Consolidated Zinc Ltd. – Significant Mineralised Areas Identified (Outside Resource)

Mapping and sampling along the Level 7 Drives in the Carola South area has returned assay results of up to 53.62% combined Zn+Pb

Carola South high grades continue over 522m strike length, immediately accessible from underground

Resource drilling has encountered visual mineralisation in hole LV8022, drilled down dip of the current resource shell and on strike to mineralisation in LV8014

Scoping Study progressing with economic modelling and metallurgical testwork

Consolidated Zinc Limited (CZL:ASX; “Consolidated Zinc” or “the company”) is pleased to present the following update outlining additional high grade zinc mineralisation identified in underground mapping and detailing drilling progress and assay results received at the Plomosas Project resource definition drilling program.

ADDITIONAL MINERALISATION IDENTIFIED

As announced to the market on 9 March 2017, significant high grade mineralisation was mapped and sampled from underground at Tres Amigos North and Carola South (Figure 1).

Carola South

Excellent assay results from Carola South have since been received and confirmed the visual assessment with grades ranging up to 53.62% combined zinc and lead (Zn+Pb) (sample 425611) and a median of 20.69% Zn+Pb within the mineralised zone. The mineral exposure extends over 522m in this area 300m south of the current Mineral Resource. Tables 1 and 2 summarise the assay statistics and highlights while Figure 2 shows the sample locations. Full details of the samples and assay results are included as Appendix 1.

14 of 40 samples within the mineralised sequence returned over 30% Zn+Pb.

Mineralisation in the Carola South area is an extension to the south of the massive sulphides previously mined by Asarco and extends the identified mineralisation by approximately 800m (Figure 1). No large scale mining was undertaken with an exploration drive developed and only occasional, minor mining from this drive when mineralisation was encountered. The Carola South exploration drive does not encounter the footwall or hanging wall contacts of the Mina Vieja Manto, which are the main areas of mineralisation occurrence.

Mineralisation here has similar attributes to the mineralised mine sequence recognised in Level 7 Deeps. Massive sulphides are oxidised in places and occur on the hanging wall to a leached marble, similar to that mapped at Level 7. Interestingly, there appears to be secondary copper staining in this area. Copper values are elevated compared to other locations and as high as 0.97% Cu (sample 425600) and a few others around the 0.25% Cu grade, (samples 425582, 425585, 425628). Elevated copper may be a response to a deep seated intrusive interpreted by recent geophysical surveys as being located in the southern area. (Figure 6).

The total length of the mineralisation that occurs within the Carola South area so far is 522m.

Figure 1. Zinc-lead mineralisation outlined and samples in the areas of Tres Amigos North and Carola South underground development. Section line A – ‘A refers to the section shown in Figure 4.

Figure 2; Sample locations and combined (Zn+Pb%) grade results for Carola South

Figure 3; Massive sulphide mineralisation in Carola South hosted in the Mina Vieja Manto (arrow length ca. 2 metres). Samples 425611 to 425613 returned 53.62%, 51.91% and 39.73% Zn+Pb% combined from this area.

Figure 4; Schematic cross section of the relationship between Juarez Limestone and Tres Amigos North

RESOURCE DEFINITION DRILLING UPDATE

Level 7 Resource Extension

Since the last update, holes LV8020 to LV8022 have been completed and assays are awaited. Table 3 provides details of the drillholes completed.

Notably LV8022 was drilled to target mineralisation at the same elevation as that encountered in LV8014 (3.51m at 11.60% Zn, 6.63% Pb, 30.8 g/t Ag). Figure 6 shows the location of these drillholes and current JORC (2012) Mineral Resource.

Visual interpretation of LV8022 core shows it intersected significant massive sulphide between 78.10m and 80.0m. Assays for this hole are pending. All these holes are outside the ore envelope and will enable the current resource to be modified and expanded.

Plans for newly identified mineral areas

Subsequent to receiving the high grade assay results from Tres Amigos North earlier this month, a series of holes has been planned to test the location of the Juarez Limestone. This is the main host to this style of mineralisation, including a massive sulphide zone of approximately 2m to 3m in thickness.

Consequently, drilling in L8.1 has been halted to enable drill testing of the Tres Amigos North area from Level 5, while a reinterpretation of the Level 7 Deeps ore zone is completed and drilling recommences.

