Norzinc Ltd. (NORZF)

[DTGoody]

Canadian Zinc Corp. (Toronto: CZN) (OTCBB: CZICF)
Price: $0.37
www.canadianzinc.com

Our new stock suggestion is Canadian Zinc Corp. currently on the Toronto exchange at $0.37 and on the OTCBB exchange at $0.358.

When the Hunt brothers attempted to corner the silver market in 1980, driving the price of silver up to $50 per ounce, they were quietly getting ready to open their own silver mine. The mine the Hunt brothers were getting ready to open is called Prairie Creek. It was explored, developed and brought almost to completion, but never operated. After Federal Reserve Chairman Paul Volcker raised interest rates to 20% and saved America from the inflationary crisis it was about to experience, the price of silver collapsed. The Hunt brothers were forced to file for bankruptcy and Prairie Creek was placed into receivership.

CZN now owns the rights to the Prairie Creek Silver, Lead & Zinc mine in Canada. CZN’s long-term aim is to bring the 100%-owned Prairie Creek Mine in the Mackenzie Mountains of the Northwest Territories into production at the earliest possible date. The mine, which has a fascinating 25 year history, is a silver and base metals property already in the advanced stages of development, with substantial resources of high-grade silver, zinc, and lead.

The Prairie Creek Mine is partially developed with an existing 1,000 tonne per day mill and related infrastructure. There are still fresh paint signs on the walls from the Hunt brothers in the 1980s. In fact, in one of the bathrooms, you can see where the tile people suddenly stopped working and left all the tools behind when the Hunt brothers were forced to abandon the project.

In 2006 and 2007, CZN carried out major programs at Prairie Creek including driving a new internal decline approximately 600 metres long which enabled a significant underground exploration and infill drilling program to occur. A total of $18.7 million was invested in Prairie Creek in 2006 and 2007.

A Technical Report dated October 12, 2007 indicates that the Prairie Creek Property hosts Measured and Indicated Resources of 5,840,329 tonnes grading 10.71% zinc, 9.90% lead, 161.12 grams silver per tonne and 0.326% copper. In addition, the report confirms a large Inferred Resource of 5,541,576 tonnes grading 13.53% zinc, 11.43% lead, 215 grams per tonne silver and 0.514% copper and additional exploration potential.

The Measured and Indicated Resource is now capable of supporting a mine life of at least 20 years at the planned 600 - 1,200 tonnes per day production rate. Although CZN holds permits for the exploration and development of the Prairie Creek Property, CZN does not have all the permits necessary to operate the mine. Recently, CZN applied to the Mackenzie Valley Land and Water Board for permits that will allow the operation of the mine.

Having a mill that is 90% complete and machinery that is still in good working condition gives CZN a tremendous advantage in getting this mine up and running. It would cost well over $100 million in today's dollars to build what they already have! The main thing holding CZN back from taking this property into production is the environmental impact board which should have a decision made by March 2011.

CZN also holds a 17% interest in Vatukoula Gold Mines plc. The Vatukoula Gold Mine located in Fiji recovered 38,402 ounces of gold during the nine months ended May 31, 2010. Vatukoula trades on the London Stock Exchange under ticker symbol VGM. CZN's shares in VGM are currently worth $18.2 million Canadian dollars.

CZN has 125,150,563 million shares outstanding giving it a market cap at $0.37 of $46.3 million Canadian dollars making it a truly undervalued situation. As of March 31, 2010, CZN had cash of $4.956 million, short term investments of $1.687 million, and no debt. On July 1, 2010, it was announced that CZN raised $2.5 million in a private placement at $0.40 per share.

If we combine CZN's cash and short-term investments with the recent private placement and estimate that CZN has burned around $1 million since the end of the 1Q, CZN probably has a cash position right now of somewhere around $8.1 million.

If we take CZN's current market cap of $46.3 million and subtract an estimated cash position of $8.1 million and the value of their 17% stake in VGM of $18.2 million, CZN’s Prairie Creek Property is currently being valued at only $20 million!

Remember, Prairie Creek already has about $100 million in infrastructure in place from the Hunt brothers' efforts and CZN has already spent another $18.7 million on exploration.

CZN plans to mine not only silver but also zinc. Because of recent gains in zinc prices, the U.S. government is now looking for ways to make coins without zinc. Congressman Ron Paul recently said, "We could not maintain the gold standard nor the silver standard. We could not maintain the copper standard, and now we cannot even maintain the zinc standard, paper money inevitably breeds inflation and destroys the value of currency.”

Sprott Asset Management is a major investor in CZN. As of December 31, 2009, they reported shared voting power of 17,652,033 shares. Sprott, just like CZN, is also a major shareholder in VGM.

NIA considers CZN to be a once in a lifetime opportunity to prosper during the upcoming hyperinflationary crisis.

Our legal disclaimer: http://inflation.us/legaldisclaimer.html