Canadian Zinc Corporation (TSX:CZN)(OTCQB:CZICF) (the "Company", "Canadian Zinc"
or "CZN") announces its financial results for the three month period ended March
31, 2012. 


Financial Results March 31, 2012

For the three months ended March 31, 2012, the Company reported a net loss and
comprehensive loss of $2,532,000 compared to net loss and comprehensive loss of
$14,244,000 for the three months ended March 31, 2011. The net loss in the three
months ended March 31, 2012 included a mark-to-market loss of $1,509,000 on the
Company's shares in Vatukoula Gold Mines plc, compared to a mark to marked loss
of $12,880,000 in the three months ended March 31, 2011. Excluding the loss on
the shares in Vatukoula, the Company recorded a loss of $1,023,000 in the first
quarter of 2012, compared to a similar loss of $1,364,000 in the same period
last year.


At March 31, 2012, the Company had a positive working capital balance of
$27,086,000 including cash and cash equivalents of $1,603,000, short term
investments of $13,677,000 and marketable securities of $12,198,000 (for a total
of $27,478,000). 


Prairie Creek Mine 

Prairie Creek Development Plan and Feasibility Study

In February 2011, the Company engaged SNC-Lavalin Inc. ("SNC") of Vancouver to
assist in the ongoing development of the Prairie Creek Project and to complete a
feasibility study on the Prairie Creek Mine. 


The scope of SNC's work includes detailed engineering and design, including
mining equipment, on-site and off-site infrastructure, transportation and
logistics; capital and operating cost estimates for underground mining,
preliminary designs of stoping methods and layouts; capital cost estimates for
the rehabilitation and upgrade of the processing plant, power plant and water
treatment and storage ponds; construction schedule and execution plan. Much of
this work was completed during 2011.


The SNC work has progressed during 2012 with primary focus on water treatment,
storage facilities, milling and processing costs. In particular, a power load
schedule was developed for the mill and site facilities in order to determine
the amount of power generation required to support the proposed mining
operation. Quotes have been requested for diesel generation units that also
utilize a heat recovery system to further support the needs of the mine site.
Further engineering design was completed on water treatment plant, concentrate
storage sheds and water storage ponds.


In addition, AMC Consultants was retained to provide an updated independent
resource calculation for the Prairie Creek Mine which will also be incorporated
into the feasibility work program.


It is expected that a report covering the first stages of SNC's work will be
completed during the second quarter of 2012 and will generate capital costs
estimates for the rehabilitation and upgrading of the mill, power plant and
water treatment and storage ponds, as well as working cost estimates for mining,
processing and transportation. It had been anticipated that SNC would complete
the feasibility study in the first quarter of 2012; however, this work has been
slightly delayed by the decision, because of regulatory disclosure requirements,
to obtain an up-to-date independent resource estimate, and by delays in
obtaining certain technical specifications and cost estimates. 


Based on the work to date and pending receipt of the SNC report, the Company
currently anticipates that the additional capital required to install the
planned new facilities and to bring the Prairie Creek Mine into production will,
subject to final design and operating permit conditions, be in the range of $150
to $160 million. This anticipated capital cost is somewhat higher that the
Company's previous estimates, which were in the range of $120 million, largely
as a result of the inclusion of some new features, additional water storage
facilities and general cost inflation.


Further site investigation and geotechnical work will continue during the summer
of 2012 and will be incorporated, along with updated permitting parameters, into
a second report planned be completed later in 2012, which updated report would
form the basis of a formal feasibility study.


2012 Prairie Creek Site Programs

The Prairie Creek Mine Site was re-opened in early April, 2012 and is undergoing
maintenance and repair of equipment in preparation for the upcoming summer
activity. An airlift of equipment was undertaken in early May which included
mobilisation of an auger drill rig contracted from Mobile Augers and Research
Ltd., in Edmonton. The auger drill is scheduled to complete a series of
geotechnical holes around the various site facilities and proposed new
facilities, including the water storage pond and waste rock pile areas, in order
to complete further engineering studies for design and construction purposes. A
series of hydrological wells are also planned to be drilled to further detail
and monitor the groundwater hydrology of the site area in preparation for mining
activities. 


The Company also plans to conduct further technical work to assist in this
process and will involve further planning and design, site investigations to
further assess the existing infrastructure, optimize the mill plan layout and
further assess the transportation corridor. Further data gathering and testing
of specific mine aspects, mainly related to water treatment and management, are
expected to continue as part of regulatory phase of the permitting process.


