ScoZinc Mining Ltd. Announces Robust Results of Its Scotia Mine Pre-Feasibility Study

Highlights of the PFS are tabled below, with additional details of the NI 43-101 Technical Report ("2020 PFS") to be filed on www.sedar.com under ScoZinc's profile within the next 45 days.

Table 1: Pre-Feasibility Study Highlights

All dollar amounts are expressed in Canadian Dollars unless otherwise noted
¹ After Lead credits deducted
² All-In-Sustaining-Costs ("AISC") are C1 Costs plus Sustaining Capital and Financing Costs

The President and CEO, Mr. Mark Haywood, commented: "We are very excited to deliver the results of our Scotia Mine's PFS by our independent panel of mining industry experts. The Project's economics are very robust, with relatively low capital requirements and a short payback period which includes proposed financing costs structured to be greatly non-dilutive to our shareholders.

"The Project is set to produce high quality Zinc and Lead concentrates for over 14 years, at low operating costs, via conventional open pit mining methods, with a steady ore processing rate of 2,700 tonnes per day. Through detailed planning and analyses, we believe the technical team have resolved many of the mine's historical bottlenecks and poor performance issues to develop a low-risk development and life of mine production plan.

"Importantly, the PFS shows that commercial Zinc and Lead concentrate production can be achieved within 9 to 12 months of project financing of approximately $30M, with an average annual cash flow of $14M. The extensive facilities already in place on site, combined with the short pre-stripping period, enable the Scotia Mine to potentially demonstrate a free cash flow of $8.4M in the first year of commercial production alone.

"ScoZinc is also of the view that there are additional opportunities to further improve the Project's economics and extend the operation's 14-year mine life.

"On the basis of these very positive PFS results, ScoZinc will be actively pursuing the necessary finance to begin commercial production as soon as possible."

A summary of the Pre-Feasibility Study is provided below. The complete NI 43-101 Technical Report will be provided on the Company's website at www.ScoZinc.com once the report has been filed on SEDAR.

Location, Ownership & History

The Scotia Mine consists of a fully permitted mine and mill which are 100% owned by ScoZinc. The Scotia Mine is located at approximately 45°02′ North, 63°21′ West, or 62 kilometres northeast of Halifax, Nova Scotia, in the Halifax Regional Municipality. Year-round access to the Project is by paved highway roads and is approximately 15 kilometres off the Nova Scotia provincial highway along Route #224. The Halifax International Airport is located 33 kilometres southwest of the mine site. The Project consists of 648 hectares of mineral rights in the form of three contiguous mineral leases, including land with exploration potential for zinc and lead mineralization. ScoZinc also owns real estate property of 712.5 hectares, which includes the mineral leases and adjoining areas.

In February 2011, Selwyn Resources Limited ("Selwyn") purchased ScoZinc Limited and all of its assets, including the Scotia Mine and ScoZinc's exploration claims, for $10 million less a deduction relating to increased reclamation bonding requirements that were being determined at the time of the acquisition. Selwyn changed its name to ScoZinc Mining Ltd., and owns 100% of the ScoZinc Limited subsidiary, which in turn holds the mineral rights to the Main and Getty Zones, the mining rights and surface rights (real property rights) for the Scotia Mine deposit and an environmental assessment (environmental registration) for the Scotia Mine.

ScoZinc also currently holds five exploration licenses covering 41 claims in the immediate vicinity of the Scotia Mine Deposit. Each individual claim covers an area of approximately forty acres (16.2 hectares). In total, the 41 claims cover approximately 664 hectares (1,641 acres). These licenses are located along strike from the Scotia Mine Deposit and include favourable host rocks similar to that at the mine site.

Geology and Mineralization

The Scotia Mine Deposit consists of three main zones of mineralization referred to as the Main (formerly Gays River deposit), Getty and Northeast Zones. The Main zone lies along the southside of the Gays River main branch, immediately east of the confluence with the Gays River south branch. The Getty zone lies just northwest of the Main and North-East zones on the western side of Gays River. The two zones are separated by less than one kilometre.

The Gays River Formation mineralization has long been considered a Mississippi Valley-type lead-zinc deposit. This type of deposit is carbonate-hosted, classified as a typical open space filling type, and hosted in a dolomitized limestone. The limestone developed as a carbonate build-upon an irregular pre-Carboniferous basement topographic high where conditions allowed for growth of reef-building organisms.

