Scozinc Mine Restart Plan

The restart of the ScoZinc Mine is seen as the first step in unlocking the potential for continued exploration and development within the Windsor Basin. It also provides ScoZinc with an operating base in Nova Scotia to pursue other exploration and development opportunities.

On November 22, 2012, an update to the August 30, 2011 Preliminary Economic Assessment (“PEA”) Report for the potential restart of the ScoZinc Mine Restart was reported. A second update to the PEA was reported June 11, 2013 to reflect reviews to the proposed mine plan, including an addition of a potential underground mining operation to remove higher grade mineralization between the Main and Northeast pits that straddle the Gays River. A recent independent update to the PEA by Stantec Consulting was reported on February 5, 2018. It includes a more detailed mine plan, contract mining obtained by bidding to major Nova Scotia contractors, updated capital cost, and updated milling and other operating costs. The report shows robust economics for the restart of the permitted ScoZinc mine.

The February 5, 2018 updated and independent PEA include the following highlights:

After-Tax NPV (at 5%) CAD $127.9 M
After-Tax NPV (at 8%) CAD $107.7 M
After-Tax Internal Rate of Return 63.7%
Annual Average Earnings Before Interest, Taxes, Depreciation and Amortization for life-of-mine CAD $31.1 M
C1 Cash Cost per pound of zinc for life-of-mine (after credits for lead) USD $0.59
Total Cost of production per pound of zinc for life-of-mine (including operating, capital and sustaining costs after credits for lead) USD $0.72
Payback of capital 1.9 years
Mill Processing Rate (tonnes per day) 2,600
Total operating cost per tonne milled for the life-of-mine CAD $54.77
Total cost per tonne mined (all materials) CAD $3.05
Restart Capital CAD $26.9 M
Zinc Price USD $1.25
Lead Price USD $1.05
Exchange Rate (CAD to USD) 0.81
Total Payable Metal Produced for the life-of-mine (Million lbs) Zinc: 323, Lead: 184

PEAs are preliminary in nature and include inferred resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves and there is no certainty that the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.For complete PEA details please see the Company’s February 5, 2018 news release available under SEDAR filings at

The Company continues to monitor zinc and lead prices, the exchange rate between the Canadian and United States dollars, and the financing environment for the potential restart of the mine.  The Company has all of the necessary permits to restart the mine, which is currently on care and maintenance. Industry and market conditions favor the restart of operations so the Company is investigating a variety of alternatives for restart financing.