Canadian Zinc Corp has appointed HCF International Advisers Ltd., an advisory boutique based in London, U.K., as its adviser in securing debt financing for the construction of its Prairie Creek Zn-Pb-Ag mine in the Northwest Territories, Canada. HCF is an independent corporate finance and focused on the global natural resources and infrastructure sectors.
HCF has prepared a three-staged approach to source and negotiate debt financing for Prairie Creek. The preliminary stage, which is now under way, includes development of a funding strategy, appointment of an independent technical engineer, preparation of a new financial model and conducting preliminary market soundings of potential lenders. This will be followed by formal engagement with potentially interested parties and thereafter negotiation and finalization of financing documentation.
The estimated capex as reported in the Prairie Creek 2016 Preliminary Feasibility Study (PFS) was $250 million and it is anticipated that debt financing could range up to 70% of this figure.
“The Prairie Creek project is on the cusp of development with a definitive feasibility study underway to support the project debt financing,” said John F. Kearney, chairman and CEO of Canadian Zinc. “We believe the appointment of an experienced, financial adviser like HCF is timely and will help guide the debt financing process to a successful conclusion.”
Canadian Zinc has also recently engaged Ausenco to undertake project development planning services for Prairie Creek and to deliver an optimized project development plan that can be used to advance the project to production and provide a critical link to the project financing plan. The Project Execution Plan will include the development of a contract and procurement strategy. This strategy will align with the project execution schedule and will serve to support the capital cost estimate as well as execution risks and opportunities, and with the ability and capacity to convert to an Engineering Procurement and Construction Management (EPCM) contract at the appropriate time.
The Prairie Creek mine hosts proven and probable reserves of 7.6 million metric tons (mt) averaging 8.93% zinc, 8.33% lead, and 127.58 g/mt of silver within measured and indicated resources of 8.7 million mt grading 9.5% zinc, 8.9% lead and 136 g/mt of silver.
Over its 17 year mine-life, Prairie Creek’s projected average annual mine production is expected to be approximately 60,000 mt of zinc concentrate and 55,000 mt of lead concentrate containing approximately 86 million lb of zinc, 82 million lb of lead and 1.7 million oz of silver.