press release

ScoZinc Announces Improved Results of Its Scotia Mine 2021 Pre-Feasibility Study: Pre-Tax NPV of C$174M and IRR of 69%

2021-11-16

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Halifax, Nova Scotia--(Newsfile Corp. - November 16, 2021) - ScoZinc Mining Ltd. (TSXV: SZM) ("ScoZinc" or the "Company") is pleased to announce the results of its updated Pre-Feasibility Study (the "2021 PFS") including its new Gypsum NI 43-101 Mineral Reserve Estimate ("2020 Mineral Reserve Estimate") for its wholly-owned and permitted Scotia Mine ("Scotia Mine" or the "Project"), located in Nova Scotia, Canada. The 2021 PFS was prepared in collaboration with the independent engineering firm MineTech International Limited, adopting the 2020 Pre-Feasibility Study completed by Ausenco Engineering Canada Inc., MineTech International Limited, SRK Consulting (U.S.), Inc., and Terrane Geoscience Inc.

Highlights of the 2021 PFS are tabled below, with additional details of the NI 43-101 Technical Report ("2021 PFS") to be filed on www.sedar.comunder ScoZinc's profile within the next 45 days.

Table 1: Pre-Feasibility Study Highlights

All dollar amounts are expressed in Canadian Dollars unless otherwise noted 1 After Lead credits deducted 2All-In-Sustaining-Costs ("AISC") are C1 Costs plus Sustaining Capital and Financing Costs

The President and CEO, Mr. Mark Haywood, commented: "_We are very excited to deliver the results of our updated Scotia Mine PFS which includes updated commodity prices, treatment charges, exchange rates and the compelling addition to the Project's economics of the Gypsum by-product revenue stream. The Project's economics are 12% more robust than determined by the 2020 PFS, with cumulative free cash flow of $55 million in the first 3 years alone, and low capital requirements of approximately $30M._

The Project is set to produce high quality Zinc and Lead concentrates for over 14 years, at low operating costs, via conventional open pit mining methods, with a steady ore processing rate of 2,700 tonnes per day. Through detailed planning and analyses, we believe the technical team have resolved many of the mine's historical bottlenecks, perceived water issues, and poor performance issues to develop an effective, low-risk development and life of mine production plan.

Importantly, the PFS shows that commercial Zinc and Lead concentrate and Gypsum production can be achieved within 9 to 12 months of project financing of approximately $30M, with a resulting average annual cash flow of $18M. The extensive facilities already in place on site, combined with the short pre-stripping period, enable the Scotia Mine to potentially demonstrate a free cash flow of $19M in the first year of commercial production.

ScoZinc is also of the view that there are additional opportunities to further improve the Project's economics and extend the operation's 14-year mine life including on-strike mineral development and nearby regional targets for potential future mill feed."

A summary of the updated Pre-Feasibility Study is provided below. The complete NI 43-101 Technical Report will be provided on the Company's website at www.ScoZinc.comonce the report has been filed on SEDAR.

Location, Ownership & History

The Scotia Mine consists of a fully permitted mine and mill which are 100% owned by ScoZinc. The Scotia Mine is located at approximately 45°02′ North, 63°21′ West, or 62 kilometres northeast of Halifax, Nova Scotia, in the Halifax Regional Municipality. Year-round access to the Project is by paved highway roads and is approximately 15 kilometres off the Nova Scotia provincial highway along Route #224. The Halifax International Airport is located 33 kilometres southwest of the mine site. The Project consists of 648 hectares of mineral rights in the form of three contiguous mineral leases, including land with exploration potential for zinc and lead mineralization. ScoZinc also owns real estate property of 712.5 hectares, which includes the mineral leases and adjoining areas.

In February 2011, Selwyn Resources Limited ("Selwyn") purchased ScoZinc Limited and all of its assets, including the Scotia Mine and ScoZinc's exploration claims, for $10 million less a deduction relating to increased reclamation bonding requirements that were being determined at the time of the acquisition. Selwyn changed its name to ScoZinc Mining Ltd., and owns 100% of the ScoZinc Limited subsidiary, which in turn holds the mineral rights to the Main and Getty Zones, the mining rights and surface rights (real property rights) for the Scotia Mine deposit and an environmental assessment (environmental registration) for the Scotia Mine.

ScoZinc also currently holds five exploration licenses covering 41 claims in the immediate vicinity of the Scotia Mine Deposit. Each individual claim covers an area of approximately forty acres (16.2 hectares). In total, the 41 claims cover approximately 664 hectares (1,641 acres). These licenses are located along strike from the Scotia Mine Deposit and include favourable host rocks similar to that at the mine site.

