3P3
T: 1.604.684.2181 TF: 1.855.684.2181 E: [email protected] W: www.canadazincmetals.com
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