Canadian Zinc Corp. said Dec. 22 that it struck a deal with Resource Capital Fund VI LP for an interim non-convertible project loan of US$10 million for the ongoing development of the Prairie Creek zinc-lead-silver project in Canada's Northwest Territories.
The bridge loan facility will bear interest at the rate of 8%, maturing Jan. 31, 2019.
The loan is secured by a charge on the Prairie Creek property.
The agreement grants Resource Capital a period of exclusivity to work with the company to define the terms of the Resource Capital's future participation in the Prairie Creek project financing.
Resource Capital will also be entitled to participation rights to maintain a pro rata shareholding in the company and to nominate one member to Canadian Zinc's board, as well as certain project oversight rights.
Canadian Zinc will use the proceeds for further engineering work to improve project confidence as the company completes the project financing package and establishes the construction and development management team.
The parties remain in discussions regarding further participation by Resource Capital in future project financing.