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ZincX Resources Announces Tongling Non-Ferrous Metals to Participate in Funding the 2020 Drill Program at Akie

Vancouver, British Columbia, Canada – Monday, April 6, 2020 – ZincX Resources Corp. (“ZincX Resources” or the “Company”, TSX Venture Exchange: ZNX, FRA: M9R) is pleased to announce that its largest shareholder, Tongling Non-Ferrous Metals of China (Tongling), has agreed to participate in the funding of a drill program in 2020 on the Akie Property. The program is intended to provide new drill core for advanced metallurgical testing that Tongling plans to conduct after the conclusion of the exploration season.

The Company has been in regular communication with Tongling since a meeting held in Vancouver in July 2019. The Company’s technical team and its advisors have worked with Tongling to design a work program and agreement for the upcoming season that will have Tongling conduct its own metallurgical/processing studies in China to be in addition to the metallurgical work conducted and reported by the Company to date.

The Company is in discussion and in general agreement with Tongling to convert the proceeds, which have already been advanced to the Company, into shares at a price of 30 cents per share – a 400% premium to the Company's current share price. Tongling would thus be increasing its involvement and investment in the Company by $1.398 million.

Tongling had previously purchased shares of the Company through two large private placements and an exercise of warrants. Tongling currently owns a total of 48,636,224 common shares representing a 28.55% equity position in ZincX Resources and is the Company’s largest strategic investor.

Peeyush Varshney, CEO of the Company, stated: "We have had a long-standing and mutually beneficial relationship with Tongling and have greatly valued their investment in the Company starting in mid-2009. They have provided guidance and technical expertise over the years which have helped shape exploration at the Akie Project. Today we announce an increased level of participation which is most welcome in these very challenging global market conditions.

Until recently, Tongling had been focused on bringing the Mirador Project in Ecuador into full production since its acquisition in 2010. We now again have their attention and support in our efforts to advance the significant value and merit of the Cardiac Creek deposit. To have the support and increasing interest of one of the world's premier base metal companies is a great advantage for the Company.

Tongling is thoroughly familiar with the progress to-date on the Akie property, including the 2017 metallurgical test program and the robust and positive results from the 2018 PEA. Tongling last toured the Akie property in 2018 and to this day recognizes the inherent value of the Company's significant prospective land package and the potential long-term district development opportunity. We are encouraged by the increased engagement with Tongling and look forward to working closely with them this upcoming season.

2020 Drill Program:

The planned 2020 drill program will consist of three holes totalling approximately 2,000 metres of drilling with a primary objective of acquiring mineralised drill core sample material for advanced metallurgical testing.  The holes will target specific areas of the deposit that will provide mineralised sample material representative of the deposit across its strike and width. This material will be used to further investigate the metallurgical response of the mineralisation with a focus on enhancing the recoveries for both zinc and lead into high-grade concentrates; using state-of-the-art metallurgical testing at Tongling’s laboratories.

Representative intervals from the 2020 drill program will be selected from the 3 drill holes. Individual drill hole composites will be generated using half of the diamond drill core. Hanging wall and footwall dilution will be included in each composite in order to simulate mined material. From these individual composites a global composite will be constructed. The other half of the drill core will be submitted for conventional assay as per standard procedure for Akie drilling.

ZincX Resources successfully demonstrated positive metallurgical recoveries in its extensive 2017 metallurgical program. Highlights from that program included:

  • Flotation testing on the global composite indicated that a conventional reagent scheme produced clean, marketable concentrates
  • Zinc Concentrate: Zinc was 89% recovered into a concentrate grading 52.4%
  • Lead Concentrate: Lead was 46% recovered into a concentrate grading 45%
  • Saleable concentrates can be produced for both Zn and Pb
  • No potential impurity or penalty elements were identified in the concentrates

ZincX Resources will manage the 2020 drill program on behalf of Tongling and will follow strict, industry standard QA/QC guidelines. Pulverized blanks, duplicate samples and independently prepared laboratory standards will be used. The blanks, standards or duplicate samples will be inserted into the sample stream at intervals of every 10 samples. The assay lab will also apply their own QA/QC procedures by systematically inserting standards, blanks and duplicates into sample batches. Approximately 10% of all the samples submitted to the assay lab will be forwarded to an accredited referee lab for check assay purposes.

Tongling has indicated a desire to send a technical delegation to visit the project site to inspect the drilling and give guidance to the sampling to create the metallurgical composites.

About Tongling Non-Ferrous Metals Group Co. Ltd.:

Tongling Nonferrous Metals Group Holdings Company Limited is a state-owned enterprise involved in mining and smelting copper and other non-ferrous metals. It was founded in 1949 in Tongling, Anhui, China and the first mine was put into production in 1952. Over the past 60 years Tongling has grown to a large-scale, diverse, fully integrated mining and smelting enterprise engaged in mining, mineral processing, smelting and refining of copper, lead, zinc, gold, silver and other nonferrous metals. The subsidiary and listed company, Tongling Nonferrous Metals Group Company Limited, was established in 1992 and listed on the main board of the Shenzhen Stock Exchange in 1996.