Further geotechnical evaluation and studies of the road route through Nahanni
National Park Reserve and adjacent areas are also planned. These will include
assessment of bridge crossings, reducing steep grades and further substratum
assessment. A detailed aerial LIDAR survey is planned to be completed by
McElhanney Surveying, utilizing fixed wing aircraft, when field conditions
permit. This survey will provide an accurate baseline for route planning of the
re-aligned road route areas, resulting from the recent Environmental Assessment,
and also provide a solid basis for construction planning. 


With a flow-through exploration budget of $2.5 million, the Company plans to
continue the deep-hole diamond drill exploration program at Casket Creek
utilizing the Company's TM-2500 coring rig, approximately 1.6 kilometres north
of the most northern drillhole that defines the present mineral resource. It is
planned to continue for the first part of the summer in the Casket Creek area in
order to complete wedging some drill holes around last year's intercept in hole
PC-11-187W2 which intersected 5% Pb and 11% Zn over 3.5 metres of core length.
After completion of this phase of drilling at Casket Creek the drill rig will be
moved back south, closer to the Prairie Creek Mine Site, to drill in the area
between the northern extent of the currently defined resource and the Casket
Creek area.


At the same time the Company's Longyear drill rig will focus on infill areas
closer to minesite and within the defined resource. Specific targets will be
areas that have the potential to be upgraded from the inferred category to the
indicated resource category. Most of these holes will be targeted at depth and
along strike in the proximity of the known underground workings. The Company has
contracted Cabo Drilling (Pacific) Corp to supply manpower and technical
supervision for the 2012 drilling program.


Training

The Company has begun onsite training programs which will take place at the
Prairie Creek Mine Site. These training programs are being undertaken with
assistance from the Federal Government, Human Resources and Skills Development
Canada, in the "More Than a Silver Lining" aboriginal training program,
specifically for the Prairie Creek Mine, and administered by the NWT Mine
Training Society. These programs include training for safety officers, diamond
drilling operators, geological field assistants and camp catering. Other
training programs, which will occur off-site, are currently being planned and
co-ordinated by the Company and the Mine Training Society which has opened an
office and training center in Fort Simpson.


Permitting Activities

The Company's principal focus has been to advance the Prairie Creek Property
towards receiving a Class "A" Water Licence and associated Land Use Permits,
through the regulatory process established under the Mackenzie Valley Resource
Management Act, that will permit the further development and subsequent mine
production at Prairie Creek. 


After successful completion of a nearly four year environmental assessment
process, Mackenzie Valley Environmental Impact Review Board (the "Review Board")
issued its Report of Environmental Assessment and Reasons for Decision on
December 8, 2011. The Review Board concluded that the proposed development of
the Prairie Creek Mine is not likely to have any significant adverse impacts on
the environment or to be a cause for significant public concern. 


In January 2012, the Mackenzie Valley Land and Water Board (the "Water Board")
commenced the regulatory process for the issue of a Class "A" Water Licence and
Land Use Permit for the operation of the Prairie Creek Mine. In February 2012,
the Company submitted a Consolidated Project Description ("CPD"), highlighting
the changes that resulted from commitments made by Canadian Zinc during the
environmental assessment process. 


The Water Board has now completed its review of the information contained in the
application, Environmental Assessment and the CPD and has issued a Directive on
the additional information that is required by the Water Board at this stage of
the Regulatory Process. The Water Board has also issued a Work Plan to be
followed towards the issue of these permits which envisages completion of the
Public Hearing, required by the Mackenzie Valley Resource Management Act, in
November and the issue of a draft water licence by December 23, 2012.


Subsequent to the end of the first quarter a number of new permits for the
ongoing development of the Prairie Creek Mine Project have been approved by the
Mackenzie Valley Land and Water Board. 


The Water Board has issued a new Class 'A' Land Use Permit MV2012C0008 for the
activity of underground decline development, for a period of five years
commencing May 10, 2012 and expiring May 9, 2017. The new Land Use Permit
entitles CZN to conduct mining exploration and associated activities, including
underground decline development, at the Prairie Creek Mine. 


The Water Board has also approved an amendment and extension to the Company's
existing Class "B" Water Licence, MV2001L2-0003, for the management, treatment
and discharge of mine water from the mine site. The Water Licence has now been
amended to cover the underground development of the new decline, including
pumping, treatment and discharge of water inflows using the existing water
treatment infrastructure, and placement of waste rock on an existing waste rock
pile. The term of the water licence has been extended to September 9, 2019. 


