VANCOUVER, BC, Oct. 5, 2022 /CNW/ – RCF VI CAD LLC (“RCF“) reports that it has entered into an arrangement agreement (the “Arrangement Agreement“) with NorZinc Ltd. (TSX: NZC) (OTCQB: NORZF) (“NorZinc“) whereby RCF agreed to acquire, subject to the terms and conditions thereof, all of the issued and outstanding common shares of NorZinc (the “Common Shares“) that RCF and its affiliates do not currently own from the shareholders of NorZinc pursuant to a court-approved plan of arrangement undertaken in accordance with the provisions of the Business Corporations Act (British Columbia) (the “Arrangement“).

In consideration for the acquisition of each Common Share not held by RCF or its affiliates, RCF will pay $0.0325 in cash, which represents a 3.5% premium to the 45-day VWAP of $0.0314 per Common Share (the “Consideration“).

As of the date hereof, RCF and its affiliate Resource Capital Fund VI L.P. collectively own and control a total of 365,878,773 Common Shares, representing approximately 48.31% of the 757,315,810 Common Shares that are issued and outstanding, and 7,692,307 warrants of NorZinc.

Upon completion of the Arrangement, RCF and its affiliates will own all of the issued and outstanding Common Shares of NorZinc. Assuming no Common Shares are issued prior to the closing of the Arrangement, RCF will pay $12,721,703.70 to acquire 391,437,037 Common Shares on the closing of the Arrangement.

RCF is acquiring NorZinc to unlock potential synergies and opportunities presented by NorZinc’s Prairie Creek Project. If the Arrangement is completed, NorZinc will become a wholly-owned subsidiary of RCF, and RCF will apply for NorZinc to cease being a reporting issuer in Canada and for the Common Shares to cease trading on the Toronto Stock Exchange (the “TSX“). If the Arrangement is not completed, RCF will continue holding its Common Shares for investment purposes.

Concurrently with entering into the Arrangement Agreement, RCF and NorZinc entered into an amended and restated credit agreement (the “Amended and Restated Credit Agreement“) to provide for an increase in the commitment thereunder by US$11 million in order to address NorZinc’s near-term liquidity needs while the Arrangement is pending. The primary amendments include:

• a new US$11 million commitment from RCF to fund the NorZinc’s 2022 work program as described in the Budget attached to the Amended and Restated Credit Agreement and to finance costs associated with the Arrangement and the Amended and Restated Credit Agreement;
• changing the date on which the loan is payable from 18 months after May 25, 2022 to March 31, 2023;
• all management plans and permits for the development of the Pioneer Winter Road (“PWR“) to be completed by October 31, 2022;
• the new US$11 million loan shall become immediately due and payable in full, within seven (7) business days, if the Arrangement Agreement is terminated, annulled or cancelled or if NorZinc is in breach of any of its material obligations, covenants or conditions thereunder and such breach is not remedied within five (5) days; and,
• NorZinc has agreed to complete a rights offering in an amount of at least US$17 million, unless otherwise mutually agreed between NorZinc and RCF (the “Rights Offering), within 75 days following receipt by NorZinc of a request from RCF, which request may be delivered by RCF at any time in the case that the Arrangement is cancelled or the Arrangement Agreement is terminated, annulled or cancelled or if NorZinc breaches any of its material obligations, covenants or conditions thereunder and such breach is not remedied within five (5) days.

The Amended and Restated Credit Agreement contains customary negative pledges, and certain conditions including the completed Rights Offering, if requested by RCF, and certain other conditions. The first drawdown with respect to the additional loan amount of US$11 million occurred on October 3, 2022 in the amount of US$7 million.

NorZinc’s head office is located at Suite 1710, 650 West Georgia Street, Vancouver, BC V6B 4N9.

To obtain a copy of the early warning report filed under applicable Canadian securities laws in connection with the transactions hereunder, please see NorZinc’s profile on the SEDAR website www.sedar.com.

About RCF VI CAD LLC

RCF VI CAD LLC is a private investment fund existing under the laws of the State of Delaware. For further information and to obtain a copy of the early warning report, please contact:

Resource Capital Funds,
1400 Sixteenth Street, Suite 850
Denver, CO, 80202

Telephone: (720) 946-1444

Attn: Susan Kim

About Resource Capital Fund VI L.P.

Resource Capital Fund VI L.P. is a private investment fund existing under the laws of the Cayman Islands. For further information and to obtain a copy of the early warning report, please contact:

Resource Capital Funds
1400 Sixteenth Street, Suite 850
Denver, CO, 80202

Telephone: (720) 946-1444

Attn: Susan Kim

SOURCE RCF VI CAD LLC