TORONTO, ONTARIO--(CCNMatthews - Nov. 7, 2006) - Canadian Zinc Corporation (TSX:CZN) is pleased to announce it has entered into an engagement agreement with Northern Securities Inc. ("Northern"), as lead underwriter on behalf of an underwriting syndicate, to raise gross proceeds of $10,000,000 consisting of $3,000,000 in Units and $7,000,000 in Flow-Through Shares, on a firm underwriting basis, subject to certain conditions. The underwriting syndicate led by Northern includes Canaccord Adams and Octagon Capital Corporation.
The Flow-Through Shares are priced at $1.15 per share. The Units are priced at $0.90 per Unit, with each Unit consisting of one common share and one-half share purchase warrant. Each full warrant is exercisable to purchase one common share at a price of $1.15 per share for a period of two years.
Completion of the private placement is subject to certain conditions, including approval by the Toronto Stock Exchange and other regulatory agencies. The financing is anticipated to be completed on or before November 28, 2006. The underwriters will be paid a commission fee of 7% in cash and will be issued broker warrants equal to 7% of the Units sold in the offering and 7% of the Flow-Through Shares sold in the offering. Each broker unit warrant is exercisable at $0.93 into one broker unit consisting of one common share and one half warrant, with each whole warrant exercisable at $1.15 for a period of two years. Each broker flow through warrant is exercisable into one common share at $1.15 for a period of two years.
The proceeds from the private placement will be added to the Company's working capital and used for the exploration and development of the Prairie Creek Mine Project and general corporate purposes, including other possible property acquisitions.
Canadian Zinc's 100% owned Prairie Creek (zinc/silver/lead) 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 containing a historically estimated resource of 3.6 million tonnes (measured and indicated) grading 11.8% zinc; 9.7% lead; 0.3% copper and 141.5 grams silver per tonne and 8.3 million tonnes (inferred) grading 12.8% zinc; 10.5% lead and 0.5% copper and 169.2 grams silver per tonne, with significant exploration potential. The deposit contains an estimated, in situ 3 billion pounds of zinc, 2.2 billion pounds of lead and approximately 70 million ounces of silver.
Canadian Zinc Corporation trades on the Toronto Stock Exchange under the symbol "CZN" and currently has 95,078,135 common shares issued and outstanding.
Cautionary Statement - Forward Looking Information:
This press release contains 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 and mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, the outcome of legal proceedings and the financial results of the company. 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 PLEASE CONTACT:
Canadian Zinc Corporation
John F. Kearney
(416) 368-5344 (FAX)
Canadian Zinc Corporation
VP Exploration & Chief Operating Officer
(604) 688-2001 or Toll Free: 1-866-688-2001
(604) 688-2043 (FAX)