The zinc/lead-bearing Gays River Formation trends in an east-north east direction across the Property. Locally, the mineralisation dips up to 45º on average, and up to vertical in places, to the north-northwest which is the depositional slope of the front of the Gays River reef unit. The dip tends to be horizontal in the back reef area (south of the main trend). The mineralisation is present as sphalerite and galena and grades from massive Pb-Zn mineralized material in the fore reef to finely disseminated, lower grade material in the back reef. In the mine area, the Gays River Formation is overlain either by the evaporites of the Carroll's Corner Formation and/or overburden.

Exploration and Data Management

The Scotia Mine has extensive diamond drilling and blast-hole drilling on a large portion of its mining leases and associated exploration licences. A total of 1,831 holes or 121,870 metres has been drilled to date. All of the data from these holes has been included in this Pre-Feasibility Study and the 2019 mineral resource estimation by SRK (the "2019 MRE").

Royalties

For the Scotia Deposit, ScoZinc owns the real property covering all the defined mineral resources on the mining leases, so no royalty to any landowner is applicable. However, there is a small 25-acre portion on ScoZinc's real property that is subject to a sand, gravel and fill royalty of $1.00 per metric tonne to Gallant Aggregates. This royalty does not impact the Scotia Mine's Pre-Feasibility Study.

For the Getty deposit, ScoZinc has a 1% royalty with Globex Resources Ltd ("Globex"), which provides Globex with a 1% Gross Metal Royalty ("GMR") interest in the associated claims. Agreement terms also allows ScoZinc to purchase 50% of the GMR for $300,000. ScoZinc's Life of Mine plan indicates that such a royalty would only be applicable in the last few years of the 14-year mine life.

Nova Scotia provincial royalty of 2% also applies on all net revenue generated from the Project.

Mineral Resource Estimate

A Mineral Resource estimation was completed in December 2019 for the Scotia Mine Deposit, including the Main, Getty and Northeast Zones ("2019 MRE"). The mineral resources for the Scotia Mine Deposit have been classified as Measured, Indicated and Inferred categories based on CIM Definition Standards in accordance with NI 43-101 reporting guidelines, and are reported with respect to cut-off values calculated using the assumed processing costs and recoveries, and metal prices. The resource is also constrained by an optimized (Whittle^TM) pit shell, which is based on optimistic metal prices, in order to demonstrate that the defined resources have reasonable prospects of eventual economic extraction, which is a CIM Definition Standards criterion. All classification categories (Measured, Indicated and Inferred) were considered in the resource pit optimization.

The Scotia Mine Deposit mineral resource summary statement in provided in Table 2, with an effective date of December 14, 2019.

The 2019 MRE resulted in an increase in Measured & Indicated tonnage of 105% (to 25,450,000 tonnes at a Zinc equivalent grade of 2.84%) and an increase in Inferred tonnage of 7% (to 5,010,000 tonnes at a Zinc equivalent grade of 2.13%) from previous resource estimates on the deposit.

Table 2: Scotia Mine Resource Statement, Dec 14, 2019 - SRK Consulting (U.S.), Inc.

Source: SRK, 2019

• Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into Mineral Reserves;
• Open-pit resources stated as contained within a potentially economically minable open-pit; pit optimization was based on assumed prices for zinc of US$1.35/lb, and for lead of US$1.14/lb, a Zn recovery of 86% and a Pb recovery of 93%, mining and processing costs varying by zone, and pit slopes of 45 degrees in rock and 22 degrees in overburden;
• Open-pit resources are reported based on a Zinc Equivalent (ZnEq) cut-off grade of 0.90%. The ZnEq. grade incorporates Zn and Pb sales costs of US$0.19/lb and US$0.11/lb respectively, and a 2% royalty charge; and,
• Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.

Mineral Reserve Estimate

The Scotia Mine Mineral Reserve Estimates are classified as either Proven Reserves or Probable Reserves and are provided in Table 3. Total Mineral Reserves are 13.66 million tonnes with a Zinc Equivalent grade of 3.09 percent.

Table 3: Scotia Mine Mineral Reserve Estimates

Notes: 2020 Mineral Reserves are as of 01 May 2020 and based on a design cut-off grade of 1.5% ZnEq grade. Cut-off grades are based on a Zinc metal price of US$1.10/lb, recovery of 89%, a Lead metal price of US$0.95/lb, and mining recovery of 92%. Average unplanned dilution and mining recovery factors of 12% and 92%, respectively, are assumed.

Mining

The Scotia Mine deposit covers a total strike length of approximately 4 kilometres, with some surface constraints in between, and a vertical distance of approximately 120 metres. All mining is from open-pit operations with an expected mine life of approximately 14 years. Mining operations will be conducted utilizing 4 shifts, 12 hours each shift, covering 24 hours per day. The 4 shifts will be on a 4-days on, 4-days off, 4-nights on, 4-nights off rotation.

