CZ
CONSOLIDATED ZINC LTD
ANNUAL REPORT
2016
TABLE OF CONTENTS
Corporate Directory
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1
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Chairman's Review
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2
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Managing Director's Report
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3
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Directors' Report
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16
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Auditor's Independence Declaration
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28
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Consolidated Statement of Profit or Loss and Other Comprehensive Income
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29
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Consolidated Statement of Financial Position
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30
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Consolidated Statement of Cash Flows
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31
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Consolidated Statement of Changes in Equity
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32
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Notes to Consolidated Financial Statements
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33
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Directors' Declaration
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56
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Independent Auditor's Report
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57
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Shareholder Information
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59
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Tenement Schedule
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61
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CORPORATE DIRECTORY
DIRECTORS
Mr Stephen Copulos - Non-Executive Chairman Mr William Dix - Managing Director
Mr Andrew Richards - Executive Director
Mr Luis Rogelio Martinez Valles - Non-Executive Director
COMPANY SECRETARY
Mr Andrew Beigel
PRINCIPAL PLACE OF BUSINESS AND REGISTERED OFFICE
Suite 1, Level 1
35 Havelock Street WEST PERTH WA 6005
CONTACT DETAILS
Postal: P.O. Box 692 WEST PERTH WA 6872
Ph: + 61 (8) 9322 3406
Fax: + 61 (8) 9320 7501
Website: www.consolidatedzinc.com.au Email: [email protected]
SOLICITORS
GTP Legal
68 Aberdeen Street
NORTHBRIDGE WA 6865
SHARE REGISTRY
Link Market Services Limited Level 4, 152 St George's Terrace
Perth WA 6000
AUDITORS
Butler Settineri (Audit) Pty Ltd Unit 16, First Floor
100 Railway Road
SUBIACO WA 6008
STOCK EXCHANGE
Australian Securities Exchange Exchange Plaza
2 The Esplanade
Perth, Western Australia 6000
(ASX: CZL)
CHAIRMAN'S REVIEW
Dear Fellow Consolidated Zinc Shareholders
It is my pleasure to be writing this letter in my capacity as your Chairman and the major shareholder in Consolidated Zinc.
This year has seen some major and exciting developments for the Company since it acquired the extremely high grade Plomosas zinc-lead-silver mine in northern Mexico last year. On the technical side we have encountered and continue to intersect high grade zinc mineralisation in our underground drilling program and are on schedule to outline a JORC compliant resource in the next few months.
The Plomosas Project covers 11 Exploration and Exploitation Concessions totalling 3,019 ha in area and has an extensive history of exploration and development in base metal operations. Records show the Plomosas project to be in the global zinc industry's upper quartile for grade, with approx. 1.7mt of ore having been mined since 1943, with average historical grades of 15-25% Zinc (Zn) + Lead (Pb) with 40-60 g/t Silver (Ag) and clean mineralogy.
Resource definition drilling from Level 7, 230m below surface and the lowest point of commercial historical production, has encountered high grade mineralisation including several intercepts up to 37.86% zinc and 53.37% combined zinc plus lead in the horizon immediately below the underground workings. This not only provides assurance of the existence of mineralisation at depth but will allow CZL to access the mineralisation from the existing underground workings with minimum delay and relatively low capital cost.
Preliminary metallurgical testwork on samples from the semi oxide mineralisation during the year also indicated that high zinc recoveries to concentrate could be achieved using conventional processing methods.
I am also pleased to report that under the guidance of our Managing Director, Mr Will Dix, Exploration Manager, Mr Steve Boda and the team, we have continued to enforce new safety protocols and work practices; refurbished and dewatered significant portions of the underground workings. We have also extended underground access in areas including access to Level 8. As part of the underground refurbishment, four drilling platforms have been established to enable extensional drilling along strike and down dip of the Main Manto Horizon at and below Level 7.
We remain confident of achieving our key objective to report a JORC resource on the Semi Oxide and Sulphide mineralisation later in 2016. In parallel we will develop plans for mining and processing using the plant on site and extensive underground mine development in order to facilitate early access for relatively modest capital expenditure.
Additional exploration potential exists within the project tenements as well in the region but the Company's present focus is to re-establish the mine operations targeting an initial 10 year mine life on resources to be defined immediately below the mine workings and along strike.
On the corporate side we have been able to attract significant funds through capital raisings during the year and I am pleased to have attracted some experienced and notable investors to the company's share register.
The board is also very conscious of every dollar we spend and to ensure we gain the maximum value in executing our Strategy. During the year we re-prioritised the other projects we held in Western Australia and Sweden and felt it was in the Company's best interests to relinquish them.
I would like to thank you for your support as shareholders of Consolidated Zinc and assist us building a stronger, focused mineral company for the benefit of all shareholders.
Yours sincerely
Stephen Copulos
Stephen Copulos
Chairman