-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B/++gS0Z5wxA8+JkUwT6q+jgJEjFh7Bs1jD/vyPpZTJD2oRt5H4710N926rMzurx Zos6ApO2ghdhZUOyXjzwSA== 0000910569-08-000016.txt : 20080516 0000910569-08-000016.hdr.sgml : 20080516 20080516134802 ACCESSION NUMBER: 0000910569-08-000016 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20080515 FILED AS OF DATE: 20080516 DATE AS OF CHANGE: 20080516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANADIAN ZINC CORP CENTRAL INDEX KEY: 0000910569 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22216 FILM NUMBER: 08841479 BUSINESS ADDRESS: STREET 1: 650 WEST GEORGIA STREET STREET 2: SUITE 1710, PO BOX 11644 CITY: VANCOUVER STATE: A1 ZIP: V6B 4N9 BUSINESS PHONE: 6046882001 MAIL ADDRESS: STREET 1: 650 WEST GEORGIA STREET STREET 2: SUITE 1710, PO BOX 11644 CITY: VANCOUVER STATE: A1 ZIP: V6B 4N9 FORMER COMPANY: FORMER CONFORMED NAME: SAN ANDREAS RESOURCES CORP DATE OF NAME CHANGE: 19930812 6-K 1 form6-k_q1mar3108.htm FORM 6K Q1 MARCH 31-08 form6-k_q1mar3108.htm


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549


FORM 6-K

 
Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

 For: the period ended May 15, 2008

COMMISSION FILE NUMBER: 000-22216




Suite 1710 - 650 West Georgia Street
Vancouver, British Columbia
Canada V6B 4N9


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-For Form 40-F

Form 20-F þ
 
Form 40-F ¨


Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes¨
 
No  þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ¨
 
No þ

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 13g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨
 
No þ
If ‘Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 
 

 


 




Financial Statements
(Unaudited)
(A Development Stage Company)
March 31, 2008


Index

Balance Sheets
Statements of Operations, Comprehensive Income and Deficit
Statements of Cash Flows
Statements of Shareholders’ Equity
Notes to Financial Statements


The Company’s auditors have not reviewed these financial statements for the period ended March 31, 2008.

 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Balance Sheets
(Prepared in accordance with Canadian generally accepted accounting principles)
(Unaudited)


(in thousands of Canadian dollars)
 
March 31,
   
December 31,
 
   
2008
   
2007
 
   
(unaudited)
   
(audited)
 
ASSETS
           
             
Current
           
Cash and cash equivalents
  $ 12,324     $ 6,919  
Short-term investments (Note 3)
    14,303       21,495  
Marketable securities (Note 4)
    87       100  
Account receivable (Note 5)
    942       -  
Other receivables and prepaid expenses
    75       172  
                 
Total Current Assets
    27,731       28,686  
                 
Resource interests (Note 5)
    37,926       37,797  
Plant and equipment (Note 6)
    769       448  
                 
Total Assets
  $ 66,426     $ 66,931  
                 
LIABILITIES
               
                 
Current
               
Accounts payable
  $ 260     $ 813  
Accrued liabilities
    183       441  
                 
Total Current Liabilities
    443       1,254  
                 
Asset retirement obligation (Note 7)
    1,249       1,228  
Future income tax
    3,621       3,621  
                 
Total Liabilities
    5,313       6,103  
Commitments (Notes 5 and 12)
               
                 
SHAREHOLDERS' EQUITY
               
                 
Share capital (Note 8)
    67,206       66,593  
                 
Contributed surplus (Note 9)
    7,739       7,844  
Accumulated other comprehensive income
    -       -  
Deficit
    (13,832 )     (13,609 )
                 
Total Shareholders’ Equity
    61,113       60,828  
                 
Total Liabilities and Shareholders’ Equity
  $ 66,426     $ 66,931  
Subsequent event (Note 13)
               
                 
Approved by the Board of Directors:
           
 
 “John F. Kearney”
 
“Robert Gayton”
 
Director
 
Director

See accompanying notes to the interim financial statements. 
 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Statements of Operations, Comprehensive Income and Deficit
(Prepared in accordance with Canadian generally accepted accounting principles)
(Unaudited)
 


 
(in thousands of Canadian dollars except share and per share amounts)
 
Three Months ended March 31, 2008
   
Three Months ended March 31, 2007
 
Income
Interest Income
  $ 296     $ 320  
Expenses
               
Amortization
    5       1  
Listing and regulatory fees
    19       34  
Management and directors fees
    147       64  
Office and general
    77       104  
Professional fees
    22       93  
Project evaluation
    1       39  
Shareholder and investor communications
    67       49  
Stock based compensation
    168       -  
Write down on marketable securities (Note 4)
    13       -  
      519       384  
Net loss for the period
    (223 )     (64 )
                 
Other comprehensive income/(loss)
    -       -  
                 
Comprehensive loss
  $ (223 )   $ (64 )
                 
                 
                 
Deficit, beginning of period
  $ (13,609 )   $ (12,689 )
                 
Net loss
    (223 )     (64 )
                 
Deficit, end of period
  $ (13,832 )   $ (12,753 )
                 
Loss per share - basic and diluted
  $ (0.00 )   $ (0.00 )
Weighted average number of common  shares outstanding – basic and diluted
    120,612,586       107,670,212  

See accompanying notes to the interim financial statements. 
 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Statements of Cash Flows
(Prepared in accordance with Canadian generally accepted accounting principles)
(Unaudited)
 

(in thousands of Canadian dollars)
 
Three
Months ended
March 31,
2008
   
Three
Months ended
 March 31,
2007
 
             
Operating Activities
           
Loss for the period
  $ (223 )   $ (64 )
Adjustment for items not involving cash:
               
- Amortization
    5       1  
- Write down on marketable securities
    13       -  
- Stock based compensation
    168       -  
Change in non-cash working capital items:
               
- Other receivables and prepaid expenses
    97       98  
- Accounts payable and accrued liabilities
    (308 )     158  
      (248 )     193  
                 
Financing Activities
               
Capital stock issued
    340       104  
                 
Investing Activities
               
Purchase of equipment
    (367 )     (26 )
Resource interest and plant and equipment obligations
    (504 )     -  
Short-term investments
    7,192       5,576  
Reclamation security deposits
    -       (30 )
Deferred exploration and development costs, excluding amortization and accretion
    (1,008 )     (1,763 )
                 
      5,313       3,757  
                 
Increase in cash and cash equivalents
    5,405       4,053  
                 
Cash and cash equivalents, beginning of period
    6,919       13,608  
                 
Cash and cash equivalents, end of period
  $ 12,324     $ 17,662  
                 
Supplemental Information:
               
Interest paid
  $ -     $ -  
Income taxes paid
  $ -     $ -  

See accompanying notes to the interim financial statements. 
 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Statements of Shareholders’ Equity
(Prepared in accordance with Canadian generally accepted accounting principles)
(Unaudited)
 

 
(in thousands of Canadian dollars except for share amounts)
Common shares
 
Contributed
       
Shares
Amount
 
Surplus
 
Deficit
 
Total
                   
Balance, December 31, 2006
107,590,212
$
59,994
$
6,479
$
(12,689)
$
53,784
Exercise of options at $0.23 per share
450,000
 
131
 
(27)
 
-
 
104
Future income tax effect of flow through shares
-
 
(2,487)
 
-
 
-
 
(2,487)
Exercise of options at $0.89 per share
100,000
 
153
 
(64)
 
-
 
89
Exercise of warrants between $0.72 - $0.93 per share
302,738
 
394
 
(174)
 
-
 
220
Issue of shares at $0.85 per unit
11,765,000
 
9,766
 
-
 
-
 
9,766
Share purchase warrants
-
 
(1,366)
 
1,366
 
-
 
-
Exercise of warrants at $0.72 per share
6,012
 
8
 
(3)
 
-
 
5
Stock-based compensation
-
 
-
 
267
 
-
 
267
Net loss for the year
-
 
-
 
-
 
(920)
 
(920)
Balance, December 31, 2007
120,213,962
$
66,593
$
7,844
$
(13,609)
$
60,828
Exercise of warrants at $0.72 per share
471,101
 
613
 
(273)
 
-
 
340
Stock-based compensation
-
 
-
 
168
 
-
 
168
Net loss for the period
-
 
-
 
-
 
(223)
 
(223)
Balance, March 31, 2008
120,685,063
$
67,206
$
7,739
$
(13,832)
$
61,113

See accompanying notes to the interim financial statements. 
 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Notes to Financial Statements
March 31, 2008
(Tabular amounts are in thousands of Canadian dollars, except for shares, price per share and per share amounts)
(Unaudited)

1.  
Basis of Presentation

These unaudited financial statements have been prepared in accordance with Canadian generally accepting accounting principles (“Canadian GAAP”) for interim financial information and follow the same accounting policies and methods of application as the most recent audited financial statements of the Company for the year ended December 31, 2007. These interim financial statements do not include all the information and note disclosures required by Canadian GAAP for annual financial statements and therefore should be read in conjunction with the Company's audited financial statements and the notes thereto for the year ended December 31, 2007. In management's opinion, all adjustments considered necessary for fair presentation have been included in these financial statements.  Interim results are not necessarily indicative of the results expected for the fiscal year.

