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| May 29, 2014 --- Vol. 08, No. 22 | May 2014
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Northwest Territories
DIAMONDS – Kennady Diamonds Inc. May 27 reported the conclusion of the 2014 winter-spring drill program at its Kennady North diamond project in Northwest Territories. Roughly 10,200 meters of drilling was completed, resulting in the recovery of more than 25 metric tons of kimberlite from Kelvin and more than 1 metric ton of kimberlite from Faraday. Kennady Diamonds CEO Patrick Evans said, “Besides achieving our targets for both meters drilled and metric tons of kimberlite recovered, we are particular pleased with the results from delineation drilling at both the Kelvin and Faraday kimberlites. Kelvin delineation drill hole KDI-14-018 intersected kimberlite over 80 meters, with substantially all of the kimberlite to the north and beyond the current geological model. Also, delineation drilling at Faraday 3 resulted in the discovery of a kimberlite ‘blow’ with intercepts ranging up to 42 meters.” Mr. Evans added: “These discoveries confirm the potential for substantial additional tonnage at the Kelvin and Faraday kimberlites, both of which have already returned exceptionally high sample grades.” The Faraday kimberlite sample is being prepared for shipment to the Geoanalytical Laboratories Diamond Services at the Saskatchewan Research Council. Diamonds will be recovered by caustic fusion and results are expected in the third quarter of 2014. The Kelvin sample has been shipped to Yellowknife where detailed logging and analysis will take place prior to dispatch to the SRC for processing. Results from the Kelvin mini-bulk sample are expected in the fourth quarter of 2014. Four of the winter drill holes tested the G6 geophysical anomaly approximately 10 kilometers (six miles) to the west of the Kelvin-Faraday corridor without intersecting kimberlite. Kennady Diamonds said preparations are underway for the 2014 summer exploration program. The program is expected to include: at least 5,000 meters of core drilling; wide-spaced overburden till sampling by reverse circulation drilling at some 270 sites across the Kennady North project area; ground geophysics; LiDAR airborne mapping of the entire Kennady North project area; and infrastructure upgrades to support an expanded 2015 winter exploration program. “We are well on our way to declaring our maiden resource statement by the end of 2014. Our vision remains to define a Kelvin-Faraday resource of between 5 and 8 million metric tons with a grade of greater than 2 carats per metric ton,” Evans said.
TUNGSTEN – North American Tungsten Corporation Ltd. May 23 reported net income of C$2.5 million (C1 cent per share) for the second quarter, ended March 31, 2014, and net loss of C$2.1 million (C1 cent per share) for the six months ended March 31, 2014. These compare to net loss of C$3.4 million and net loss of C$7.4 million for the comparable periods in fiscal 2013. The company’s production increased to 89,000 metric ton units during the second quarter of 2014, driven primarily by relatively high grade material from the mine. Mill recovery and throughput were generally consistent with historical production. N.A. Tungsten recognized sales of 70,000 mtus during the period, with the remaining production in inventory at quarter end. The company reports revenue of C$23.1 million for the quarter and C$43.5 million for the six months ended March 31, 2014, compared to C$24.9 million and C$36.4 million for the comparable periods in 2013. N.A. Tungsten said the improved production generated cash flows from operations before change in non-cash working capital of C$6.4 million for the second quarter and C$5.9 million for the six months ended March 31, 2014. These compare to cash flows of under C$100,000 and a cash outflow of C$1 million for the comparable periods in fiscal 2013. The Cantung mill process improvement project that began in the third quarter 2013 is underway. All of the equipment necessary for the project is at site and implementation is in process. N.A. Tungsten is targeting a 20 percent increase in the mill throughput and an increase to the total metallurgical recovery by improving the effectiveness of the gravity and flotation circuits. To support the enhanced throughput, the company is utilizing materials from its open-pit operations in addition to its underground mining operations. The 2014 open-pit mining campaign is scheduled to begin in July and continue until October. The company is also in the process of finalizing a comprehensive tailings management program including upgrades to the current tailings ponds, enhancements to its waste water treatment plant and development of a long-term storage facility for tailings. North American Tungsten Chairman and CEO Kurt Heikkila said, “The results for the quarter were a great improvement from Q1, primarily driven by relatively high-grade mill feed. The mill improvement project is being advanced to enable the company to achieve high levels of production and positive results, during periods when less high-grade mill feed is available.”
PERFORMANCE/UPDATE – Canadian Zinc Corp. May 16 reported its financial and operating results for the quarter ended March 31and provided outlook on 2014 activities. For the first three-month period of 2014, the company reported a net loss and comprehensive loss of C$2.027 million compared with a net loss and comprehensive loss of C$4.67 for the same period in 2013. The net loss in the 2014 quarter included a gain of C$120,000 on the company’s marketable securities compared with loss of C$2.32 million. At March 31, Canadian Zinc had a positive working capital balance of C$9.24 million, including cash and cash equivalents of C$5.78 million, short term investments of $2 million and marketable securities of C$1.5 million. At Dec. 31, , the company had cash and cash equivalents of C$8.38 million, short-term investments of C$2 million, marketable securities of $C1.33 million, and a positive working capital balance of C$10.62 million. The primary objective of Canadian Zinc is to bring the Prairie Creek zinc-lead-silver mine into production at the earliest opportunity and in pursuit of that objective secure the necessary capital funding to rehabilitate, upgrade and develop the mine, inclusive of the processing plant and related site infrastructure. To further build on and refine the prefeasibility study completed by SNC-Lavalin Inc. in 2012, Canadian Zinc has engaged in an optimization study with a view to augmenting what has already been completed during and after the PFS. Further advancement of engineering designs, detailing and assessing what existing equipment can be utilized, determining upgrade requirements, exploring more efficient financial ways to reduce initial capital costs. A number of bid tender documents relating to various work packages needed to develop the mine have been distributed in order to confirm the detailed plans and design and actual costs for developing the mine into production. As a lead-up to the optimization study in November, Canadian Zinc engaged AMC to undertake an underground optimization study of the mine plan with a view to reducing the initial development, shorten the development schedule and minimize mine operating costs. In January 2014, the Company engaged Tetra Tech to provide technical services for basic engineering and procurement services for the development of major equipment packages, facility rehabilitation and repair work and capital items for the Prairie Creek Mine. Specifically, these technical services will develop tender packages for mine rehabilitation and development; mill completion, power generation and distribution; heat recovery systems; a dense media separation plant; a paste fill plant; a water treatment plant; instrumentation and control systems; camp construction and winter road construction and maintenance needed to put the Prairie Creek Mine into production. Canadian Zinc and Tetra Tech have now issued a number of mine site packages for competitive tender to qualified bidders, giving full recognition to opportunities for participation by local First Nations and adjacent communities. Canadian Zinc said the tendering and procurement process, managed by Tetra Tech, is an important phase of the Prairie Creek project that will refine and augment the design work completed previously and will generate definitive estimates of the capital cost and schedules, and in turn reduce contingency factors, required to place the Prairie Creek Mine into operation. The Prairie Creek Mine site is scheduled to be re-opened at the end of May in order for ongoing care and maintenance programs to be conducted along with some pre-development and road work programs that can be completed during the summer season.
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