Highlights of the Metallurgical Test Program

• Dense Media Separation - The bench scale DMS test program was completed to assess the amenability of mineralized samples from the deposits to physical upgrading (pre-concentration) at each site. Use of DMS processing technology would provide a potential means of reducing transportation costs from mine site to the milling facility and to maximize head grade and reduce downstream processing costs.
  
  Results from pre-concentration of the samples by DMS (prior to flotation) was determined to be technically viable for semi-massive and stringer sulphide samples from the Lemarchant FW, Bobbys Pond samples and Lundberg deposit. An economic assessment of processing ores with DMS technology is in progress to determine if there is a net benefit in reducing the mass of ore to be processed compared to the loss of payable metals to the waste product. Results of the DMS testing are provided below.

Dense Media Separation Results

• Common Flotation Flowsheet - Initial bench scale batch flotation tests were designed to compare two flowsheet options: 1) a bulk Cu/Pb-Zn flotation flowsheet and 2) a sequential Cu-Pb-Zn flotation flowsheet using various reagent schemes and alternative grind specifications.
  
  Results from the initial bench scale testing indicate the sequential Cu-Pb-Zn flowsheet provided the best overall performance for the four deposits tested. Subsequent testing of the Lundberg Deposit samples indicates it is also amenable to the sequential Cu-Pb-Zn flotation flowsheet with improved grade and recoveries over previous Lundberg metallurgical testing.
  
  
• Bench Scale Batch Flotation Testing - the bench scale metallurgical test work was aimed at assessing the amenability of the mineralized samples from the five deposits to a common flotation flowsheet. The test work serves as a first stage evaluation of developing a common process flowsheet.
  
  The preliminary results from the bench scale batch flotation tests confirmed the production of selective zinc, lead and copper concentrates at marketable grades.
  
  The grade and recovery of concentrates for each deposit have been defined in the following table. These are based on bench scale batch flotation tests (as an open circuit without recycle) and process simulation of the sequential flowsheet mass balance relative to the test program, and are not representative of lock cycle or pilot testing of the proposed flowsheet.

Flotation Test Results

Economic Assessment

The metallurgical test programs are being followed-up with a Process Simulation and Cost Assessment model (AACE Class V – order of magnitude / conceptual assessment) to evaluate and identify the key factors impacting the operating economics of a centralized processing concept for the production of the base metal concentrates from the various base metal deposits in central Newfoundland .

Results from the conceptual economic assessment will be used to help optimize future exploration and development plans, by focusing on key factors that are critical to assessing the economic potential and viability of developing the central Newfoundland deposits through a centralized milling facility.

The overall research programs are partially funded by the Research & Development Corporation of Newfoundland and Labrador ("RDC") through the GeoEXPLORE Industry-led program and are scheduled to be completed in December, 2016.

Central Newfoundland Exploration Work

As part of its 2016 exploration program, Canadian Zinc is undertaking ground geophysical surveys including magnetics, gravity, electromagnetics ("EM") and borehole EM on a number of high priority Cu-Pb-Zn-Ag-Au target areas on its South Tally Pond and Tulks South properties.

At the South Tally Pond property, five priority targets in the Lemarchant Deposit area are being evaluated by ground and borehole EM and two priority targets are being evaluated at the Lost Lake prospect located 6 kilometres northeast of the Lemarchant Deposit.