2.           Changes in Accounting Policy

On January 1, 2008, the Company adopted the recommendations included in the following Sections of the Canadian Institute of Chartered Accountants Handbook: Section 1535, “Capital Disclosures,” and Section 3862, “Financial Instruments - Disclosures.”

(a)  
Section 1535, “Capital Disclosures”

This Section establishes standards for disclosing information about a company’s capital and how it is managed. Under this standard the Company will be required to disclose the following, based on the information provided internally to the Company’s key management personnel:

(i)       qualitative information about its objectives, policies and processes for managing capital;
(ii)       summary quantitative data about what it manages as capital;
 
 
(iii)
whether during the period it complied with any externally imposed capital requirements to which the Company is subject; and
 
(iv)
when the Company has not complied with such externally imposed capital requirements (if any), the consequences of such non-compliance.

As required under Section 1535, the Company’s objectives, policies and processes for managing capital are as follows:

The Company manages its common shares, options and warrants as capital. As the Company is in the exploration and development stage, its principal source of funds for its operations is from the issuance of common shares. The issuance of common shares requires approval of the Board of Directors. It is the Company’s objective to safeguard its ability to continue as a going concern, so that it can continue to explore and develop its Prairie Creek project for the benefit of its stakeholders. The Company primarily uses stock options to retain and provide future incentives to key employees and members of the management team. The granting of stock options is primarily determined by the Compensation Committee of the Board of Directors.


 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Notes to Financial Statements
March 31, 2008
(Tabular amounts are in thousands of Canadian dollars, except for shares, price per share and per share amounts)
(Unaudited)

2.           Changes in Accounting Policy (continued)

(b)  
Section 3862, “Financial Instruments – Disclosure”

The new disclosure standard requires companies to provide disclosure of quantitative and qualitative information in their financial statements that enable users to evaluate (a) the significance of financial instruments for the company’s financial position and performance; and (b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and management’s objectives, policies and procedures for managing such risks. Companies will be required to disclose the measurement basis or bases used, and the criteria used to determine classification for different types of instruments.

The Section requires specific disclosures to be made, including the criteria for:
         
 
(i)  
(ii)  
(iii)  
designating financial assets and liabilities as held for trading;
designating financial assets as available-for-sale; and
determining when impairment is recorded against the related financial asset or when an allowance account is used.

See Note 11 for disclosures related to financial instruments.

3.           Short-term Investments

Short-term investments, which consist primarily of investments in Bankers Acceptances and Guaranteed Investment Certificates, are investments with maturities of more than three months and less than one year when purchased.  As at March 31, 2008, short-term investments were valued at $14.3 million, earning income at rates ranging from 3.38% to 4.5% (December 31, 2007 - $21.5 million, earning income at rates ranging from 3.4% to 5.75%). The Company has designated its short-term investments as held for trading assets. Interest income and changes in market value on short-term investments are recorded in interest income in the Statement of Operations; accrued interest earned but not yet received is included in other receivables on the balance sheet. The market value of these assets is based upon quoted market values and the recorded amounts, at March 31, 2008, approximate fair value for these investments.

4.           Marketable Securities

On December 21, 2006, the Company participated in a private placement and subscribed to 5,000,000 Units of Ste. Genevieve Resources Ltd. (“SGV”), a company listed on the Canadian Trading and Quotation System Inc. (“CNQ”), at $0.05 per Unit for a total of $250,000. Each Unit consisted of one common share and one common share purchase warrant entitling the holder to acquire an additional common share at a price exercisable at $0.06 on or before December 29, 2008.  On March 27, 2008, Ascendant Copper Corporation (“Ascendant”), a company listed on the Toronto Stock Exchange, announced that it had completed its acquisition of all of the issued and outstanding common shares in the capital of SGV in exchange for approximately 31,632,582 Ascendant common shares. In addition, Ascendant assumed the obligations of SGV arising under its outstanding warrants by issuing a replacement warrant of Ascendant for each 5.5422556 SGV warrants, subject to adjustment and on the terms set out in the arrangement agreement between the parties. Canadian Zinc Corporation has estimated that, based upon 199,521,201 SGV common shares previously issued, it now holds approximately 792,712 Ascendant Shares and approximately 902,160 Ascendant warrants.

The market value of the Ascendant shares held by the Company, as at March 31, 2008, was approximately $87,000 (December 31, 2007 - $100,000). The loss in market value has been recorded in the Statement of Operations in accordance with the Company’s designation of the marketable securities as held for trading assets.
 

 
5.  
Resource Interests

The Company’s resource interests comprise the Prairie Creek Mine Property:
 
   
March 31,
2008
   
December 31, 2007
 
Acquisition costs:
           
- mining lands
  $ 3,158     $ 3,158  
- plant and mill
    500       500  
      3,658       3,658  
Reclamation security deposits
    425       425  
Increase from asset retirement obligations
    623       635  
Exploration and development costs (see table below)
    33,220       33,079  
    $ 37,926     $ 37,797  

Exploration and development costs incurred in the three months ended March 31, 2008, March 31, 2007, and the year ended December 31, 2007, are detailed below:
   
Three Months ended March 31, 2008
   
Three Months ended March 31, 2007
   
Year ended December
31, 2007
 
Exploration and development costs
                 
Assaying and metallurgical studies
  $ 25     $ 106     $ 307  
Camp operation and project development
    476       568       2,804  
Drilling and underground development
    171       814       6,076  
Insurance, lease rental
    13       7       102  
Permitting and environmental
    226       120       694  
Transportation and travel
    97       148       847  
      1,008       1,763       10,830  
                         
Drilling and underground development credit
    (942 )     -       -  
                         
Amortization – asset retirement obligation
    13       32       128  
Amortization – mining plant and equipment
    41       34       143  
Asset retirement accretion
    21       19       77  
      75       85       348  
Total Exploration and development costs, for the period
   
                               141
                                1,848                               11,178  
    Exploration and development costs, beginning of period
    33,079       21,901       21,901  
    Exploration and development costs, end of period
  $ 33,220     $ 23,749     $ 33,079  
 
 

5.           Resource Interests (continued)

The Company conducted an underground drilling program at the Prairie Creek Mine that commenced in 2006 and continued through to the end of 2007. During the three months ended March 31, 2008, the Company incurred further expenditures relating to the demobilization of the contractor’s equipment and finalization of the work program. Following completion of the contract, a reconciliation of the project costs was performed which resulted in a credit of $942,000 which was paid to the Company subsequent to March 31, 2008.

The Company holds a 100% interest in the Prairie Creek Mine property and plant and equipment located in the Northwest Territories, Canada.

In 1996, the Company concluded a Co-operation Agreement (the “Agreement”) with the Nahanni Butte Dene Band (“Nahanni”), part of the Dehcho First Nations.  In return for co-operation and assistance undertakings given by Nahanni towards the development of the Prairie Creek Project, the Company granted the following net profit interest and purchase option to Nahanni:

(i)  
A 5% annual net profits, before taxation, interest in the Prairie Creek Project, payable following the generation of profits after taxation equivalent to the aggregate cost of bringing the Prairie Creek Project into production and establishing the access road; and

 
(ii)  
An option to purchase either a 10% or a 15% interest in the Prairie Creek Project at any time prior to the expiry of three months following permitting for the Project, for the cash payment of either $6 million or $9 million, subject to price adjustment for exploration expenditure and inflation, respectively.

In October 2003 Nahanni informed the Company that Nahanni considers the Agreement terminated.  Such termination is not in accordance with the provisions of the Agreement.  The Company is currently re-negotiating the Agreement with Nahanni.

The Company holds various licences and permits required in order to maintain and perform current activities at the Prairie Creek Mine site. A summary of permits and licences granted to the Company subsequent to December 31, 2006 is noted below.

On April 10, 2007, the Mackenzie Valley Land and Water Board issued a Land Use Permit for use of the road which connects the Prairie Creek Mine with the Liard Highway. The Land Use Permit (MV2003F0028) is valid for five years to April 10, 2012.  Under the terms of the Permit, a security deposit in the amount of $100,000 is payable prior to the first use of the road.

