THE PRAIRIE CREEK MINE. NWT Chamber of Commerce Business Conference April 3,

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1 THE PRAIRIE CREEK MINE NWT Chamber of Commerce Business Conference April 3,

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3 Original discovery 1960 s - Discovery and underground development of Main Zone began and establishment of camp 1979 to Hunt Brothers Cadillac Exploration, mine site infrastructure setup, road to Liard Highway established, Feasibility Study completed and fully permitted Silver price collapses and Cadillac entered into bankruptcy 3 months prior to mine production 1992 to San Andreas options property and fully acquires Prairie Creek San Andreas name change to Canadian Zinc 2000 to CZN exploration and development programs Application for Operations referred to EA 2008/11 In EA process MVRB 2012/13 In final permitting process MVLWB

4 WINTER ROAD TO LIARD 3,000 FOOT AIRSTRIP 3 LEVELS OF UNDERGROUND HOLDING POND 1,000 TPD MILL ACCOMMODATIONS WORKSHOP OFFICE FUEL FARM Minesite Infrastructure valued at > $200M -

5 MEMORANDUM OF UNDERSTANDING WITH PARKS CANADA Signed July 31, 2008 and Renewed March 5, 2012 Parks Canada and Canadian Zinc agree to work collaboratively, within their respective areas of responsibility, authority and jurisdiction, to achieve their respective goals of managing the Nahanni National Park (NNPR) and operating the Prairie Creek Mine. The expanded NNPR excludes the Prairie Creek Mine and supports a balanced approach to resource development and conservation In 2009, the Parks Act was amended solely for the NNPR and for the purpose of permitting access to the Prairie Creek Mine area. Expanded Nahanni National Park Reserve Prairie Creek Park Area= 30,050 km 2 Area=300 km

6 PRAIRIE CREEK PROPERTY TENURE: 1 Mining Claim 12 Mining Leases 2 Surface Leases Total 8,218 Ha. DDEEP HOLE EXPLORATION - 6 -

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8 Vein Mineralization: 930-XC06 Footwall contact Hanging wall contact 5.9% Pb, 39.4% Zn, gpt Ag/1.9 m UNDERGROUND 930 LEVEL: X-CUT 09

9 Mining rate: ~1,350 tonnes per day. 100% Underground cut-and-fill, utilizing paste backfill Mine life of 11 years based on Proven & Probable Reserves only Upgrading Inferred resources as mining progresses 970 Portal 930 Portal 870 Portal - 9 -

10 DMS plant at front-end of mill removes ~27% of waste dilution Milling rate: ~1,000 tonnes per day, crush/grind/flotation Estimated recoveries: 75% for zinc, 88% for lead and 92% for silver Installation of paste backfill plant at back-end of mill Utilizes recirculated underground water from the Water Storage Pond

11 Waste Management Approximately 27% of mine rock is removed from ore by the DMS Plant, reports either to Waste Rock Pile or Paste Backfill plant Waste rock is stored safely in waste rock storage area on surface, no ARD issues 100% of tailings are processed through the Paste Backfill plant and returned underground for final disposal No tailings pond or mine legacy issues

12 Utilizes existing facilities Utilizes local mine water for process Recirculates process water Volume of treated effluent discharge is directly proportional to the volume of the receiving environment in order to Maintain balance to the ecosystem. Water Treatment Plant Harrison Creek Gabions Flood Protection Dike Polishing Pond Tank Farm Berm Catchment Pond Control

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15 PRAIRIE CREEK MINE : DIESEL FUEL Prairie Creek Mine: Fuel Consumption Estimate 2008(Litres/year) Mill & Surface Equipment 478,150 Mine Equipment 500,000 Total Accessory Fuel Consumption 978,150 Power Plant Fuel 7,138,932 Grand Total Annual Site Fuel Consumption 8,117,082 Delivered Fuel Cost $1.25 Total Annual Fuel Cost $10,146,352 EXISTING FUEL STORAGE (Litres) Four Existing Tanks in engineered site 6,804,656