Geology and Mineralization

The Scotia Mine Deposit consists of three main zones of mineralization referred to as the Main (formerly Gays River deposit), Getty and Northeast Zones. The Main zone lies along the southside of the Gays River main branch, immediately east of the confluence with the Gays River south branch. The Getty zone lies just northwest of the Main and North-East zones on the western side of Gays River. The two zones are separated by less than one kilometre.

The Gays River Formation mineralization has long been considered a Mississippi Valley-type lead-zinc deposit. This type of deposit is carbonate-hosted, classified as a typical open space filling type, and hosted in a dolomitized limestone. The limestone developed as a carbonate build-upon an irregular pre-Carboniferous basement topographic high where conditions allowed for growth of reef-building organisms.

The zinc/lead-bearing Gays River Formation trends in an east-north east direction across the Property. Locally, the mineralisation dips up to 45º on average, and up to vertical in places, to the north-northwest which is the depositional slope of the front of the Gays River reef unit. The dip tends to be horizontal in the back reef area (south of the main trend). The mineralisation is present as sphalerite and galena and grades from massive Pb-Zn mineralized material in the fore reef to finely disseminated, lower grade material in the back reef. In the mine area, the Gays River Formation is overlain either by the evaporites of the Carroll's Corner Formation and/or overburden.

Exploration and Data Management

The Scotia Mine has extensive diamond drilling and blast-hole drilling on a large portion of its mining leases and associated exploration licences. A total of 1,831 holes or 121,870 metres has been drilled to date. All of the data from these holes has been included in this updated Pre-Feasibility Study and the 2020 mineral resource estimation (the "2021 MRE").

Royalties

For the Scotia Deposit, ScoZinc owns the real property covering all the defined mineral resources on the mining leases, so no royalty to any landowner is applicable. However, there is a small 25-acre portion on ScoZinc's real property that is subject to a sand, gravel and fill royalty of $1.00 per metric tonne to Gallant Aggregates. This royalty does not impact the Scotia Mine's Pre-Feasibility Study.

For the Getty deposit, ScoZinc has a 1% royalty with Globex Resources Ltd ("Globex"), which provides Globex with a 1% Gross Metal Royalty ("GMR") interest in the associated claims. Agreement terms also allows ScoZinc to purchase 50% of the GMR for $300,000. ScoZinc's Life of Mine plan indicates that such a royalty would only be applicable in the last few years of the 14-year mine life.

Nova Scotia provincial royalty of 2% also applies on all net revenue generated from the Project.

Mineral Resource Estimate

A Mineral Resource estimation update was completed in March 2021 for the Scotia Mine Deposit, including the Main, Getty and Northeast Zones ("2021 MRE"). The purpose was to add a Gypsum resource to the already existing base metal (Lead & Zinc) resource calculated in the 2019 Mineral Resource Estimate ("2019 MRE"). No changes were made to the base metal resource from the 2019 MRE and remain the same for the 2021 MRE.

The mineral resources for the Scotia Mine Deposit have been classified as Measured, Indicated and Inferred categories based on CIM Definition Standards in accordance with NI 43-101 reporting guidelines, and are reported with respect to cut-off values calculated using the assumed processing costs and recoveries, and metal prices. The resource is also constrained by an optimized (WhittleTM) pit shell, which is based on optimistic metal prices, in order to demonstrate that the defined resources have reasonable prospects of eventual economic extraction, which is a CIM Definition Standards criterion. All classification categories (Measured, Indicated and Inferred) were considered in the resource pit optimization.

Gypsum mineral resources were estimated using the outlined gypsum/anhydrite geology constrained by the Life of Mine (LOM) design pit outlined for the base metal mining. Drill holes were chosen to be representative of the Gypsum over the geographic area planned for open pit mining.

Gypsum waste rock constrained inside the LOM pit was considered for conversion to Gypsum mineral resources. No Gypsum outside the LOM pit was included or considered in the calculation of the Gypsum resource, nor did it have any influence on the size and shape of the LOM pit.

The Scotia Mine Deposit mineral resource summary statement in provided in Table 2, with an effective date of 22 March 2021.