On March 20, 2008, the Mackenzie Valley Land and Water Board issued a Type B Water Licence (MV2007L8-0026) to permit remediation of a portion of the winter road. The Water Licence is valid for five years to March 20, 2013.



 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Notes to Financial Statements
March 31, 2008
(Tabular amounts are in thousands of Canadian dollars, except for shares, price per share and per share amounts)
(Unaudited)

6.  
Plant and Equipment

 
March 31, 2008
 
 
Cost
Accumulated
Amortization
Net Book
Value
 
Mining equipment
$  1,044
$  388
$  656
Pilot plant
108
84
24
Furniture, fixtures & equipment
123
83
40
Leasehold improvements
60
11
49
 
$  1,335
$  566
$  769

 
December 31, 2007
 
 
Cost
Accumulated
Amortization
Net Book
Value
 
Mining equipment
$  693
$  349
$  344
Pilot plant
108
82
26
Furniture, fixtures & equipment
107
81
26
Leasehold improvements
60
8
52
 
$  968
$  520
$  448


7.  
Asset Retirement Obligation

The fair value of the asset retirement obligation is based on information currently available, including the Company’s obligations to undertake site reclamation and remediation in connection with its Prairie Creek Mine Site infrastructure and development and applicable regulations. However, the ultimate amount of the asset retirement obligation is uncertain.

The total undiscounted amount of the estimated cash flows required to settle the Company’s reclamation and remediation obligations, as at March 31, 2008, is estimated to be $2.5 million (December 31, 2007 - $2.5 million). While it is anticipated that some expenditures will be incurred during the life of the operation to which the obligations relate (should mining activity commence), a significant component of this expenditure will only be incurred at the end of the mine life.

The fair value of the estimated cash flows has been estimated at $1.249 million as at March 31, 2008 (December 31, 2007 - $1.228 million). In determining the fair value of the asset retirement obligation, the Company has assumed a long-term inflation rate of 2.5%, a credit-adjusted risk-free discount rate of 6.5% and a weighted average useful life of production facilities and equipment of ten years. Elements of uncertainty in estimating this amount include changes in the projected mine life, reclamation expenditures incurred during ongoing operations and reclamation and remediation requirements and alternatives.


 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Notes to Financial Statements
March 31, 2008
(Tabular amounts are in thousands of Canadian dollars, except for shares, price per share and per share amounts)
(Unaudited)

7.           Asset Retirement Obligation (continued)

A summary of the Company’s provision for asset retirement obligation and reclamation is presented below:

   
Three months ended March 31, 2008
 
Year ended December 31, 2007
Balance – beginning of period
$
1,228
$
1,380
Reclamation expenditures
 
-
 
(246)
Accretion
 
21
 
77
Change in estimates
 
-
 
17
Balance – end of year
$
1,249
$
1,228


8.           Share Capital

Authorized: Unlimited common shares with no par value (December 31, 2007 – unlimited).

Issued and outstanding: 120,685,063 common shares (December 31, 2007 – 120,213,962).

During the three months ended March 31, 2008, 471,101 warrants were exercised at a price of $0.72 per common share for proceeds of $340,000.

9.           Stock Options, Warrants and Contributed Surplus

(a)           Stock Options

The Company has an incentive stock option plan in place under which it is authorized to grant stock options to directors, executive officers, employees and consultants. At March 31, 2008, the Company was allowed to grant up to 10% of the issued share capital of the Company as stock options. Stock options are exercisable once they have vested under the terms of the grant. A summary of the Company’s options at March 31, 2008 and the changes for the three month period then ended is presented below:

 
Three months ended March 31,
 
2008
 
2007
 
Number of Options
 
 
Weighted Average
Exercise Price
 
 
 
Number of Options
 
 
Weighted Average
Exercise Price
Outstanding, beginning of period
4,865,000
$
0.73
 
4,780,000
$
0.66
Exercised
-
 
-
 
(450,000)
 
0.23
Cancelled
(50,000)
 
0.94
 
-
 
-
Outstanding, end of period
4,815,000
$
0.73
 
4,330,000
$
0.70
 

(a)           Stock Options (continued)

As at March 31, 2008, the Company has outstanding stock options to purchase an aggregate 4,815,000 common shares as follows:

Options Outstanding
 
Options Exercisable
Number
 
Weighted Average Exercise Price
Expiry Date
 
Number
 
Weighted Average Exercise Price
2,860,000
$
0.60
January 14, 2010
 
2,860,000
$
0.60
110,000
 
0.89
June 27, 2011
 
110,000
 
0.89
1,200,000
 
0.90
December 13, 2011
 
1,200,000
 
0.90
645,000
 
0.94
October 15, 2012
 
545,000
 
0.94
4,815,000
$
0.73
   
4,715,000
$
0.72

No stock options were granted in the three month period ended March 31, 2008.  The Company incurred $168,000 of stock-based compensation expense during the three months ended March 31, 2008, related to the vesting of stock options granted in prior periods.

(b)           Warrants
 
A summary of the Company’s warrants issued and outstanding as at March 31, 2008 and for the three month period then ended is presented below:

 
Three months ended March 31,
     
 
2008
 
2007
     
   
Number of Warrants
 
Weighted Average
Exercise Price
 
Number of Warrants
 
Weighted Average
Exercise Price
 
 
Outstanding, beginning of period
17,569,243
$
1.09
 
11,995,493
$
1.02
 
 
Exercised
(471,101)
 
0.72
 
-
 
-
 
 
Expired
(7,383,130)
 
1.00
 
-
 
-
 
 
Outstanding,
end of period
9,715,012
$
1.17
 
11,995,493
$
1.02
 


 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Notes to Financial Statements
March 31, 2008
(Tabular amounts are in thousands of Canadian dollars, except for shares, price per share and per share amounts)
(Unaudited)

9.           Stock Options, Warrants and Contributed Surplus (continued)

(b)           Warrants (continued)

As at March 31, 2008, the Company has outstanding warrants to purchase an aggregate 9,715,012 common shares as follows:

Balance of Warrants Outstanding at March 31, 2008
Exercise Price per Warrant
Expiry Date
3,459,179
$1.15
November 23, 2008
373,333
$0.93
November 23, 2008
5,882,500
$1.20
July 23, 2009
9,715,012
   

No warrants were issued in the three month period ended March 31, 2008.

(c)           Contributed Surplus

A summary of the contributed surplus account is presented below:
 
   
 
Options
 
 
Warrants
 
Unexercised Options and Warrants
 
 
Total
                 
Balance, December 31, 2007
$
2,142
$
5,550
$
152
$
7,844
Stock-based compensation
 
168
 
-
 
-
 
168
Options cancelled
 
(34)
 
-
 
34
 
-
Warrants expired
     
(2,613)
 
2,613
 
-
Broker warrants exercised
 
-
 
(273)
 
-
 
(273)
Balance, March 31, 2008
$
2,276
$
2,664
$
2,799
$
7,739



 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Notes to Financial Statements
March 31, 2008
(Tabular amounts are in thousands of Canadian dollars, except for shares, price per share and per share amounts)
(Unaudited)

10.           Related Party Transactions

The Company incurred the following expenses to directors and corporations controlled by directors of the Company:

   
Three months ended March 31, 2008
 
Three months ended March 31, 2007
         
Executive and director compensation
$
103
$
108
Rent
 
3
 
3
 
$
106
$
111

All transactions with related parties were within the normal course of business. These transactions have been recorded at amounts agreed to by the transacting parties. At March 31, 2008, $19,000 relating to amounts owing to related parties was included in accounts payable and accrued liabilities (December 31, 2007 - $114,000)

11.           Financial Instruments

(a)  
Fair Values:  As at March 31, 2008, the recorded amounts for cash and cash equivalents, other receivables and prepaid expenses, accounts payable and accrued liabilities approximate their fair value due to their short-term nature. The Company has designated its cash and cash equivalents and short-term investments as held for trading assets.

(b)  
Interest rate risk:  Included in the loss for the period in these financial statements is interest income on the Company’s cash and cash equivalents and short-term investments. If interest rates throughout the period had been 100 basis points (1%) lower (higher) then net loss would have been $69,000 higher ($69,000 lower). The Company does not have any debt obligations which expose it to interest rate risk. As described below, the Company places its cash and cash equivalents and short-term investments with high credit quality financial institutions which have invested the funds in AAA debt instruments.

(c)  
Credit risk:  The Company does not currently generate any revenues from sales to customers nor does it hold derivative type instruments that would require a counterparty to fulfil a contractual obligation. The Company has never held any asset-backed paper instruments.