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19 Ice Bridge

20 Prairie Creek to Fort Nelson (488 km)

21 25,000,000 Transportation Costs (Winter Road Access) Annual Establishment of access road Annual Establishment of access road Annual Maintenance cost of access road Total Estimated trucking costs (to Fort Nelson) Total Estimated rail costs (Vancouver wharves) $4.3M $1.4M $1.9M $115/t con $100/t con Life of mine road expenditures (11 years) Concentrate Tonnes (Dry) 140, , ,000 80,000 60,000 40,000 20,000 Concentrate Production Production Year Zinc Oxide (not produced) Zinc Sulphide Pb Oxide Pb Sulphide 20,000,000 Initial construction 15,000,000 Winter road installation 10,000,000 Winter road maintenance 5,000,000 -

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23 CANADIAN ZINC CORPORATION PERMITTING SUMMARY (since year 2000) Permit Time (yrs) Phase 1 Drilling LUP 1.0 Phase 2 Drilling LUP 0.8 UG Water Licence& LUP 5.0 Cat camp cleanup LUP 2.0 Access Road LUP 2.0 Phase 3 Drilling LUP 2.0 Permitting Road Water Licence 1.0 Operational Permits

24 Canadian Zinc Corporation Direct Permiting Expenses related to Operations Applications since Total Legal 20, , , , , , , Consultants 344, , , , , , ,497, Environmental 33, , , , Water Treatment 171, , , , , ,544, Winter Road 68, , , , , Fish Habitat/Wildlife 81, , , , Air Monitoring/Plant Studies 128, , , , , Other Expenses 3, , , , , , Total 641, , , , ,209, , ,438,071.63

25 After a four-year EA the Review Board stated in it s report that the proposed Prairie Creek Mine development is not likely to cause significant adverse impacts on the environment or to be a cause of significant public concern. The proposed development of the Prairie Creek Project is now in the permitting stage under the Mackenzie Valley Land and Water Board. Date February 2012 May 2012 May 2012 September 2012 November 16, 2012 November 21 23, 2012 Jan. 29 Feb 1, 2013 March 15, 2013 Mid-2013??? Event Comprehensive Project Description submitted Work Plan published Class B Water License, New Mine Decline Permit and Road LUP issued Work Plan Revised CZN responds to Water Board Information Requests Technical Sessions Public Hearings Draft Water Licence and LUP circulated for comment FINAL DECISION AND WATER LICENCE ISSUED from AANDC Minister

26 Capital ($M) Capital Cost Description Year 1 Year 2 Total Mine Pre-Development (ramp access) Mine Equipment (trackless) Process Plant Upgrade (electrics, pumps) DMS Plant & Paste Plant Storage Buildings (site storage, transfer facilities etc) New Camp (120 man camp facility) Directs (Labour, process equipment, piping etc) Indirects (EPCM, construction, catering, freight etc.) Owner's Cost (incl reclamation) Various Other (fills, spares etc) Total Pre-Production Capital Costs (pre-contingency) Contingency Total Pre-Production Capital Costs (post-contingency) Working Capital (includes $7M contingency) intended level of accuracy of estimates are +/- 20%

27 Operating costs in a typical year Metal prices reflect consensus opinion of increasing lead and zinc prices in the Medium term, declining to long term values Transportation Costs (Winter Road Access) Annual Establishment of access road Annual Establishment of access road Annual Maintenance cost of access road Total Estimated trucking costs (to Fort Nelson) Total Estimated rail costs (Vancouver wharves) $4.3M $1.4M $1.9M $115/t con $100/t con Yr 5 Operating Costs per Tonne Ore Mined Base Metal Price Forecast ( Base Case ) Long Term Zinc ($/lb) $1.20 $1.20 $1.00 Lead ($/lb) $1.20 $1.20 $1.00 Silver ($/oz) $28.00 $28.00 $26.00 C$:US$ exchange rate: C$1/US$ Figures are estimated using Q dollars Operating Cost Breakdown per year $60 $37 Processing Mining $45,600,000 $26,300,000 Labour costs excl transport Transportation costs $24 $11 $72 G&A Site Surface Transportation $30,100,000 Operating costs excl labour and transport