Figure 5. Location of mineralised intervals in drillholes south and outside of the current Mineral Resource envelope.

EXPLORATION UPDATE

Geophysics

Final processing for the magnetic inversion data is in progress. This data has suggested the presence of a significant intrusion one kilometre south of Plomosas and estimated to be 700m in depth below surface. Further analysis is intended to confirm and shed more light on this interpretation.

The presence of an intrusion may help in understanding the history and style of mineralisation within the mine and surounds as well as provide additional targets for exploration Notable changes in the geochemistry especially in the rock chip sampling of Carola South also supports this theory, as there appears to be elevated copper values. This is significantly higher than other zones, such as Level 7 Deeps and Tres Amigos, where the copper values were negligible.

Figure 6; Cross section though the magnetic inversion and position of the Plomosas Mine showing the spatial relationship between the two areas and interpreted intrusive.

SCOPING STUDY PROGRESS

Scoping study

The green light was given to Runge Pincock Minarco to commence the mining study for different mining senarios with BatteryLimits Pty Ltd undertaking the metallurgical and processing review. A Stage 1 refurbishment of the existing plant on site and expansion to accommodate mining scenarios of 200 to 400 tonnes per day (approximately 70,000 – 140,000tpa) is being considered. Completion is expected in 2-3 months time subject to metallurgical testwork.

Metallurgical Samples Metallurgical samples were collected from the Level 7 Deeps semi-oxide mineralised zone and sent to SGS Lakefield Laboratories in Canada. These consisted of 350kg of samples for metallurgical test work and 150kg of samples for column leach testing for tailings dam purposes. Four 10L containers of water samples were also sent for water analysis.

Managing Director Will Dix commented: The very high grade mineralisation that has been identified well to the south of the current resource at Carola South and also that at Tres Amigos North gives us further confidence that with drilling we can quickly grow the resource well beyond the current tonnage. We are working hard to fast-track this as it has clear implications for the scale of project to be considered in the scoping study and beyond. The study is progressing well and focussed heavily on the metallurgical testwork and process flow-sheet as we believe this is where we will be able to demonstrate significant gains in any future operation.

Yours faithfully,

Will Dix

Managing Director

21 March, 2017

ABOUT CONSOLIDATED ZINC

Consolidated Zinc Limited (ASX:CZL) is a minerals exploration company listed on the Australian Securities Exchange. The Company’s major focus is in Mexico where it recently acquired 51% of the exciting high grade Plomosas Zinc Lead Silver Project through its majority owned subsidiary, Minera Latin American Zinc CV SAPI. Historical mining at Plomosas between 1945 and 1974 extracted over 2 million tonnes of ore grading 22% Zn+Pb and over 80g/t Ag. Only small scale mining continued to the present day and the mineralised zones remain open at depth and along strike. The Company’s main focus is to identify and explore new zones of mineralisation within and adjacent to the known mineralisation at Plomosas with a view to identifying new mineral resources that are exploitable.

In December 2016, CZL announced the first mineral resource compliant with the JORC 2012 guidelines totalling 568,000 tonnes @ 16.9% Zn+Pb and 28.4 g/t Ag for 96,000t of contained Zn+Pb metal in both Indicated and Inferred categories (Table A).

Competent Persons’ Statement

The information in this report that relates to exploration results, data collection and geological interpretation is based on information compiled by Steve Boda BSc (Hons), MAIG, MGSA, MSEG and Andrew Richards BSc (Hons), Dip Ed, MAusIMM, MAIG, MSEG, GAICD. Messrs Boda and Richards are both Members of Australian Institute of Geoscientists (AIG) and Mr Richards is also a Member of the Australasian Institute of Mining and Metallurgy (AusIMM).

Both Messrs Boda and Richards have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken to qualify as Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’ (JORC Code). Messrs Boda and Richards consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

The information in this report that relates to Mineral Resources is based on information compiled by Mr Robert Dennis who is a Member of the Australasian Institute of Geoscientists and Australian Institute of Mining and Metallurgy. Mr Dennis is a full time employee of RungePincockMinarco Limited. Mr Dennis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Dennis consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Original Article: http://www.consolidatedzinc.com.au/wp-content/uploads/2017/03/2102317-Significant-mineralised-areas-identified-outside-resource.pdf

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