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and short-term investments. The Company places its cash and cash equivalents and short-term investments (which consist of Bankers’ Acceptances and Guaranteed Investment Certificates) with high credit quality financial institutions which have invested the funds in AAA debt instruments.


 
 

 
CANADIAN ZINC CORPORATION
(a development stage company)
Notes to Financial Statements
March 31, 2008
(Tabular amounts are in thousands of Canadian dollars, except for shares, price per share and per share amounts)
(Unaudited)

11.           Financial Instruments (continued)

(d)  
Liquidity risk:  Liquidity risk encompasses the risk that the Company cannot meet its financial obligations. The Company manages liquidity risk by maintaining sufficient cash and cash equivalent balances. Liquidity requirements are managed based on expected cash flow to ensure that there is sufficient capital in order to meet short-term obligations. As at March 31, 2008, the Company had positive working capital of $27.3 million. Accordingly, the Company is able to meet its current obligations and has minimal liquidity risk. However, it is likely that the Company will require additional funding in the future in order to complete the development of the Prairie Creek Mine site and bring the mine into production. Accordingly, there is a risk that the Company may not be able to secure adequate funding on reasonable terms at that future date.

(e)  
Currency risk:  As at March 31, 2008, the Company has no cash and cash equivalents or short-term investments in any currency other than the Canadian dollar, which is the Company’s functional currency. In addition, the Company currently operates entirely within Canada.

(f)  
Commodity price risk:  The Company’s ability to raise capital to fund exploration or development activities is subject to risks associated with fluctuations in the market prices of zinc, lead and silver.

12.           Commitments

The Company has entered into operating lease agreements for office space and equipment. These agreements require the Company to make the following lease payments:

   
Office Leases
 
Office equipment
 
Total
9 months ending December 31, 2008
$
91
$
5
$
96
Year ending December 31, 2009
 
129
 
7
 
136
Year ending December 31, 2010
 
135
 
-
 
135
Year ending December 31, 2011
 
133
 
-
 
133
Year ending December 31, 2012
 
78
 
-
 
78
 
$
566
$
12
$
578
             

13.           Subsequent Event

Subsequent to March 31, 2008, the Company obtained TSX approval to conduct a normal course issuer bid (the “Bid”) pursuant to which the Company may purchase up to a maximum of 5,000,000 common shares in the capital of the Company. The Bid may be carried out from May 13, 2008 for a period of up to one year. Pursuant to TSX policies, daily purchases made by the Company under the Bid may not exceed 44,876 common shares, subject to certain prescribed exceptions. All common shares purchased pursuant to the Bid will be cancelled and returned to treasury.

 
 

 






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
     
 
CANADIAN ZINC CORPORATION
     
Date May 15, 2008
By:
/s/ John F. Kearney            
 
 John F. Kearney
 
 President and Chairman


 
 

 

EX-31 2 ex_31ceocert.htm EXHIBIT 31 CEO CERTIFICATE ex_31ceocert.htm


 

FORM 52-109F2
CERTIFICATE OF INTERIM FILINGS

I, John F. Kearney, President and Chief Executive Officer of Canadian Zinc Corporation, certify that:

1.
I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Canadian Zinc Corporation, (the issuer) for the interim period ending March 31, 2008;

2.
Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;

3.
Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings;

4.
The issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the issuer, and we have:

 
(a)
designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and

 
(b)
designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP; and

5.
I have caused the issuer to disclose in the interim MD&A any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent interim period that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.


Date:  May 14, 2008

“John F. Kearney”                                                                
John F. Kearney
President and Chief Executive Officer


EX-32 3 ex_32cfocert.htm EXHIBIT 32 CFO CERTIFICATE ex_32cfocert.htm


 

CERTIFICATE OF INTERIM FILINGS


I, Martin Rip, Chief Financial Officer of Canadian Zinc Corporation, certify that:

1.
I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Canadian Zinc Corporation, (the issuer) for the interim period ending March 31, 2008;

2.
Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;

3.
Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings;

4.
The issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the issuer, and we have:

 
(a)
designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and

 
(b)
designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP; and

5.  
I have caused the issuer to disclose in the interim MD&A any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent interim period that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.


Date:  May 14, 2008
 
“Martin Rip”                                           
Martin Rip
Chief Financial Officer


EX-99.1 4 ex_99-1mda.htm EXHIBIT 99.1 MANAGEMENT DISCUSSION & ANALYSIS ex_99-1mda.htm



 



 

MANAGEMENT’S DISCUSSION AND ANALYSIS
May 14, 2008

INTRODUCTION

This Management’s Discussion and Analysis (“MD&A”), dated May 14, 2008, focuses upon the activities, results of operations, and liquidity and capital resources of Canadian Zinc Corporation (the “Company” or “Canadian Zinc”) for the three months ended March 31, 2008. In order to better understand the MD&A, it should be read in conjunction with the unaudited financial statements and notes thereto for the three months ended March 31, 2008 and the audited financial statements, notes and MD&A for the year ended December 31, 2007.

The Company’s financial statements are prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). The significant accounting policies are outlined in Notes 2 and 3 to the audited financial statements of the Company for the year ended December 31, 2007. These accounting policies have been applied consistently for the three months ended March 31, 2008.


ADDITIONAL INFORMATION

Additional information about the Company is available under the Company’s profile on SEDAR at www.sedar.com and on the Company’s website at www.canadianzinc.com. Information is also available through the EDGAR system accessible through the United States Securities and Exchange Commission’s website www.sec.gov.

Readers should be aware that historical results are not necessarily indicative of future performance; actual results will vary from estimates and variances may be significant.

The Company reports its financial information in Canadian dollars and all monetary amounts set forth herein are expressed in Canadian dollars unless specifically stated otherwise.

Alan Taylor, P. Geo., Chief Operating Officer, Vice President Exploration and Director of Canadian Zinc Corporation, is the Company’s Qualified Person for the purposes of National Instrument 43-101 and has approved the technical disclosures in this MD&A.



 
1

 

INFORMATION ABOUT FORWARD-LOOKING STATEMENTS

This MD&A contains forward-looking statements, such as estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Words such as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”, or similar expressions, are intended to identify forward-looking statements. Such forward-looking statements are made pursuant to the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995.

Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties.  Actual results relating to, among other things, mineral reserves, mineral resources, results of exploration, reclamation and other post-closure costs, capital costs, mine production costs, the timing of exploration, development and mining activities and the Company’s financial condition and prospects, could differ materially from those currently anticipated in such statements by reason of factors such as changes in general economic conditions and conditions in the financial markets, changes in demand and prices for the minerals the Company expects to produce, delays in obtaining permits, litigation, legislative, environmental and other judicial, regulatory, political and competitive developments in areas in which the Company operates, technological and operational difficulties encountered in connection with the Company’s activities, labour relations matters, costs and changing foreign exchange rates and other matters discussed under “Management’s Discussion and Analysis of Liquidity and Capital Resources and Review of Financial Results.”

Other delays in factors that may cause actual results to vary materially include, but are not limited to, the receipt of permits or approvals, changes in commodity and power prices, changes in interest and currency exchange rates, geological and metallurgical assumptions (including the size, grade and  recoverability of mineral resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with  specifications or expectations), cost escalation, unavailability of materials and equipment, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters, political risk, social unrest, and changes in general economic conditions or conditions in the financial markets.

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that mineral resources will be converted into mineral reserves. The Company does not currently hold a permit for the operation of the Prairie Creek Mine.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company’s forward-looking statements. Further information regarding these and other factors which may cause results to differ materially from those projected in forward-looking statements are included in the filings by the Company with securities regulatory authorities. The Company does not undertake to update any forward-looking statements that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.



 
2

 

OVERVIEW AND OUTLOOK

Canadian Zinc Corporation is a development stage company listed on the Toronto Stock Exchange under the symbol “CZN” and in the United States on the OTCBB under the symbol “CZICF” and is engaged in the business of exploration and development of natural resource properties.

The Company’s principal focus is its efforts to advance the Prairie Creek Mine, a zinc/lead/silver property located in the Northwest Territories of Canada, towards production. The Prairie Creek Mine is partially developed with an existing 1,000 tonne per day mill and related infrastructure. In 2006 and 2007, the Company carried out major programs at Prairie Creek including driving a new internal decline approximately 600 metres long which enabled a significant underground exploration and infill drilling program to occur. A total of $18.7 million was invested in Prairie Creek in 2006 and 2007.