28 50.0% Sensitivity Chart IRR (%) 45.0% 40.0% 35.0% 30.0% Zinc Price Lead Price Silver Price Capital Costs Operating Costs 25.0% 85% 90% 95% 100% 105% 110% 115% Variance (%) Financial Analysis Average annual EBITDA $66M Pre-tax NPV using a 8% discount rate $253M Pre-tax IRR 40.4% Pre-tax payback period 3 years

29 Funding to address skills shortage Commitment to continue the Mineral Exploration Tax Credit $53 billion in Building Canada Plan with focus on infrastructure

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31 Fort Simpson Office

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33 Impact Benefits Agreements signed in 2011 support local First Nations Communities by enabling them to benefit and participate in an operating Prairie Creek Mine Fort Simpson is located about 200 km from the mine and is the largest community in the Dehcho Region Fort Simpson (LKFN Band) Nahanni Butte (NDDB Band) Nahanni Butte is the closest community to the mine (90 km) and is near the mine road haulage route

34 Mixed Messages

35 NAEC Highlights: Officially started March 20 th, 2013 Members to include: Nahanni Butte Dene Band, Liidlii Kue First Nation, Jean Marie River First Nation, Acho Dene Koe First Nation, and Sambaa K e Dene Band Maximised the socio-economic opportunities with the Prairie Creek Mine Participant with the Federally funded $4.2 million More Than A Silver Lining skills training to employment program Initial funding by Each Member, GNWT ITI, Canadian Zinc Interest by CanNor to fund NAEC economic capacity and task readiness plan

36 CZN signed a Socio-Economic Agreement with the Government of the Northwest Territories in August 2011 Bob McLeod, Premier NWT, former Minister of Industry, Tourism and Investment: The signing of this Socio-Economic Agreement is a significant step in moving the process forward towards bringing the Prairie Creek Mine into operation, and that will translate into economic opportunities for Dehcho residents. Jackson Lafferty, Minister of Education, Culture and Employment: This is an excellent opportunity for Northerners to benefit from meaningful jobs and training, particularly in the Dehcho. I commend Canadian Zinc for their commitment to northerners and look forward to many job opportunities becoming available as a result of this project.

37 THE LIARD HIGHWAY August 2012: Canadian Zinc and the GNWT Ministry of Transportation announced the signing of a Memorandum of Understanding, to ensure effective co-operation related to the public transportation system in the Prairie Creek Mine project area of the Northwest Territories

38 MORE THAN A SILVER LINING PARTNERSHIP INCLUDES: Human Resources and Skills Development Canada Canadian Northern Economic Development Agency

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41 After use of accumulated tax losses, annual corporate income taxes could be in the range of: NWT - $3.5 million Federal - $4.5 million ****DEVOLUTION BENEFITS**** Use of Local Suppliers: CZN estimates annual expenditures using local businesses of $21.5 million each year.

42 Employment 220 full time + contractors Annual payroll approx. $25 million; NWT residents: Staff Number Est. Annual Payroll NWT Income Taxes Federal Income Taxes First Nations 33 $3,630,000 $325,000 $750,000 Other Residents 44 $4,840,000 $435,000 $1,000,000 TOTAL 77 $8,470,000 $760,000 $1,750,000 NWT income taxes total $10 million over first 14 years

43 Several zinc and lead mines are expected to close as reserves are depleted Capacity closures by 2017: Zinc: 1.9Mt Lead: 0.5Mt Not enough supply coming on stream from new projects New projects by 2017: Zinc: 800kt Lead: 150kt Should lead to decreasing warehouse inventories Source: Xstrata -43-

44 Global zinc demand to grow ~4% in coming years, driven by strong demand in the developing countries 5.8% annually in developing countries 1.5% annually in mature economies Global lead demand also set for strong growth Growth rate of more than 4% driven by China and other developing countries Strong growth in lead-acid batteries (~80% of total lead consumption) driven by robust output of cars, e-bikes, motorbikes as well as by the large replacement sectors of these vehicles Source: Xstrata

45 PRAIRIE CREEK MINE: 85 YEARS SINCE DISCOVERY, AN OPPORTUNITY WAITING TO HAPPEN