Canada Zinc Metals Announces Closing of $18 Million Private Placement
November 18, 2010
Vancouver, British Columbia, Canada –Thursday, November 18, 2010 – Canada Zinc Metals Corp. (TSX Venture Exchange: CZX) (“Canada Zinc Metals” or the “Company”) is pleased to announce that, further to its news releases dated July 26, 2010 and October 26, 2010, it has received final approvals from the TSX Venture Exchange and the relevant Chinese authorities with respect to the closing of the non-brokered private placement subscribed to by Tongling Nonferrous Metals Group Holdings Co. Ltd. (“Tongling”).
Pursuant to the private placement, Tongling has purchased 31,386,224 units of the Company at a price of $0.5735 per unit for gross proceeds of $18,000,000 and now holds a 36.5% equity position in Canada Zinc Metals. Each unit consists of one common share and one half of a common share purchase warrant. Each whole warrant entitles Tongling to purchase, at any time within 24 months from closing, one common share of the Company at a price of $0.675 during the first year and at a price of $0.775 during the second year. These units are subject to a hold period expiring on March 17, 2011.
The proceeds of the private placement will be used primarily to fund further exploration and advancement of the Company’s Akie zinc-lead property.
“Along with the Akie property, Canada Zinc Metals’ significant prospective land package in the Kechika Trough represents a potential long-term district development opportunity”, commented Mr. Li Dongqing, Vice-President and Chief Engineer of Tongling. “We look forward to continuing to build our relationship with the Company.”
Tongling Nonferrous Metals Group Holdings Co. Ltd., based in Tongling, Anhui, is a state-owned holding company, and one of China's largest copper smelting companies. Tongling’s principal activities are exploration, mining, ore processing, smelting & refining and products processing of copper, lead, zinc, gold, silver and other non-ferrous and rare metals.
Given the nature and size of the strategic investment, the Company has agreed to permit Tongling to appoint up to two nominees as members of the board of directors of Canada Zinc Metals for so long as Tongling maintains an interest of at least 20% of the outstanding common shares of the Company.
Subject to certain conditions, Tongling has agreed to vote its common shares of the Company in support of the board of directors recommended by the management of Canada Zinc Metals until the earlier of 3 years from the date of closing the private placement or the date that Tongling owns at least 50% of the outstanding common shares of the Company.
About the Akie Property
The Akie zinc-lead property is situated within the southern-most part (Kechika Trough) of the regionally extensive Paleozoic Selwyn Basin, one of the most prolific sedimentary basins in the world for the occurrence of SEDEX zinc-lead-silver and stratiform barite deposits.
Drilling on the Akie property by Inmet Mining Corporation during the period 1994 to 1996 and by Canada Zinc Metals since 2005 has identified a significant body of baritic-zinc-lead SEDEX mineralization (Cardiac Creek deposit). The deposit is hosted by variably siliceous, fine grained clastic rocks of the Middle to Late Devonian ‘Gunsteel’ formation. The Company has outlined a NI 43-101 compliant inferred resource of 23.6 million tonnes grading 7.6% zinc, 1.5% lead and 13.0 g/t silver (at a 5% zinc cut off grade).
Two similar deposits, Cirque and Cirque South Cirque, located some 20 km northwest of Akie and owned under a joint venture by Teck Resources and Korea Zinc, are also hosted by Gunsteel rocks and have a combined geologic inventory in excess of 50 million tonnes (not 43-101 compliant) grading approximately 10% combined zinc + lead.
In addition to the Akie property, Canada Zinc Metals Corp. controls a large contiguous group of claims which comprise the Kechika Regional project. These claims are underlain by geology identical to that on the Akie property (Cardiac Creek deposit) and Cirque. This project includes the 100% owned Mt. Alcock property, which has yielded a historic drill intercept of 8.8 metres grading 9.3% zinc+lead, numerous zinc-lead-barite occurrences, and several regional base metal anomalies.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.
ON BEHALF OF THE BOARD OF DIRECTORS
CANADA ZINC METALS CORP.
PEEYUSH VARSHNEY, LL.B
CEO & CHAIRMAN