A Technical Report (the “Report”) dated October 12, 2007, was prepared by MineFill Services Inc. (David Stone and Stephen Godden – Qualified Independent Persons), to National Instrument 43-101 standards, following the results of part of the 2007 drilling program. The Report indicates that the Prairie Creek Property hosts total Measured and Indicated Resources of 5,840,329 tonnes grading 10.71% zinc, 9.90% lead, 161.12 grams silver per tonne and 0.326% copper. In addition, the Report confirms a large Inferred Resource of 5,541,576 tonnes grading 13.53% zinc, 11.43% lead, 215 grams per tonne silver and 0.514% copper and additional exploration potential.

The Report has been filed on SEDAR and may be viewed under the Company’s profile at www.sedar.com, or on the Company’s website at www.canadianzinc.com.

The Measured and Indicated Resource is now capable of supporting a mine life in excess of ten years at the planned 1,000 – 1,300 tonnes per day production rate. The Company is now examining the various operating alternatives outlined in the 2001 preliminary Scoping Study and is working towards updating and converting the Scoping Study into a Pre-Feasibility study utilizing the updated Technical Report. The 2001 Scoping Study is now considered to be out of date and should not be relied upon. The Company anticipates that the capital costs to place the Prairie Creek Mine into production will be significantly greater than estimated in the Scoping Study. The indicated capital costs will be re-estimated in the Pre-Feasibility study, which is being undertaken by SNC-Lavalin Inc., and is scheduled to be completed later in 2008.

During 2007, and throughout the first quarter of 2008, the Company was actively engaged in permitting activities. In April 2007, a Land Use Permit for winter use of the road which connects the Prairie Creek mine with the Liard Highway was obtained from the Mackenzie Valley Land and Water Board. Upon commencement of rehabilitation work, the Company was advised that a Class B Water Licence was required in order to complete the road rehabilitation work along the Prairie Creek stream-bed. Accordingly, the Company applied for a Type B water licence in June 2007 and this water licence was issued on March 20, 2008.

A preliminary budget of $7.5 million has been approved for the Prairie Creek project for 2008, which is in addition to the regular, ongoing costs of maintaining the Prairie Creek site. Planned programs include completion of the Pre-Feasibility Study, ongoing permitting activities, further engineering and rehabilitation work on the road to the mine Site and ongoing exploration.

The Company’s main focus is to continue permitting activities in order to advance the project towards commercial production. The Company plans to apply for the Land Use Permit and Water Licence for the commercial operation of the Prairie Creek Mine once the Project Description Report can be finalized for the application submittal. Originally the Company intended to file this application during 2007. However, this timeline was delayed as a result of the Company updating a detailed Mine Plan based on incorporating all the Phase 1 and 2 underground drilling results and the unexpected delays with regard to the road rehabilitation permitting process. The Company plans to submit the applications as soon as possible.

Since 2001 the Company has successfully obtained seven permits for the exploration and development of the Prairie Creek property from the Mackenzie Valley Land and Water Board, including two Type B Water Licences, four land Use Permits for exploration activities and underground development and a winter road permit.  Although the Company has experienced long delays in obtaining permits (and expects continuing delays and difficulties with its permitting activities), the Company has carried out extensive programs at Prairie Creek, in accordance with all regulatory requirements, and has built up a considerable knowledge base which will facilitate the application for the  mine operating permits.

The Prairie Creek project is located in the Mackenzie Mountains of the Northwest Territories, within the watershed of the South Nahanni River and in proximity to but outside of the Nahanni National Park Reserve. In August 2007, the Prime Minister of Canada visited Fort Simpson to announce the proposed expansion of Nahanni National Park Reserve. The Prime Minister announced that the Government of Canada had approved an Order in Council (PC-2007-1202 July 31, 2007), withdrawing certain lands for the proposed park expansion.  The area surrounding the Prairie Creek mine, containing approximately 367 square kilometres, is not included in the interim land withdrawal area and, as specified in Schedule 2 to the Order, is specifically excluded and exempted. Canadian Zinc has been assured by the Government of Canada and by Parks Canada that the final boundaries of the expanded park will not include the site of or the access road to the Prairie Creek mine and that in the proposed expansion of the Nahanni National Park Reserve the existing mining and access rights of Canadian Zinc to the Prairie Creek mine will be respected and protected.

Canadian Zinc welcomed the Government’s announcement and anticipates that the exclusion of the Prairie Creek mine from the proposed park expansion area will bring clarity to the differing land use policy objectives for the region. Canadian Zinc believes that the Prairie Creek mine and the expanded Nahanni National Park Reserve can co-exist and that, properly planned and managed, the expanded park will not interfere with the operation of the Prairie Creek mine and similarly that the operation of the mine will not adversely impact  upon the Park or its ecological integrity.

Canadian Zinc is in sound financial condition. At March 31, 2008 the Company had cash, cash equivalents and short term investments of $26.6 million compared to $28.4 million at December 31, 2007.


REVIEW OF FINANCIAL RESULTS

This review of the results of operations should be read in conjunction with the unaudited financial statements of the Company for the three months ended March 31, 2008 and other public disclosure documents of the Company.

For the three months ended March 31, 2008, the Company reported a net loss of $223,000 compared to a loss of $64,000 for the three months ended March 31, 2007. The increased loss in the 2008 period was mainly attributable to stock-based compensation expense of $168,000, relating to the vesting of stock options granted prior to the three month period ended March 31, 2008; there was no equivalent charge in the three month period ended March 31, 2007.


 
3

 

Exploration and Development Expense

The Company capitalizes all exploration and development costs relating to its resource interests. For the three months ended March 31, 2008, the Company incurred $1 million (three months ended March 31, 2007 - $1.8 million), excluding amortization and accretion charges capitalized, on exploration and development on the Prairie Creek Property. At March 31, 2008, a credit of $942,000, which was received subsequent to March 31, 2008, was recorded as payable to the Company following a reconciliation of the 2006/2007 drilling contract (see Note 5 to the unaudited financial statements as at March 31, 2008). The overall decrease in expenditures relates to the lower level of activities at the Prairie Creek Mine site following completion, in late 2007, of the exploration drilling programs which commenced in 2006.

During 2007, and throughout the first quarter of 2008, the Company was actively engaged in permitting activities. In April 2007, a Land Use Permit for winter use of the road which connects the Prairie Creek mine site with the Liard Highway was obtained from the Mackenzie Valley Land and Water Board.

In June 2007, the Company applied for a Type B Water Licence to undertake rehabilitation work along the Prairie Creek stream-bed. Following extensive community consultation which culminated in a Band Council Resolution adopted by the Nahanni Butte Dene Band on March 4, 2008, agreeing to give their support to the issuance of the Licence, the Water Licence was issued on March 20, 2008. It is valid for a period of five years. The Company has also sought authorization from the Department of Fisheries and Oceans (“DFO”) to carry out the work, which authorization remains outstanding as at the current date.

On June 29, 2007, the Company applied to Indian and Northern Affairs Canada for a quarrying permit to obtain rock to be used in the road rehabilitation. The quarry permit was issued on February 29, 2008.

Particulars of the deferred exploration and development costs are shown in Note 5 to the unaudited financial statements for the three months ended March 31, 2008.

Revenue and Interest Income

The Company is in the development stage and does not generate any cash flows from operations. To date, the Company has not earned any significant revenues other than interest income. Interest income for the three months ended March 31, 2008 was $296,000 compared to $320,000 for the comparative period ended March 31, 2007. The decrease is attributable to the overall decrease in amounts available for investment during the three months ended March 31, 2008 compared to the equivalent prior year period. There has also been a general decline in available market rates during the three months ended March 31, 2008.

Administrative Expenses

Administrative expenses for the three months ended March 31, 2008 were $333,000, compared to $385,000 (excluding stock based compensation and amortization) in the three months ended March 31, 2007. The decrease was largely attributable to the decreased need for external professional advice.


 
4

 

Other Non-Cash Expenses

In the three months ended March 31, 2008, the Company recorded an expense for stock-based compensation of $168,000 relating to the vesting of stock options granted to officers, employees and contractors during the year ended December 31, 2007. There was no equivalent charge for the three months ended March 31, 2007. This increase relates to the timing of options granted. The stock-based compensation expense value has been calculated using the Black-Scholes valuation method and assumptions as described in the ”Critical Accounting Estimates” section to this MD&A. The assumptions used in the calculation are described in Note 10(a) to the audited financial statements at December 31, 2007.

Amortization costs relating to mining plant and equipment of $41,000 (March 31, 2007 - $34,000) and the asset retirement obligation asset of $13,000 (March 31, 2007 - $32,000) were capitalized to resource interests.