The Water Board has approved an extension of the Company's Land Use Permit
MV2003F0028 for the use of the road that connects the Prairie Creek Mine to the
Liard Highway. The LUP for use and maintenance of the existing access road
alignment has been extended for a term of two years until April 2014. This
permit will allow CZN to undertake road rehabilitation work from the Mine to the
boundary of the Nahanni National Park Reserve, and prepare the road for
operational use. 


Outlook

Canadian Zinc's continued focus for 2012 will be to advance the Prairie Creek
permit applications through the regulatory phase, to the issue of permits
allowing for production. 


The recent issue of a new underground development permit and the extensions of
the Company's current water licence and road permits represent significant steps
forward that will enable the continuation of the ongoing development of the
Prairie Creek Mine. The Work Plan issued by the Water Board generally meets the
Company's expectations and provides a schedule and key dates for the issue of a
draft Class "A" Water Licence before this year end.


Working with SNC Lavalin and other consultants, the Company plans to advance the
development of the Prairie Creek Project. It is expected that a report covering
the first stages of SNC's work will be completed during the second quarter of
2012. Further site investigation and geo-technical work, under the direction of
SNC, will continue during the summer of 2012 and it is expected that a second
report will be completed later in 2012, which updated report would form the
basis of a formal feasibility study. 


As part of the ongoing mine development process the Company also plans to engage
in discussions with various smelters and metal traders with regard to the
processing and marketing of the lead and zinc concentrates expected to be
produced by the Prairie Creek Mine.


The Company has recently commenced its 2012 exploration and development programs
at the Prairie Creek Mine Site. With an exploration budget of $2.5 million, the
Company plans to continue the deep-hole diamond drill exploration program at
Casket Creek, and also to continue exploration in the immediate vicinity of the
Prairie Creek Mine.


At March 31, 2012 the Company had working capital of $27 million and is well
positioned to carry out its planned 2012 programs.


Qualified Person

Alan Taylor, P.Geo., Chief Operating Officer, Vice President Exploration and a
Director of Canadian Zinc Corporation, is responsible for the Company's
exploration program, and is a non-independent Qualified Person for the purposes
of National Instrument 43-101 and has approved this press release.


Risks and Uncertainties

This press release should be read in conjunction with the unaudited interim
financial statements and notes thereto, and management's discussion & analysis
("MD&A") for the three ended March 31, 2012, both available on SEDAR at
www.sedar.com. The Company's unaudited interim financial statements have been
prepared in accordance with International Accounting Standard 34, Interim
Financial Reporting using accounting policies consistent with International
Financial Reporting Standards as issued by the International Accounting
Standards Board.


The Company's business and results of operations are subject to numerous risks
and uncertainties, many of which are beyond its ability to control or predict.
Because of these risks and uncertainties, actual results may differ materially
from those expressed or implied by forward looking statements, and investors are
cautioned not to place undue reliance on such statements, which speak only as of
the date hereof. 


Investors are advised to review the discussion of risk factors associated with
the Company's business set out in the Company's Annual Information Form for the
year ended December 31, 2011, which has been filed with the Canadian Securities
Regulators on SEDAR (www.sedar.com). The risks and uncertainties, as summarized
in the Company's MD&A and in other Canadian and U.S. filings, are not the only
risks facing the Company. Additional risks and uncertainties not currently known
to the Company, or that are currently deemed to be immaterial, also may
materially adversely affect the Company's business, financial condition and/or
operating results.


Cautionary Statement - Forward Looking Information

This press release contains certain forward looking information. This forward
looking information includes, or may be based upon, estimates, forecasts, and
statements as to management's expectations with respect to, among other things,
the issue of permits, the size and quality of the company's mineral resources,
future trends for the company, progress in development of mineral properties,
the timing of exploration, development and mining activities, completion of
financings, capital costs, mine production costs, demand and market outlook for
metals, future metal prices and treatment and refining charges, the financial
results of the company and future gold production and profitability of VGM.
There can be no assurances that such statements will prove to be accurate and
actual results and future events could differ materially from those anticipated
in such statements. The Company does not currently hold a permit for the
operation of the Prairie Creek Mine. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. Inferred mineral resources
are considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral reserves.
There is no certainty that mineral resources will be converted into mineral
reserves.


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