The Scotia Mine mineral resources will be extracted using conventional load and haul (truck & shovel) mining methods as determined by optimized pit designs and life-of-mine schedules. Mining operations will be completed using an owner/operator of excavators, loaders, haul trucks and ancillary support equipment as well as some rental equipment. Equipment requirements have been determined based upon required production rates and haulage cycles using equipment specifications provided by local authorized equipment suppliers and manufacturers.

The open-pits will be mined on 5-metre-high benches with double benching being utilized on the lower benches which are primarily comprised of hard rock. Drilling and blasting are only required for 40 percent of the total material mined over the life of mine plan, which accounts for all of the hard rock to be mined from the pits. The remaining 60 percent is largely comprised of overburden and has been proved to be free digging material based on past operations and will not require blasting. Drilling and blasting will be performed using contract services.

Figure 1 illustrates the ultimate open-pit and waste dump design.

Figure 1: Ultimate Pit and Waste Dump Design

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The Ultimate Pit Design was divided into 6 phases to optimize development sequences and production requirements. Waste has been subdivided into overburden, gypsum, and carbonate waste rock. Inferred resource material inside the Ultimate Pit Design has been included as carbonate waste rock and totals approximately 1,450,000 tonnes at 1.5% Zn and 0.7% Pb. Waste storage will consist of a combination of backfilling the mined pits and stockpiling in the waste dump. Using the Ultimate Pit Design and the pit phase sequencing, a Life-Of-Mine ("LOM") mining schedule was developed by month and is based on operating 24 hours/day, 365 days/year. The LOM production schedule is based on providing a mill feed of approximately 1 million tonnes per annum at an average grade of 2.03% Zinc and 1.10% Lead, which equates to a Zinc Equivalent grade of 3.09%.

The water table at the Scotia Mine is divided into two horizons: the overburden horizon and the bedrock horizon. ScoZinc plans to utilize 60 geotechnical depressurizing pumping wells, in conjunction with in-pit pumping via submersible sump pumps, to dewater the overburden horizon. The bedrock horizon will be dewatered using the existing deep well infrastructure in conjunction with in-pit temporary wells that access the underground workings. Horizontal wells will also be utilized in the karst gypsum to deal with the localized trapped water and will be allowed to drain into strategically placed in pit sumps which will then be pumped to the tailings storage facility ("TSF"). All in pit water will be pumped to the TSF. Water from the 60 depressurizing pit perimeter wells will be discharged into either a reservoir or the Gays River, however most of this water will be used as processing water in the mill. A similar setup will be utilized in the North East and Getty pits.

Metallurgy and Mineral Processing

Metallurgical data from past production data and more recent metallurgical test work is available on the carbonate hosted zinc-lead deposit. The combined data shows that the zinc and lead minerals liberate well from the host rock, resulting in relatively high metal recoveries and concentrate grades. The simple mineralogy and metallurgy present the opportunity to consistently achieve high recoveries and concentrate grades over the life of mine plan.

The process design criteria, based on historical data and plant design improvements, include overall average zinc concentrate grades of 57% with an average 86.6% recovery, and the overall average lead concentrate grade of 71% with an average 89.1% recovery. Due to the carbonate hosted deposit, the zinc and lead concentrates have very low levels of impurities or deleterious minerals, resulting in the ScoZinc concentrates to be proven to be a clean, high-ranking concentrate.

The ScoZinc concentrator plant (or Mill) was last operated in 2009 at 2,200 tonnes per day from the original name plate design of 1,500 tonnes per day using conventional crushing, grinding flotation, concentrate dewatering/drying, and rehandling loadout. After extensively reviewing all past production and incomplete engineering work, new final design work as part of the Pre-Feasibility Study has confirmed that with relatively minor upgrades to the comminution, flotation and dewatering circuits, the plant can consistently operate at 2,700 tonnes per day without major capital expansion.

The new overall plant layout and plant flow diagram are provided in Figure 2 and Figure 3, respectively.

Figure 2: Overall Plant Layout

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Source: Ausenco, 2020.

Figure 3: Plant Flow Diagram

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Source: Ausenco, 2020.

Site Infrastructure

The Scotia Mine is conveniently located 33 kilometres from Halifax's International Stanfield Airport (YHZ) in Nova Scotia with excellent infrastructure in place including processing facilities, waste dumps, a tailings pond, grid-power, all-season port terminal access, and all-season highways. Building infrastructure in place has an area of approximately 131,585 square feet. The mine site infrastructure is well established, as it has been on high level care & maintenance since 2009. ScoZinc equipment and spare parts asset inventory is assessed at approximately $5.3 million.

