“Canadian Zinc Corporation”….We do not have to tell you that today’s stock markets are quite inefficient and overlook numerous stocks that are exceptionally undervalued. We hear investors’ complaints constantly. As well, we should also mention that the North American brokerage industry’s greatest ability is finding and recommending specific stocks long after they are no longer undervalued and usually well after they have already had significant moves up in price. Brokerage houses also display an unmatched talent for continuing to recommend stocks long after excessive runs up in price near their price highs. That will never change.
Let’s take our “somewhat different type look” at a company that using rather rigorous valuation gauges is now selling at levels that if we are correct, would be considered as undervalued. Canadian Zinc Corporation, symbol CZN, is a Canadian junior exploration mining company based in British Columbia. Their major asset and our key valuation focus is their 100% owned Prairie Creek Mine located in the Northwest Territories. While the company is classified as an exploration junior, their 43-101 reserves and resources are in hand and are substantial. And yet, there is the potential to dramatically expand their zinc, lead and silver holdings with continued exploration. We see a strong likelihood of expansion of their already huge resources and reserves.

A key point worth noting is the fact that the Prairie Creek Mine is already at a very advanced stage of development. Others have noticed Canadian Zinc as well. Sprott Asset Management owns approximately 12% of the shares and a Chinese institution owns 8%; we are not alone in our assessment of its exceptionally overlooked value.
                                                                          Calculating Minds or Calculating Mines!
Canadian Zinc presently has 3,000,000,000 pounds of Zinc measured, indicated and inferred. To be conservative, we will use 10% of the 3 billion pounds for this calculation which would be 300,000,000 pounds. The price of Zinc today is .95 cents. For in-ground minerals there are different percentages that one can use. For today, we will use .10 cents per pound in the ground for 300 million pounds. It would give us a value of $30,000,000 for the Zinc. With 166,482,910 shares outstanding, it would give us a value of .18 cents per share in Zinc. Again, we allow for no consideration for expected expansion of reserves through continued exploration. And…
Canadian Zinc also has 2,500,000,000 pounds of Lead. Using 10% of their measured, indicated and inferred lead would be 250,000,000 pounds of lead. The price of lead today is .98 cents so to keep it simple, we will use .10 cents. That would give us a value of $25,000,000 which would be equal to .15 cents a share. And…
We will not consider their copper resources, but CZN has 70,000,000 ounces of silver. If we give the in ground silver a value of .50 cents per ounce that would give a value of $35,000,000 which comes to .21 cents per share in silver.
If we add up .21 cents for the silver, .15 cents for the lead and .18 cents for the zinc, it would give a value per share of .54 cents per share in bare bone assets. I know that it is rather subjective, as we are attempting to judge what should be a proper valuation gauge and until certain fundamental events occur, we are often groping for a method of determining valuation. Yes, it is always up to debate.
While there is no production as yet as Canadian Zinc Corporation awaits final approval to commence true production, it remains a speculative stock as is any exploration company. We cannot say when that expected approval will come. With CZN selling in the .65 cents range, in our estimation, it merits investor attention. The asset value per share is exceptional. We will be monitoring it closely.