Zazu Metals Corporation announce that the Alaska Industrial Development and Export Agency (“AIDEA”) approved a cost reimbursement agreement with Zazu today. This enables AIDEA to initiate due diligence on the proposed expansion of the Delong Mountain Transportation System (“DMTS”). This proposed expansion will facilitate both the development of the Lik deposit, and handle future concentrate production from the deposit.
The DMTS road and port system currently handles all concentrate produced by the Red Dog zinc mine of Teck (“Teck”). The Lik deposit is a zinc – lead – silver deposit located 22km from the Red Dog mine in northwestern Alaska. Lik is one of the largest undeveloped zinc deposits in the western world.
AIDEA, as owners of the DMTS, will evaluate their possible role in the two parts of the proposed expansion project: the financing of a spur road connecting the Lik deposit to the DMTS, and the financing of additional storage and handling facilities at the port. Under the terms of the agreement Zazu will reimburse AIDEA for their cost of conducting certain Pre-Feasibility Activities as part of these evaluation processes.
Prior to the AIDEA agreement Zazu received a letter of Non Objection from the Northwest Arctic Borough (NWAB). In this letter, the NWAB formally acknowledges their awareness of the Lik deposit, and that they have no objection to the project at this time.
In May of this year, Zazu moved the Lik deposit into early development stage with the updated resource estimate completed by Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA). Their estimate of Lik South is an Indicated Resource of 20.66mm short tons at 8.08% zinc, 2.62% lead and 1.54 oz/ton silver; plus an Inferred Resource of 1.36mm short tons at 6.80% zinc, 2.12% lead and 1.02 oz/ton silver, at a 5% cut off. Lik North is an additional 5.71mm short tons at 9.65% zinc, 3.25% lead and 1.48 oz/ton silver of Inferred Resource at a 7% cut off grade.
Zazu is currently conducting a Preliminary Assessment Study on the Lik deposit through Scott Wilson RPA. This study is expected to be concluded shortly.
Zazu is in the enviable position of having a limited number of shares outstanding, no debt, and a strong treasury. Teck is a 50% joint venture partner in the Lik deposit, however Zazu has the exclusive right to obtain 80% of the property by meeting certain spending commitments by 2018.
The part of this news release pertaining to the Mineral Resource estimate was reviewed by Dr. William E. Roscoe, P.Eng., a Principal Consulting Geologist with Scott Wilson RPA, who is a qualified person as defined by National Instrument 43-101.