As the Scotia Mine is fully permitted for operations, relatively minor upgrades and improvements to the mining and processing facilities to enable the operation to commence commercial production within a relatively short time frame of months. ScoZinc intends to expand the existing operations with the additions of ROM based primary and secondary crushers, a container handling yard, mobile fleet fuel bay and additional mobile fleet maintenance workshop. Some of these opportunities require permitting and have been included in the Pre-Feasibility Study by way of temporary additions until permanent permitting can be provided. All mining and maintenance operations will be conducted by ScoZinc.

Electrical grid power systems are currently onsite with transformers and major motor control centres in place. Some of these systems will be replaced during the pre-production phases in order to ensure performance and reliability during commercial production.

Water for mineral processing is provided from pit perimeter wells designed to un-saturate the pit slopes and to provide clean water to the plant for optimal water quality. Water may also be sourced from the tailings pond. Additional water is sourced from the nearby Gays River and treated for potable water site needs and fire suppression.

The Tailings Storage Facility is permitted with 8 million tonnes of capacity. ScoZinc intends to either seek approval to expand the capacity by 6 million tonnes or use in-pit tailings deposal into its completed pits in approximately year 6 of the life of mine.

Site Access

The Scotia Mine is located adjacent to sealed Highway 224, with a permanent 900 metre access road providing all season access to the operation. The Mine is located in the Halifax Regional Municipality, which is approximately 62 kilometres to downtown Halifax. Due to its convenient location and quality of potential personnel, ScoZinc expects most of its workforce will be sourced from the region.

The transport and handling of freight and concentrate is possible year-round due to ScoZinc's location on an unrestricted highway. The Scotia Mine is also located near a Canadian National Railway line siding, the Nova Scotia provincial highway (102), deep-water ports and container handling terminals, and the Trans-Canadian National Highway.

Concentrate Marketing

The Scotia Mine's carbonate-hosted orebody will produce high-quality zinc and lead concentrates through its 2,700 tonnes per day processing plant on the mine site. The concentrates will be loaded directly into lined 20' shipping containers, which will be sampled, sealed and weighed on site. ScoZinc personnel will transport the containers by all season highway to either the Fairview Cove Container Terminal or a nearby Canadian National Railway siding. The Scotia Mine's concentrate container handling system will avoid excessive costs and risks associated with rehandling, contamination, concentrate losses and excessive moisture build up employed historically.

ScoZinc has an initial offtake agreement by way of a Memorandum of Understanding, dated 3^rd April 2018, with MRI Trading AG, for the Scotia Mine's lead and zinc concentrates for approximately 10 years of the 14-year mine life. The agreement provides competitive terms for 333,000 wet metric tonnes of zinc concentrate and 133,000 of lead concentrate from the Scotia Mine. ScoZinc expects to establish firm concentrate purchase contracts with one or more metal trading companies under terms consistent with the current market terms. ScoZinc is engaged in negotiations with a number of offtakers but has not yet finalized an arrangement due to the preparation of this Pre-Feasibility Study which represents a significant change from ScoZinc's recent Preliminary Economic Assessment.

The forecast annual production of Zinc and Lead concentrate is provided below in Figure 4.

Figure 4: Forecast Annual Production of Concentrate: Zinc and Lead

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Permitting, Environmental and Community

The Scotia Mine is an existing operation on high-level Care & Maintenance with substantial environmental databases, operating history, and valid permits and licenses that allow for the mining, processing of resources, and the shipping of zinc and lead concentrates.

Environmental responsibility and stewardship have been and continue to be a priority to ScoZinc. To that end, there are extensive monitoring programs at the Scotia Mine including but not limited to: Surface Water quality, Groundwater quality, Wetland, Wildlife and Vegetation. These programs have continued throughout Care & Maintenance and will be implemented for operations.

Roughly half of the mineral resources used in this economic analysis are already under permit and mining of those resources (Main Zone, Southwest Expansion) can begin immediately.

Another important aspect of the project status with respect to permits, environment and community is that regulators and the community have experience with the project and environmental baseline conditions are already well understood. In combination, these factors limit the overall permitting risk and anticipated timelines for permitting project expansions to include the entire mineral resource used in this analysis.

Capital & Operating Expenditures

The tables below (Tables 4 and 5) summarize the estimated capital and operating costs for the Scotia Mine Project. The capital expenditure determined to advance the Scotia Mine to commercial production within 9 to 12 months of project financing are estimated to be $28.1 million, excluding contingency of $2.7 million. The Payback period for the capital is estimated at 2.4 years, including financing costs and contingencies.