Table 2: Scotia Mine Resource Statement, 22 March 2021 - MineTech International Ltd.

| Classification | Zone | Tonnage | Zinc | Lead | ZnEq | Gypsum Tonnage | Gypsum | | | | (kt) | (%) | (%) | (%) | kt) | (%) | | | Getty | 60 | 1.38 | 1.25 | 2.58 | 0 | 0 | | Measured | Main | 4,130 | 2.57 | 1.30 | 3.81 | 1,310 | 93.0 | | (M) | North East | 130 | 3.18 | 1.88 | 4.98 | 220 | 91.9 | | | Total | 4,320 | 2.57 | 1.32 | 3.83 | 1,530 | 92.8 | | | Getty | 8,090 | 1.24 | 0.81 | 2.02 | 0 | 0 | | | Getty South | 840 | 1.58 | 0.25 | 1.82 | 0 | 0 | | Indicated | Main | 9,870 | 1.92 | 1.01 | 2.89 | 2,500 | 92.7 | | (I) | North East | 2,330 | 2.88 | 1.15 | 3.98 | 1,150 | 88.7 | | | Total | 21,130 | 1.75 | 0.92 | 2.64 | 3,650 | 91.4 | | | Getty | 8,150 | 1.24 | 0.82 | 2.03 | 0 | 0 | | | Getty South | 840 | 1.58 | 0.25 | 1.82 | 0 | 0 | | M & I | Main | 14,000 | 2.11 | 1.09 | 3.16 | 3,810 | 92.8 | | | North East | 2,460 | 2.89 | 1.19 | 4.04 | 1,370 | 89.2 | | | Total | 25,450 | 1.89 | 0.99 | 2.84 | 5,180 | 91.8 | | | Getty | 950 | 1.35 | 0.54 | 1.87 | 0 | 0 | | | Getty South | 770 | 1.53 | 0.25 | 1.77 | 0 | 0 | | Inferred | Main | 2,980 | 1.49 | 0.79 | 2.25 | 250 | 92.2 | | | North East | 310 | 2.01 | 0.74 | 2.72 | 540 | 90.7 | | | Total | 5,010 | 1.50 | 0.66 | 2.13 | 790 | 91.2 |

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into Mineral Reserves; Determination of reasonable prospects of eventual economic extraction was based on assumed prices for Zinc of US$1.35/lb, and for Lead of US$1.14/lb, a Zinc recovery of 86% and a Lead recovery of 93%, mining and processing costs varying by zone, and pit slopes of 45 degrees in rock and 22 degrees in overburden; Near surface resources are reported based on a Zinc equivalent (ZnEq) grade of 0.90% and a Gypsum grade of 80%. The ZnEq grade incorporates Zinc and Lead sales costs of US$0.19/lb and US$0.11/lb respectively, and a 2% royalty fee; and Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.

Base Metal Mineral Reserve Estimate

The Scotia Mine Base Metal Mineral Reserve Estimates are classified as either Proven Reserves or Probable Reserves and are provided in Table 3. Total Mineral Reserves are 13.66 million tonnes with a Zinc Equivalent grade of 3.09 percent. The Base Metal Reserve Estimate remains unchanged from the 2020 PFS.

Table 3: Scotia Mine Base Metal Mineral Reserve Estimates

| Mineral Zone | Classification | Tonnage (t) | Zinc Grade (%) | Lead Grade (%) | Zinc Equivalent Grade (%) | | Scotia Mine | Proven | 3,370,000 | 2.46 | 1.21 | 3.62 | | Scotia Mine | Probable | 10,290,000 | 1.88 | 1.07 | 2.91 | | Scotia Mine | Total | 13,660,000 | 2.03 | 1.10 | 3.09 |

Notes: The Base Metal Mineral Reserves are as of 6 July 2020 and based on a design cut-off grade of 1.5% ZnEq grade. Cut-off grades are based on a Zinc metal price of US$1.10/lb, recovery of 89%, a Lead metal price of US$0.95/lb, and mining recovery of 92%. Average unplanned dilution and mining recovery factors of 12% and 92%, respectively, are assumed.

Gypsum Mineral Reserve Estimate

The Scotia Mine Gypsum Mineral Reserve Estimates are classified as either Proven Reserves or Probable Reserves and are provided in Table 4. Total Mineral Reserves are 5,180,000 tonnes with a Gypsum grade of 91.8 percent.

Table 4: Scotia Mine Gypsum Mineral Reserve Estimates

Notes: 2021 Gypsum Mineral Reserves are as of 16 November 2021 and based on a non-binding offtake agreement. The LOI has be reviewed and approved by Minetech International to satisfy the requirements for converting Gypsum resources into Gypsum reserves.

Mining

The Scotia Mine deposit covers a total strike length of approximately 4 kilometres, with some surface constraints in between, and a vertical distance of approximately 120 metres. All mining is from open-pit operations with an expected mine life of approximately 14 years. Mining operations will be conducted utilizing 4 shifts, 12 hours each shift, covering 24 hours per day. The 4 shifts will be on a 4-days on, 4-days off, 4-nights on, 4-nights off rotation.

