New Drilling Intersects Mineralisation 80m Down Dip from Level 7

• Drilling at Plomosas continues to define and infill sulphide mineralisation at Level 7 Deeps and Tres Amigos;

• Drilling continued with 2 rigs in newly established Cuddy 7.2a and Cuddy 3;

• Latest drilling from extends known mineralisation to the north and down dip;

  • Sulphide mineralisation including massive sulphides observed

  • 11.5 mdh intersection of massive and disseminated sulphides in hole LV7037 up dip of Level 7 and to the north (visual estimate);

  • 0.8 mdh massive sulphide in hole LV7040 (visual estimate) approximately 30m down dip of previously defined mineralisation envelope;

• Assay results awaited

Consolidated Zinc is pleased to announce that with the recommencement of drilling at newly established drilling positions, additional intersections of massive and disseminated sulphides have been encountered in the latest drillholes LV7034 to LV7040. Only LV7035 has received assays to date otherwise the comments below are based on visual estimates for which assays are awaited (Figure 1, Table 1).

The underground Diamond drilling at the Plomosas mine was designed to test the limits of mineralisation encountered at Level 7 Deeps to the north and downdip and infill previously reported drilling programs (Figures 3, 4).

Drilling commenced with two underground rigs from a

Location of Plomosas mine, northern Mexico

newly established drill cuddy 7.3 which is 130m north of the previous drilling position (Figure 1) and drill cuddy 7.2a which extends a previous access drive to enable deeper drill testing below the high grade sulphide lenses outlined to date (Figures 1, 2).

Of these 7 completed holes, all have intersected massive sulphide mineralisation of varying widths within broader alteration zones comprising weak to strongly disseminated and veined pyrite, sphalerite and galena mineralisation. These confirm the extension of the significant mineralisation encountered at and below Level 7 as previously reported by CZL.

In particular, visual estimates of hole LV7037 describe 6.15 mdh of massive and semi-massive sulphides within a broader 11.5 mdh section of weak to strong mineralisation. This intercept was encountered up dip of previously outlined mineralisation, between Level 7 and the overlying Level 6, and extends it to the north (Figure 1).

Hole LV7040 drilled from Cuddy 7.2a intersected 0.8mdh of massive sulphides which is notable as being approximately 30m down dip of previously defined mineralisation where it appeared to thin in the typical pinch and swell structures within the Main Manto Horizon (Figure 2).

Analytical results from these intersections are pending however the style and composition of the sulphides appears similar to that encountered throughout the mine. A summary of the visual intersections is provided in Table 1 and full details of the drillholes are included in Table 2.

Figures 1 and 1a (enlargement). Plan of drilling completed and proposed highlighting new drilling positions at Cuddies 7.2a and 3 and results of recently completed drillholes discussed in the text (LV7034 - LV7040) testing the Main Manto Horizon (assays awaited).

The mineralisation encountered in drilling from Cuddies 7.2a and 3 occurs in the typical mine sequence of leached hangingwall shales, mineralised intervals occurring along the hangingwall contact to the Main Manto which also displays collapse breccias, into a zone of leached and vuggy marble with jarosite staining, through a massive brecciated marble and into the footwall shale units.

Drilling continues to test the limits and infill the mineralisation. Most drill holes from the deeps drilling program continue to intersect the sulphide mineralised horizons where forecast within the typical pinch and swell structures clearly identifiable within the stratabound horizons.

Figure 2. Section view of the Plomosas mine through Level 7 drill drive to Cuddy 7.2a showing the drilling completed including LV7040, the first hole completed from Cuddy 7.2a, which intersected mineralisation within the Main Manto Horizon approximately 30m down dip from previously defined mineralised envelope. Assays received and shown in the figure are from drill intercepts up to 50 metres off section.

Managing Director Will Dix commented "Expanding the platform for drilling has given us the ability to drill further down dip and obtain better intersection angles into the mineralisation. Continuing to intersect massive sulphides down dip and now identifying new mineralisation up-dip above level 7 re-enforces the potential for accumulating resource tonnes in the mine area. We will continue to drill aggressively to build as much of a mineral inventory during the remainder of 2016."

Figure 3. Plan view of the Plomosas mine showing location of the cross section in Figure 4 (trace A-A') and work areas referred to in the text including Level 7 access for drilling the Main Manto Horizon deeps.

Figure 4. Section view of the Plomosas mine through Cuevitas area (A-A') showing the Tres Amigos zone, historical drilling and the drilling planned for Main Manto Horizon below Level 7.