Table 4: Capital Expenditure Summary

The Operating costs are estimated at $53.72 per tonne milled (or processed), which equates to an average C1 Cash Cost of US$0.59/lb over the life of the mine.

Table 5: Operating Expenditure Summary

Economic Analysis

The Base Case economic model has been developed using both short term metal price assumptions of US$1.16/lb zinc, US$0.88/lb lead, plus long-term metal price assumptions of US$1.20/lb zinc, US$0.90/lb lead. The short term metal pricing is based on present market conditions anticipated for the first few years of production which naturally reduces the potential earnings of the project, however ScoZinc is of the view that this approach represents a realistic approach since the Scotia Mine has the potential of commercial production within the short term.

The metal price assumptions used in this study are based on market consensus for the long-term prices of zinc and lead, including Sell-Side Mining Research, published by different investment banks, in Canada and internationally, and studies by independent consultants such as Wood Mackenzie Ltd., Fastmarkets MB, S&P Global Market Intelligence and Open Mineral AG, among others.

The Project's sensitivities to metal prices and foreign exchange rates are provided below.

Table 6: Metal Price Sensitivities Analysis

*Scotia Mine Base Case: Year 1 average (US$1.16/lb Zn, US$0.83/lb Pb), LOM average (US$1.19/lb Zn, US$0.89/lb Pb)

Table 7: Exchange Rate Sensitivities Analysis

*Scotia Mine Base Case

Workforce

During full-scale operations the Scotia Mine will employ an average of 148 people, with a peak of 165 full time personnel. The majority of the workforce will be scheduled to work on two 12-hour shifts, 365-days per year. Four roster teams are planned to operate on this basis across all operations departments. Administrative staff will work Monday to Friday, for a minimum of 10 hours per day.

It is expected that the majority of personnel will be sourced from the Halifax Regional Municipality and reside within a short commute of the Scotia Mine.

Project Execution

ScoZinc has determined that a number of project execution phases are required for a successful commencement of commercial production, namely, a procurement phase, pre-commercial production phase, and a commercial production phase. Due to ScoZinc's existing Environmental Assessment Approvals and Industrial Approvals, and high-level care and maintenance status, the Scotia Mine has however a relatively short time frame to commercial production of between 9 to 12 months. As such, the Scotia Mine is considered a near-term producer.

Effective and Filing Date

The Technical Report has an effective date of July 6, 2020. It will be filed under the Company's profile on SEDAR within the next 45 days of this news release.

Qualified Persons

The 2020 PFS was prepared by Ausenco Engineering Canada Inc. ("Ausenco"), MineTech International Limited ("MineTech"), SRK Consulting (U.S.), Inc. ("SRK"), and Terrane Geoscience Inc. ("Terrane"), with assistance from ScoZinc technical personnel.

The contents of this news release have been reviewed and approved by:

• Tommaso Roberto Raponi, P.Eng. (Ausenco)
• Patrick Hannon, P.Eng. (MineTech)
• Timothy Carew, P.Geo. (SRK)
• Tony Gilman, M.Sc., P.Eng. (Terrane)

Each of the aforementioned individuals are independent Qualified Persons as defined by NI 43-101.

About ScoZinc Mining Ltd.

ScoZinc is a Canadian development company that has full ownership of the Scotia Mine (Zn/Pb) and related facilities near Halifax, Nova Scotia. ScoZinc also holds several prospective exploration licenses nearby its Scotia Mine and in surrounding regions of Nova Scotia.

The Company's common shares are traded on the TSX Venture Exchange under the symbol "SZM".

For more information, please contact:

The Company's corporate filings and technical reports can be viewed on the Company's SEDAR profile at www.sedar.com. Further information on ScoZinc is also available on Facebook at www.facebook.com/ScoZinc, Twitter at www.twitter.com/ScoZincMining, and LinkedIn at www.linkedin.com/company/scozinc-mining-ltd.

CAUTIONARY STATEMENTS

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

This news release includes certain forward-looking statements which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management's expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, the Company's objectives, goals or future plans, statements, potential mineralization, exploration and development results, the estimation of mineral resources, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions. There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from ScoZinc's expectations include, among others, the degree to which mineral resource and reserve estimates are reflective of actual mineral resources and reserves, the degree to which factors which would make a mineral deposit commercially viable are present, the price of zinc and lead, uncertainties relating to availability and costs of financing needed in the future, changes in equity markets, risks related to international operations, the actual results of current exploration activities, delays in the development of projects, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of metals, ability to predict or counteract potential impact of COVID-19 coronavirus on factors relevant to the Company's business, as well as those factors discussed in the section entitled "Risk Factors" in ScoZinc's Management's Discussion and Analysis. Although ScoZinc has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

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