Tongling has established economic, technical and trade cooperation relationships with more than 30 countries and regions around the world. Its products are exported to over 10 countries including  Japan, Germany, United States, and Singapore. The corporation also invests in resource exploration and development in many countries such as Canada, Ecuador and Chile. The Company's main products include cathode copper, gold, silver, copper wire, copper strip and copper foil, among others. The high purity cathode copper with the brand name of "Tongguan" is registered with the London Metal Exchange (LME) while the silver ingot with the same brand is registered with the London Bullion Market Association (LBMA).

ZincX Resources previously reported that Mr. Hu Xinfu, Vice-President, Deputy General Manager of Tongling Nonferrous Metals Group Holding Company was appointed to the Board of Directors and sits as an independent director. Mr. Hu Xinfu is in charge of acquisition and exploitation of mineral resources both in domestic China and abroad, and is also responsible for production safety and environmental protection for Tongling.

Tongling has other mining interests outside China; including the Mirador copper project in Ecuador which was acquired in 2010 by the CAN$678 million buyout of TSX listed Corriente Resources. The Tonglingā€led Chinese consortium put the US$1.4 billion Mirador copper mine into production in 2019.

The Akie Zn-Pb-Ag Project

The 100% owned Akie property is situated within the Kechika Trough, the southernmost area of the regionally extensive Paleozoic Selwyn Basin and 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 ZincX Resources since 2005 has identified a significant body of baritic-zinc-lead SEDEX mineralization known as the Cardiac Creek deposit. The deposit is hosted by siliceous, carbonaceous, fine-grained clastic rocks of the Middle to Late Devonian Gunsteel Formation.

The Company updated the estimate of mineral resources at Cardiac Creek in 2018, as follows:

5% Zinc Cut-Off Grade Contained Metal:
Category Tonnes
(million)
Zn (%) Pb (%) Ag (g/t) Zn (B lbs) Pb (B lbs) Ag (M oz)
Indicated 22.7 8.32 1.61 14.1 4.162 0.804 10.3
Inferred 7.5 7.04 1.24 12.0 1.169 0.205 2.9

The Company announced robust positive results from the 2018 Preliminary Economic Assessment (PEA). The PEA envisages a conventional underground mine and concentrator operation with an average production rate of 4,000 tonnes per day. The mine will have an 18-year life with potential to extend the life-of-mine (LOM) through resource expansion at depth. Key parameters for the PEA are as follows:

Parameter Base Case1
Tonnes Mined 25.8 Mt
Mined Head Grades 7.6% Zn; 1.5% Pb; 13.08 g/t Ag
Tonnes Milled 19.7 Mt
Milled Head Grades (after DMS2 upgrade) 10.0% Zn; 1.9% Pb; 17.17 g/t Ag
Total Payable Metal (LOM) $3,960M3
Initial CAPEX $302.3M including $45.7M contingency
LOM Total CAPEX $617.9M including $58.5M contingency
All-in Total OPEX $102.4 per tonne milled
Pre-Tax NPV7% $649M
Pre-Tax IRR 35%
Pre-Tax Payback 2.6 years
After-Tax NPV7% $401M
After-Tax IRR 27%
After-Tax Payback 3.2 years

1. The base case used metal prices are calculated from the 3 year trailing average coupled with two year forward projection of the average price; and are: US$1.21/lb for zinc, US$1.00/lb for lead and US$16.95 for silver. A CDN$/US$ exchange rate of 0.77 was used. The NPV discount rate is 7%. 2. DMS = dense media separation. 3. All dollar amounts expressed in Canadian dollars.

The PEA is considered preliminary in nature and includes mineral resources, including inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves have not yet demonstrated economic viability. Due to the uncertainty that may be attached to mineral resources, it cannot be assumed that all or any part of a mineral resource will be upgraded to mineral reserves. Therefore, there is no certainty that the results concluded in the PEA will be realized.

Kechika Regional Project

In addition to the Akie Project, the Company owns 100% of eight of eleven large, contiguous property blocks that comprise the Kechika Regional Project including the advanced Mt. Alcock prospect. The Kechika Regional Project also includes the Pie, Yuen and Cirque East properties which the Company maintains a significant 49% interest with partners Teck Resources Limited (TSX: TECK.B) and Korea Zinc Co. Ltd holding 51%. These properties collectively extend northwest from the Akie property for approximately 140 kilometres covering the highly prospective Gunsteel Formation shale; the main host rock for known SEDEX zinc-lead-silver deposits in the Kechika Trough of northeastern British Columbia. These projects are located approximately 260 kilometres north northwest of the town of Mackenzie, British Columbia, Canada.

Ken MacDonald P.Geo., Vice President of Exploration for the Company, is the designated Qualified Person as defined by National Instrument 43-101 and is responsible for the technical information contained in this release. Mike Makarenko P.Eng, JDS Energy and Mining, is the designated Qualified Person as defined by National Instrument 43-101 and is responsible for the PEA technical information contained in this release.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.
ON BEHALF OF THE BOARD OF DIRECTORS

ZINCX RESOURCES CORP.

“PEEYUSH VARSHNEY”

----------------------------------------------
pEEYUSH vARSHNEY, LL.B
CEO & CHAIRMAN

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