The Company recorded a write-down on its marketable securities of $13,000 in the three months ended March 31, 2008 (March 31, 2007 - $nil). The marketable securities were designated as held for trading assets by the Company upon the adoption, on January 1, 2007, of new accounting standards relating to financial instruments as described in more detail in the “Critical Accounting Estimates” section to this MD&A. This write-down in value is based upon the market value of the shares at March 31, 2008. Further details relating to the Company’s marketable securities are included in Note 4 to the unaudited financial statements for the three months ended March 31, 2008.

Related Party Transactions

The Company’s related party transactions for the three months ended March 31, 2008 consisted of executive compensation paid to executives, directors and corporations controlled by directors in the amounts of $106,000. For the three months ended March 31, 2007 these expenditures were $111,000.

Income Taxes

The Company is currently not profitable and has a valuation allowance against its future income tax assets; accordingly, there was no current or future income tax expense recorded during the three months ended March 31, 2008 or 2007 respectively.


CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

The accounting policies outlined in Notes 2 and 3 of the Company’s audited financial statements for the year ended December 31, 2007, have been applied consistently for the three months ended March 31, 2008, with the exception of the initial adoption of new accounting standards as described below.

On January 1, 2008, the Company adopted the recommendations included in the following Sections of the Canadian Institute of Chartered Accountants Handbook: Section 1535, “Capital Disclosures” and Section 3862, “Financial Instruments – Disclosure.” These new accounting standards provide the requirements for the disclosure about the Company’s capital and how it is managed, and disclosure of quantitative and qualitative information in the financial statements to enable users to evaluate (a) the significance of financial instruments to the Company’s financial position and performance and (b) the nature and extent of risks arising from financial instruments to which the Company is exposed as well as management’s objectives, policies and procedures for managing such risks. Additional information on the adoption of these accounting standards can be found in Note 2 to the unaudited financial statements as at March 31, 2008.

CRITICAL ACCOUNTING ESTIMATES

The Company’s financial statements are prepared in accordance with GAAP in Canada and require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities (if any). The Company’s management makes assumptions that are believed to be reasonable under the circumstances and that are based upon historical experience, current conditions and expert advice. These estimates are reviewed, on an ongoing basis, as new or updated information and facts arise. The use of different assumptions would result in different estimates, and actual results may differ from results based on these estimates.

A summary of the Company’s significant accounting policies is included in Notes 2 and 3 to the financial statements for the year ended December 31, 2007. The following is a discussion of the accounting estimates that are significant in determining the Company’s financial results and position:

Resource Interests

The Company defers (capitalizes) all acquisition, exploration and development costs that relate to its Prairie Creek Property. The carrying value of resource interests are reviewed at least annually or when events or changes in circumstances suggest the carrying value of such assets may not be recoverable (utilizing undiscounted estimates of cash flows) or has become impaired. When the carrying values of resource interests are determined to be greater than undiscounted cash flows, impairment is recorded to write down the assets to their estimated fair value. In assessing the future estimated cash flows management uses various estimates including, but not limited to, future operating and capital costs as well as future commodity prices and estimates based upon indicated and inferred resources. The ultimate recoverability of amounts deferred for resource interests is dependent upon, amongst other things, obtaining the necessary financing to complete the development of, and obtaining the necessary permits to operate, the Prairie Creek mine.

Asset retirement obligation

Asset retirement obligations are recognized in the period in which they are incurred if a reasonable estimate of fair value can be determined. The fair value of the estimated asset retirement cost is capitalized as part of the carrying amount of the long-lived asset when incurred or revised, and amortized over the asset’s estimated useful life. Increases in the asset retirement obligation resulting from the passage of time are recorded as accretion expenses. Actual expenditures incurred are charged against the accumulated obligation. Various assumptions are used in determining the liability including current mine plans, future retirement costs and estimates of resources. The estimates used require extensive judgment as to the nature, cost and timing of the work to be completed and may change with future changes to cost structures, environmental laws and requirements and remediation practices employed. Management evaluates the asset retirement obligation estimates at the end of each reporting period to determine whether the estimates continue to be appropriate.

As at March 31, 2008, the Company estimates that the total undiscounted cash flows required to settle the reclamation and remediation obligations at the Prairie Creek Property are $2.5 million, mostly to be incurred at the end of the life of the mine. These cash flows have been determined to have a present value of $1.25 million based upon the following assumptions: long-term inflation rate of 2.5%; a credit-adjusted risk-free discount rate of 6.5%; and a weighted average useful life production facilities and equipment of ten years.


 
5

 

Stock-based compensation

The Company applies the fair-value method of accounting for stock-based compensation in accordance with the recommendations of CICA 3870, “Stock-based Compensation and Other Stock-based Payments.” Stock-based compensation expense is calculated using the Black-Scholes option pricing model (“Black-Scholes”).  Black-Scholes requires management to make various estimates and assumptions that impact the value assigned to the option expense including the predicted future volatility of the stock price, the risk free interest rate, dividend yield and the expected life of the options. Management has used the following assumptions for its Black-Scholes calculations:

 
Years ended December 31,
 
2007
2006
2005
Dividend yield
0%
0%
0%
Risk free interest rate
4.07%
4.02%
3.5%
Expected life
5 years
5 years
5 years
Expected volatility
89%
101%
91%

Financial Instruments

As disclosed in Note 3(b) to the audited financial statements for the year ended December 31, 2007 and in Note 11 to the unaudited financial statements for the three months ended March 31, 2008, the Company elected to classify its short term investments and cash equivalents as held for trading assets which requires that gains or losses from changes in fair value are taken directly to net income as this was considered the most appropriate classification. Should a different classification have been determined, it is possible that such gains or losses would have been included in other comprehensive income instead of net income.

The Company has also included note disclosure concerning some of the risk factors relating to its financial instruments – see Note 11 to the unaudited financial statements for the three months ended March 31, 2008.


SUMMARY OF QUARTERLY RESULTS

(thousands of dollars except per share amounts)
Quarter ended
Interest income $
Net (Loss) $
Net (Loss) per Common Share  $
March 31, 2008
296
(223)
(0.00)
December 31, 2007
208
(684)
(0.01)
September 30, 2007
375
(1)
(0.00)
June 30, 2007
331
(171)
(0.00)
March 31, 2007
320
(64)
(0.00)
December 31, 2006
304
 (966)
(0.02)
September 30, 2006
237
(39)
(0.00)
June 30, 2006
226
(326)
(0.00)

The Company’s sole source of revenue continues to be interest income on its cash, cash equivalents and short term investment balances following share issuances during the last two fiscal years. Quarterly losses reflect the general and administrative costs incurred by the Company; quarters that show an increased loss relevant to others are typically those in which amounts have been recorded for stock-based compensation expense following the granting and vesting of stock options to employees and consultants.


LIQUIDITY AND CAPITAL RESOURCES

As at March 31, 2008, the Company had cash and cash equivalents of $12.3 million, short-term investments of $14.3 million and a positive working capital balance of $27.3 million. As at December 31, 2007, the Company had cash and cash equivalents of $6.9 million, short-term investments of $21.5 million and a positive working capital balance of $27.4 million. Accordingly, the Company believes that it remains in a strong position to further continue with its planned exploration, development and permitting activities at the Prairie Creek Mine. The Company’s cash and cash equivalents were increased and its short-term investments reduced at March 31, 2008, compared to December 31, 2007, as a result of higher rates of return being available on short-term cash deposits.

The Company’s short-term investments consist primarily of Bankers’ Acceptances and Guaranteed Investment Certificates; accordingly, the Company’s investments have not been impacted by the recent market issues relating to asset-backed commercial paper or sub-prime debt instruments, except in so far as the rates of return have declined generally across the market such that the interest earned on investments is currently lower than in early 2007.

Canadian Zinc does not generate any cash flows from operations and has no income other than interest income. The Company relies on equity financings for its working capital requirements and to fund its planned exploration, development and permitting activities. No new financing arrangements were entered into during the three months ended March 31, 2008 as the Company currently has sufficient funds on hand for current operations. It is anticipated that future additional financing will be required at such time as the Prairie Creek Mine is to be further developed in order to commence commercial production, subject to the Company successfully obtaining the required permits and licences to operate.

The Company continued to incur expenditures on its Prairie Creek Mine site during the three months ended March 31, 2008 during which time $1 million was expended on exploration and development costs. Details of the Company’s deferred exploration and development costs are included in Note 5 to the unaudited financial statements for the three months ended March 31, 2008. The Company also purchased, during the three months ended March 31, 2008, $350,000 of mining equipment from a contractor that had been working on the Prairie Creek underground drilling program that ended in late 2007.

