Canadian Zinc said an RCF subsidiary had agreed to buy 100 million shares at C20c each for gross proceeds of $20 million.

It would also be issued 50 million short-dated warrants which if exercised in full would generate an additional $12.5 million and increase its stake from the current 19.7% up to 48.5%.

Chairman and CEO John Kearney said the 20c raising represented a 61% premium over the share's 10-day volume weighted average price as of May 14.

"This $20 million equity financing by RCF is another strong vote of confidence in the company's potential and the viability of the Prairie Creek project," he said.

Don MacDonald was appointed president and would assume the role of CEO, subject to the expected approval of the proposed financing by shareholders at a June AGM.

Canadian Zinc plans to use the proceeds to progress Prairie Creek including engineering and permitting work, plus working capital and to repay a US$10 million loan advanced by RCF VI in December. 

Prairie Creek would produce an annual 95 million pounds of zinc, 105Mlb lead and 2.1 million ounces of silver over a 15-year minelife, according to a 2017 feasibility study that put capex at $279 million and an IRR at 18%.

The company is also planning site and underground preparation and other programs to further de-risk the project this year.

Canadian Zinc shares rose 4% to C13c but are down more than 23% this year, valuing it at $34.6 million.