Canadian Zinc Corporation announced the financial results for the quarter ended June 30th 2009. This press release should be read in conjunction with the unaudited financial statements and notes thereto for the period ended June 30th 2009 and management's discussion & analysis for the period ended June 30th 2009 available on SEDAR at www.sedar.com.
As at June 30th 2009, the Company had cash and cash equivalents of USD 6.944 million short term investments of USD 6.038 million and marketable securities of USD 511,000. The Company also had a positive working capital balance of USD 13.374 million.
For the quarter ended June 30th 2009, the Company reported a net loss of USD 722,000 compared to a loss of USD 1.129 million for the 3 months ended June 30th 2008. For the 6 months ended June 30th 2009, the Company reported a net loss of USD 1.019 million compared to USD 1.481 million in the equivalent 2008 period. The reduced loss in 2009 was primarily attributable to the winter shutdown of the Prairie Creek Mine site, reduced overall expenditures and unrealized gains on the Company's marketable securities.
1. Expansion of Nahanni National Park
In June 2009 new legislation was enacted by the Canadian Parliament entitled "An Act to amend the Canada National Parks Act to enlarge Nahanni National Park Reserve of Canada" to provide for the expansion of Nahanni National Park which has been expanded by 30,000 square kilometers, making it the third largest National Park in Canada. The enlarged Park covers most of the South Nahanni River watershed and completely encircles the Prairie Creek Mine. However, the Mine itself and a large surrounding area of approximately 300 square kilometers specifically excluded from the Park and is not part of the expanded Park.
Section 7 of the new Act amended the Canada National Parks Act to enable the Minister of the Environment to enter into leases or licences of occupation of and easements over, public lands situated in the expansion area for the purposes of a mining access road leading to the Prairie Creek Area including the sites of storage and other facilities connected with that road. Heretofore, an access road to a mine through a National Park was not permitted under the Canada National Parks Act and the Act was amended solely for Nahanni National Park Reserve and specifically for the purpose of providing access to the Prairie Creek Mine area.
In making the expansion the Government has recognized the importance of resource development in Canada's North and the decision on the expansion of Nahanni National Park reflects a balanced approach to conservation and to potential future economic benefits that development of the Prairie Creek Mine can bring to the people of the Dehcho. Canadian Zinc welcomes the long anticipated expansion of Nahanni National Park Reserve with the exclusion of the Prairie Creek Mine area and the guarantee of access to the Mine through the enlarged Park. Canadian Zinc has agreed to manage the development of the Prairie Creek Mine so the mine does not, in its own right, negatively affect the expansion of the Nahanni Park.
Canadian Zinc believes that the Prairie Creek Mine and the enlarged Nahanni National Park can co exist and that, properly planned and managed, the enlarged Park will not interfere with the operation of the Prairie Creek Mine and similarly that the operation of the Mine will not adversely impact upon the Park or its ecological integrity.
The proposed development and operation of the Prairie Creek Project is currently undergoing environmental assessment by the Mackenzie Valley Environmental Review Board. The exclusion of the Prairie Creek Mine from the Nahanni National Park Reserve expansion area has brought clarity to the land use and policy objectives for the region and will facilitate various aspects of the environmental assessment.
2. Applications for Operating Licence/Permit and Environmental Assessment:
In May 2008, the Company applied to the Mackenzie Valley Land and Water Board for a Type "A" Water Licence and 3 Type "A" Land Use Permits; 1 for the operation of the Prairie Creek Mine and the other 2 for Transfer Facilities along the road. A detailed Project Description Report was filed with the MVLWB as part of the permit applications.
In September 2008, following its preliminary screening the MVLWB determined that the proposed development might have a significant impact on the environment and might be of public concern and referred the applications to the Mackenzie Valley Environmental Impact Review Board for Environmental Assessment. The concerns were around water quality, wildlife, damage to landscape and long term risk of contamination.
The MVEIRB issued Terms of Reference and a Work Plan for the EA on June 26th 2009. The Company is beginning the preparation of the Developer's Assessment Report to be submitted to the MVEIRB later this year. The MVEIRB has indicated that it anticipates concluding its Report of Environmental Assessment by October 2010. The MVEIRB will not be assessing construction impacts of already built structures. The MVEIRB has decided that assessment of these facilities will be restricted to the effects of their ongoing operation in combination with the effects of other construction and operations necessary for the operation of the mine.
It is likely, given the open ended nature of the Mackenzie Valley permitting process and Company's experience to date, that the environmental assessment and permitting process for the Prairie Creek Mine will extend for a considerable time.