The Company’s accounts payable and accrued liabilities at March 31, 2008 were $443,000 compared to $1.254 million at December 31, 2007. This decrease follows the termination of the drilling program and a reduced level of activity at the Prairie Creek Mine Site during the quarter ended March 31, 2008.

Canadian Zinc considers that its capital resources are adequate to support the current operations and short to medium-term plans of the Company. However, additional capital will be required in order to bring the Prairie Creek Mine into production in the future. The ability to raise additional finance may be impaired, or such financing may not be available on favourable terms, due to conditions beyond the control of the Company, such as uncertainty in the capital markets.  This is discussed in more detail in the “risks and uncertainties” section in the Company’s Annual Information Form dated March 28, 2008, a copy of which can be obtained on SEDAR at www.sedar.com.



 
6

 

NORMAL COURSE ISSUER BID

The Company has obtained TSX approval to conduct a normal course issuer bid (the “Bid”) pursuant to which the Company may purchase up to a maximum of 5,000,000 common shares in the capital of the Company, representing approximately 4.1% of the issued and outstanding common shares of the Company of 120,685,063 as at May 1, 2008. The Company is of the view that the recent market prices of the common shares of the Company do not properly reflect the underlying value of the Company's assets. No insiders of the Company intend to participate in the Bid.

The Bid may be carried out from May 13, 2008 for a period of up to one year. Pursuant to TSX policies, daily purchases made by the Company under the Bid may not exceed 44,876 common shares, which is 25% of the average daily trading volume of 179,505 common shares on the TSX over the six months prior to the commencement of the Bid, subject to certain prescribed exceptions. Purchases pursuant to the Bid will be made from time to time through the facilities of the TSX. Common shares purchased will be paid for with cash available from the Company's working capital, which at March 31, 2008, was $27.3 million. All common shares purchased pursuant to the Bid will be cancelled and returned to treasury.


RISKS AND UNCERTAINTIES

In conducting its business, Canadian Zinc faces a number of risks and uncertainties.  These are described in detail under the heading “Risk Factors” in the Company’s Annual Information Form for the year ended December 31, 2007, dated March 28, 2008, which is filed on SEDAR and which may be found at www.sedar.com. The principal risks and uncertainties faced by the Company are also summarized in the MD&A for the year ended December 31, 2007.


OTHER INFORMATION

The Company has not entered into any off-balance sheet arrangements at this time.

As at May 14, 2008, the Company had the following securities issued and outstanding:

 

Common shares
120,685,063
   
Share purchase options
    4,815,000
 
exercisable between $0.60 - $0.94 per share.
Share purchase warrants
    9,715,012
 
exercisable between $0.93 - $1.20 per share.


DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

Disclosure controls and procedures

Disclosure controls and procedures include the Company’s controls and procedures that are designed to provide reasonable assurance that material items requiring disclosure by the Company are identified and reported in a timely manner.

The Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) of the Company have evaluated, and continue to evaluate, the design and effectiveness of the Company’s disclosure controls and procedures as of March 31, 2008, and have concluded that such disclosure controls and procedures were operating effectively at that date.

There were no significant changes to the Company’s disclosure controls process during the quarter ended March 31, 2008.

It should be noted that, while the Company’s CEO and CFO believe that the Company’s disclosure controls and procedures provide a reasonable level of assurance and that they are effective, they do not expect that the disclosure controls and procedures can prevent all errors or mistakes. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Internal controls over financial reporting

Management is responsible for designing, establishing and maintaining a system of internal controls over financial reporting to provide reasonable assurance that the financial information prepared by the Company for external purposes is reliable and has been recorded, processed and reported in an accurate and timely manner in accordance with GAAP.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities. The Audit Committee fulfills its role of ensuring the integrity of the reported information through its review of the interim and annual financial statements.

There are inherent limitations in the effectiveness of internal controls over financial reporting, including the possibility that misstatements may not be prevented or detected. Accordingly, even effective internal controls over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Furthermore, the effectiveness of internal controls can change with circumstances. The Company has paid particular attention to segregation of duties matters surrounding its internal controls over financial reporting as the Company has only limited staff resources at the present time such that “ideal” segregation of duties is not feasible. This risk is mitigated by management and Board review where appropriate. At the present time, the Company does not anticipate hiring additional accounting or administrative staff as this is not considered necessary or practical and accordingly, will continue to rely on review procedures to detect potential misstatements in reporting to the public.

The CEO and the CFO have evaluated the design of internal controls over financial reporting as at March 31, 2008; the Company believes that its internal controls over financial reporting, at that date, were designed effectively to provide reasonable, but not absolute, assurance that the objectives of the control system are met.

The Company’s management, including the CEO and CFO, believe that any internal controls over financial reporting, including those systems determined to be effective and no matter how well conceived and operated, have inherent limitations and can provide only reasonable, not absolute, assurance that the objectives of the control system are met with respect to financial statement preparation and presentation. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.


 
7

 

Changes in internal controls over financial reporting

The Company continues to review and assess its internal controls over financial reporting. There were no significant changes made to internal controls over financial reporting during the three months ended March 31, 2008.

The Company made certain other changes to its systems of internal controls over financial reporting in 2007 that did not materially affect, and are not reasonably likely to materially affect, internal control over financial reporting. During this process, management identified certain potential deficiencies in internal control over financial reporting, but none which were individually or cumulatively considered to be material weaknesses. The design of a control system must reflect that there are staffing and financial resource constraints, and that the benefits of controls must be considered relative to their costs to the Company. Due to the limited number of staff at Canadian Zinc, it is not feasible or cost effective to achieve complete segregation of incompatible duties. These risks are not considered to be significant. The Company’s management has taken such action as it considers appropriate to minimize any potential risks from these deficiencies, including using outside consultants and advisors when deemed appropriate.


 
8
 

EX-99.2 5 ex_99-2may1508.htm EXHIBIT 99.2 PRESS RELEASE MAY 15-08 ex_99-2may1508.htm


 
 
 

 

 
CZN-TSX
CZICF-OTCBB
 
FOR IMMEDIATE RELEASE
May 15, 2008

 
 
CANADIAN ZINC REPORTS FIRST QUARTER 2008 RESULTS
 
PRE-FEASIBILITY STUDY UNDERWAY
 


Vancouver, British Columbia, May 15, 2008 - Canadian Zinc Corporation (TSX: CZN; OTCBB: CZICF) (the “Company” or “Canadian Zinc”) announces its financial results for the quarter ended March 31, 2008.  This press release should be read in conjunction with the unaudited financial statements and notes thereto for the three months ended March 31, 2008, and management’s discussion & analysis (“MD&A”) for the quarter ended March 31, 2008, available on SEDAR at www.sedar.com.

The Company’s principal focus is its efforts to advance the Prairie Creek Mine, a zinc/lead/silver property located in the Northwest Territories of Canada, towards production.  The Prairie Creek Mine is partially developed with an existing 1,000 tonne per day mill and related infrastructure.  In 2006 and 2007, the Company carried out major programs at Prairie Creek including driving a new internal decline approximately 600 metres long which enabled a significant underground exploration and infill drilling program to occur.  A total of $18.7 million was invested in Prairie Creek in 2006 and 2007.

As at March 31, 2008, Canadian Zinc had cash, cash equivalents and short term investments of $26.6 million and a positive working capital balance of $27.3 million.  Accordingly, the Company believes that it remains in a strong position to further continue its planned exploration, development and permitting activities at the Prairie Creek Mine.

The Company reported a net loss for the quarter of $223,000 compared to a loss of $64,000 in the first quarter of 2007.  The increased loss in the 2008 period was mainly attributable to stock-based compensation expense of $168,000 relating to the vesting of stock options granted prior to the three month period ended March 31, 2008; there was no equivalent charge in the three month period ended March 31, 2007.
 
Pre-Feasibility Study

Following the results of the 2007 drilling program a Technical Report dated October 12, 2007, was prepared by MineFill Services Inc. (David Stone and Stephen Godden – Qualified Independent Persons), to National Instrument 43-101 standards.  The Report indicates that the Prairie Creek Property hosts total Measured and Indicated Resources of 5,840,329 tonnes grading 10.71% zinc, 9.90% lead, 161.12 grams silver per tonne and 0.326% copper.  In addition, the Report confirms a large Inferred Resource of 5,554,576 tonnes grading 13.53% zinc, 11.43% lead, 215 grams per tonne silver and 0.514% copper and additional exploration potential.

The Technical Report has been filed on SEDAR and may be viewed under the Company’s profile at www.sedar.com, or on the Company’s website at www.canadianzinc.com.