The Scotia Mine mineral resources will be extracted using conventional load and haul (truck & shovel) mining methods as determined by optimized pit designs and life-of-mine schedules. Mining operations will be completed using an owner/operator of excavators, loaders, haul trucks and ancillary support equipment as well as some rental equipment. Equipment requirements have been determined based upon required production rates and haulage cycles using equipment specifications provided by local authorized equipment suppliers and manufacturers.

The open-pits will be mined on 5-metre-high benches with double benching being utilized on the lower benches which are primarily comprised of hard rock. Drilling and blasting are only required for 40 percent of the total material mined over the life of mine plan, which accounts for all of the hard rock to be mined from the pits. The remaining 60 percent is largely comprised of overburden and has been proved to be free digging material based on past operations and will not require blasting. Drilling and blasting will be performed using contract services.

Figure 1 overleaf illustrates the ultimate open-pit and waste dump design.

[](https://orders.newsfilecorp.com/files/6904/103794_9a117ecd04974b8d_002full.jpg)

Figure 1: Ultimate Pit and Waste Dump Design

To view an enhanced version of this graphic, please visit: https://orders.newsfilecorp.com/files/6904/103794_9a117ecd04974b8d_002full.jpg

The Ultimate Pit Design was divided into 6 phases to optimize development sequences and production requirements. Waste has been subdivided into overburden, gypsum, and carbonate waste rock. Inferred resource material inside the Ultimate Pit Design has been included as carbonate waste rock and totals approximately 1,450,000 tonnes at 1.5% Zn and 0.7% Pb. Waste storage will consist of a combination of backfilling the mined pits and stockpiling in the waste dump. Using the Ultimate Pit Design and the pit phase sequencing, a Life-Of-Mine ("LOM") mining schedule was developed by month and is based on operating 24 hours/day, 365 days/year. The LOM production schedule is based on providing a mill feed of approximately 1 million tonnes per annum at an average grade of 2.03% Zinc and 1.10% Lead, which equates to a Zinc Equivalent grade of 3.09%.

The water table at the Scotia Mine is divided into two horizons: the overburden horizon and the bedrock horizon. ScoZinc plans to utilize 60 geotechnical depressurizing pumping wells, in conjunction with in-pit pumping via submersible sump pumps, to dewater the overburden horizon. The bedrock horizon will be dewatered using the existing deep well infrastructure in conjunction with in-pit temporary wells that access the underground workings. Horizontal wells will also be utilized in the karst gypsum to deal with the localized trapped water and will be allowed to drain into strategically placed in pit sumps which will then be pumped to the tailings storage facility ("TSF"). All in pit water will be pumped to the TSF. Water from the 60 depressurizing pit perimeter wells will be discharged into either a reservoir or the Gays River, however most of this water will be used as processing water in the mill. A similar setup will be utilized in the North East and Getty pits.

Metallurgy and Mineral Processing

Metallurgical data from past production data and more recent metallurgical test work is available on the carbonate hosted zinc-lead deposit. The combined data shows that the zinc and lead minerals liberate well from the host rock, resulting in relatively high metal recoveries and concentrate grades. The simple mineralogy and metallurgy present the opportunity to consistently achieve high recoveries and concentrate grades over the life of mine plan.

The process design criteria, based on historical data and plant design improvements, include overall average zinc concentrate grades of 57% with an average 86.6% recovery, and the overall average lead concentrate grade of 71% with an average 89.1% recovery. Due to the carbonate hosted deposit, the zinc and lead concentrates have very low levels of impurities or deleterious minerals, resulting in the ScoZinc concentrates to be proven to be a clean, high-ranking concentrate.

The ScoZinc concentrator plant (or Mill) was last operated in 2009 at 2,200 tonnes per day from the original name plate design of 1,500 tonnes per day using conventional crushing, grinding flotation, concentrate dewatering/drying, and rehandling loadout. After extensively reviewing all past production and incomplete engineering work, new final design work as part of the 2020 Pre-Feasibility Study has confirmed that with relatively minor upgrades to the comminution, flotation and dewatering circuits, the plant can consistently operate at 2,700 tonnes per day without major capital expansion.

Earlier from

IIROC Trading Halt - SZM 2021-11-16
ScoZinc Establishes Gypsum Offtake & Provides a Corporate Update 2021-11-01
ScoZinc Closes Fancamp Investments 2021-10-06

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