$NORZF : NorZinc — Independent Economic Analysis

Long-Term Price Case$24/oz. Ag, $1.10/lb. Zn, $1.00/lb. Pb
ProjectPrairie Creek
Mineral Reserves186,795,000 AgEq ozs.
Shares Outstanding369,700,000
Market Cap$24,030,500
Average Annual Production10,829,166 AgEq ozs.
Recovery87% Ag, 88% Pb, 83%, Zn
LoM15 Years
Payable Product162,437,490 AgEq ozs.
True All-in Cost (TAIC) $21.86/oz.
Gross Revenue$3,898,499,770
Smelter Deductions($454,000,000)
TCRC + Penalties($432,800,000)
Gross Income$3,011,699,770
Total Operating Cost($1,797,500,000)
Operating Profit$1,214,199,770
Income Taxes + Royalties($469,895,310)
Total Capital Costs ($395,900,000)
Net Income$348,404,460
Net Profit Margin9%
Absolute Cost Structure (ACS)91%
MTQ Score0.1
True Value$0.94/sh.
True Value Discount (TVD)93%
Cash Flow Multiple5x
Annual Cash Flow$23,174,415
Future Market Cap$115,872,075
Future Market Cap Growth382%
Target$0.31/sh.

Notes: All Values in U.S. Dollars

NorZinc is at the high end of the Absolute Cost Structure curve and the low end of the Net Profit Margin curve. In other words, Prairie Creek is a Project that will require substantially higher Silver, Lead and Zinc prices in order to be viable.

In a raging silver bull market, we think shares could appreciate by as much as 382%, which assumes shares will trade at approximately 5x future net annual cash flows.

Fahy Capital Management is not an investor in NorZinc.