The Measured and Indicated Resource confirmed by the Technical Report is capable of supporting a mine life in excess of ten years at the planned 1,000 – 1,300 tonnes per day production rate.  The Company is now examining the various operating alternatives outlined in the 2001 preliminary Scoping Study (which is now considered to be out of date and should not be relied upon) and is working towards updating and converting the Scoping Study into a Pre-Feasibility study utilizing the updated resources in the Technical Report.  The Pre-Feasibility study, which is being undertaken by SNC-Lavalin Inc., is scheduled to be completed later in 2008.

New Water Licence Issued

During 2007, and throughout the first quarter of 2008, the Company was actively engaged in permitting activities.  In April 2007, a Land Use Permit for winter use of the road which connects the Prairie Creek mine with the Liard Highway was obtained from the Mackenzie Valley Land and Water Board (the “Water Board”).  In June 2007, the Company applied for a Type B Water Licence to undertake road rehabilitation work along the Prairie Creek stream-bed and, following extensive community consultation which culminated in a Band Council Resolution adopted by the Nahanni  Butte Dene Band on March 4, 2008 agreeing to give their support to the issuance of the Licence, the Water Licence was issued by the Water Board on March 20, 2008. The Water Licence is valid for a period of five years.

Since 2001, the Company has successfully obtained seven permits for the exploration and development of the Prairie Creek property from the Mackenzie Valley Land and Water Board, including two Type B Water Licences, four Land Use Permits for exploration activities and underground development and a winter road permit.  Although the Company has experienced long delays in obtaining permits, and expects a continuing lengthy permitting process, the Company has been able to carry out extensive programs at Prairie Creek, in accordance with all regulatory requirements, and has built up a considerable environmental knowledge base which will facilitate the application for the mine operating permits.


 
 

 

2008 Activities

The Company’s main focus for 2008 is to complete the Pre-Feasibility study and continue permitting activities in order to advance the project towards commercial production.  The Company plans to apply for the Land Use Permit and Water Licence for the commercial operation of the Prairie Creek Mine once the Project Description Report can be finalized for the application submittal.

A preliminary budget of $7.5 million has been approved for the Prairie Creek project for 2008, which is in addition to the regular, ongoing costs of maintaining the Prairie Creek site.  Planned programs include completion of the Pre-Feasibility Study, ongoing permitting activities, further engineering and rehabilitation work on the road to the mine Site and ongoing exploration.

Alan Taylor, P.Geo., Chief Operating Officer, Vice President Exploration and a Director of Canadian Zinc Corporation, is responsible for the Company’s exploration program, and is a Qualified Person for the purposes of National Instrument 43-101 and has approved this press release.

Risks and Uncertainties

The Company’s business and results of operations are subject to numerous risks and uncertainties, many of which are beyond its ability to control or predict.  Because of these risks and uncertainties, actual results may differ materially from those expressed or implied by forward-looking statements, and investors are cautioned not to place undue reliance on such statements, which speak only as of the date hereof.

Investors are urged to review the discussion of risk factors associated with the Company’s business set out below and in the Company’s Annual Information Form for the year ended December 31, 2007, which has been filed with the Canadian Securities Regulators on SEDAR (www.sedar.com).  The risks and uncertainties as summarized in the Company’s MD&A and in other Canadian and U.S. filings are not the only risks facing the Company.  Additional risks and uncertainties not currently known to the Company, or that are currently deemed to be immaterial, also may materially adversely affect the Company’s business, financial condition and/or operating results.

Cautionary Statement - Forward Looking Information
 
This press release contains certain forward-looking information.  This forward looking information includes, or may be based upon, estimates, forecasts, and statements as to management’s expectations with respect to, among other things, the issue of permits,  the size and quality of the company’s mineral resources, future trends for the company, progress in development of mineral properties, future production and sales volumes, capital costs, mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, the outcome of legal proceedings, the timing of exploration, development and mining activities and the financial results of the company. There can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The Company does not currently hold a permit for the operation of the Prairie Creek Mine.  Mineral resources that are not mineral reserves do not have demonstrated economic viability.  Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves.  There is no certainty that mineral resources will be converted into mineral reserves.
 
Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated or Inferred Resources
 
The information presented herein uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred mineral resources” have significant uncertainty as to their existence, and as to their economic feasibility. United States investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically mineable. It cannot be assumed that all or any part of an inferred mineral resource would ever be upgraded to a higher category. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves.

For further information contact:
 
John F. Kearney
Alan B. Taylor
Chairman
VP Exploration & Chief Operating Officer
(416) 362- 6686
(604) 688- 2001
Suite 1002 – 111 Richmond Street West
Toronto, ON   M5H 2G4
Tel:  (416 ) 362-6686     Fax:  (416) 368-5344
Suite 1710-650 West Georgia Street, Vancouver, BC  V6B 4N9  Tel: (604) 688-2001     Fax: (604) 688-2043
Tollfree:1-866-688-2001
 
E-mail: invest@canadianzinc.com      Website:  www.canadianzinc.com

EX-99.3 6 ex_99-3may808.htm EXHIBIT 99.3 PRESS RELEASE MAY 8-08 ex_99-3may808.htm
 


 





PRESS RELEASE

CZN-TSX
CZICF-OTCBB
FOR IMMEDIATE RELEASE
May 8, 2008

CANADIAN ZINC CORPORATION ANNOUNCES NORMAL COURSE ISSUER BID

Vancouver, British Columbia, May 8, 2008 – Canadian Zinc Corporation (TSX: CZN; OTCBB: CZICF) (the "Company" or "Canadian Zinc") announces that it intends to conduct, subject to regulatory approval, a normal course issuer bid (the "Bid") pursuant to which the Company may purchase up to a maximum of 5,000,000 common shares in the capital of the Company (the "Shares"), representing approximately 4.1% of the issued and outstanding shares of the Company of 120,685,063 as at May 1, 2008.
 
The Company is of the view that the recent market prices of the Shares do not properly reflect the underlying value of the Company's assets. No insiders of the Company intend to participate in the Bid.
 
The Company intends to commence the Bid on or about May 13, 2008 and terminate the Bid on or about May 12, 2009. Pursuant to TSX policies, daily purchases made by the Company may not exceed 44,876 shares, which is 25% of the average daily trading volume of 179,505 Shares on the TSX over the past six months, subject to certain prescribed exceptions. Purchases pursuant to the Bid will be made from time to time through the facilities of the Toronto Stock Exchange. Shares purchased will be paid for with cash available from the Company's working capital, which at March 31, 2008, was approximately $27 million. All Shares purchased pursuant to the Bid will be cancelled and returned to treasury.
 
About Canadian Zinc

Canadian Zinc’s 100% owned Prairie Creek (lead/zinc/silver) Project, located in the Northwest Territories, includes a partially developed underground mine with an existing 1,000 ton per day mill and related infrastructure and equipment. The Prairie Creek Property hosts a major mineral deposit that is defined by a recently completed NI 43-101 compliant report which calculates a Measured and Indicated mineral resource in the Vein and Stratabound deposits of 5.2 million tonnes grading 11.4% Zn, 10.9% Pb, 176 g/t Ag and 0.3% Cu along with an open ended Inferred resource of 5.5 million tonnes of 13.5% Zn, 11.4% Pb, 215 g/t Ag and 0.5% Cu. [Technical Report NI 43-101 – David M. Stone, Minefill Services, Inc., Qualified Person, October 2007 filed on SEDAR].
 
Cautionary Statement - Forward Looking Information
 
This press release contains certain forward-looking information.  This forward looking information includes, or may be based upon, estimates, forecasts, and statements as to management’s expectations with respect to, among other things, the issue of permits,  the size and quality of the company’s mineral resources, future trends for the company, progress in development of mineral properties, future production and sales volumes, capital costs, mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, the outcome of legal proceedings, the timing of exploration, development and mining activities and the financial results of the company. There can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The Company does not currently hold a permit for the operation of the Prairie Creek Mine.  Mineral resources that are not mineral reserves do not have demonstrated economic viability.  Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves.  There is no certainty that mineral resources will be converted into mineral reserves.

For further information contact:
 

 
John F. Kearney
 
Alan B. Taylor
Chairman
VP Exploration & Chief Operating Officer
(416) 362- 6686
(604) 688- 2001
Suite 1002 – 111 Richmond Street West
Toronto, ON   M5H 2G4
Tel:  (416 ) 362-6686     Fax:  (416) 368-5344
Suite 1710-650 West Georgia Street, Vancouver, BC  V6B 4N9  Tel: (604) 688-2001     Fax: (604) 688-2043
Tollfree:1-866-688-2001
 
E-mail: invest@canadianzinc.com      Website:  www.canadianzinc.com


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-----END PRIVACY-ENHANCED MESSAGE-----