Update on Tongling Nonferrous Metals Group Holdings Co. Ltd. $18 Million Private Placement
Vancouver, British Columbia, Canada – Tuesday, October 26, 2010 – Canada Zinc Metals Corp. (TSX Venture Exchange: CZX) is pleased to announce that, further to its news release dated July 26, 2010, it has been advised by Tongling Nonferrous Metals Group Holdings Co. Ltd. (“Tongling”) that the State-Owned Assets Supervision and Administration Commission of Anhui, China, has approved Tongling’s application to further invest in Canada Zinc Metals. Tongling will now apply for final approval from the Development and Reform Commission.
Tongling has subscribed, by way of a non-brokered private placement, for 31,386,224 units of Canada Zinc Metals at a price of $0.5735 per unit for gross proceeds of $18,000,000. Each unit consists of one common share and one half of a common share purchase warrant. Each whole warrant shall entitle the purchaser to purchase, at any time within 24 months from closing, one additional common share of the Company at a price of $0.675 during the first year and at a price of $0.775 during the second year. Upon closing of the private placement, Tongling will own approximately a 36.5% equity interest in Canada Zinc Metals.
Tongling Nonferrous Metals Group Holdings Co. Ltd., based in Tongling, Anhui, is a state-owned holding company, and one of China's largest copper smelting companies. Tongling’s principal activities are exploration, mining, ore processing, smelting & refining and products processing of copper, lead, zinc, gold, silver and other non-ferrous and rare metals.
The financing is subject to receiving the necessary approvals of the relevant Chinese regulatory departments and the TSX Venture Exchange.
About Canada Zinc Metals Corp.
Canada Zinc Metals is a mineral exploration company focused on unlocking the potential of a future long life mining district in British Columbia, Canada. The Company is the dominant land holder in a world class mineral belt called the Kechika Trough which hosts in excess of 80 million tonnes of base metal resources. Canada Zinc Metals owns a total of 78,526 hectares in 233 claims which extend northwestward from the Akie property for a distance of 125 km.
About the Akie Property
The Akie zinc-lead property is situated within the southern-most part (Kechika Trough) of the regionally extensive Paleozoic Selwyn Basin, one of the most prolific sedimentary basins in the world for the occurrence of SEDEX zinc-lead-silver and stratiform barite deposits.
Drilling on the Akie property by Inmet Mining Corporation during the period 1994 to 1996 and by Canada Zinc Metals since 2005 has identified a significant body of baritic-zinc-lead SEDEX mineralization (Cardiac Creek deposit). The deposit is hosted by variably siliceous, fine grained clastic rocks of the Middle to Late Devonian ‘Gunsteel’ formation. The Company has outlined a NI 43-101 compliant inferred resource of 23.6 million tonnes grading 7.6% zinc, 1.5% lead and 13.0 g/t silver (at a 5% zinc cut off grade).
Two similar deposits, Cirque and Cirque South Cirque, located some 20 km northwest of Akie and owned under a joint venture by Teck Resources and Korea Zinc, are also hosted by Gunsteel rocks and have a combined geologic inventory in excess of 50 million tonnes (not 43-101 compliant) grading approximately 10% combined zinc + lead.
In addition to the Akie property, Canada Zinc Metals Corp. controls a large contiguous group of claims which comprise the Kechika Regional project. These claims are underlain by geology identical to that on the Akie property (Cardiac Creek deposit) and Cirque. This project includes the 100% owned Mt. Alcock property, which has yielded a historic drill intercept of 8.8 metres grading 9.3% zinc+lead, numerous zinc-lead-barite occurrences, and several regional base metal anomalies.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.
ON BEHALF OF THE BOARD OF DIRECTORS
CANADA ZINC METALS CORP.
PEEYUSH VARSHNEY, LL.B
CEO & CHAIRMAN