Yukon Zinc Corporation Announces $5 Million Financing

Yukon Zinc Corporation Announces $5 Million Financing

Yukon Zinc Corporation (YZC.TSX-V) is pleased to announce that it is undertaking a brokered financing for proceeds of up to $5 million with a syndicate led by Paradigm Capital Inc. and Blackmont Capital Inc., and including Dundee Securities Corporation and Canaccord Capital Corporation, collectively (the ”Agents”). The financing will consist of approximately $3 million of Flow-through Common shares and $2 million of Units consisting of one common share and ½ warrant, with the warrant having a one year term.

The Flow-through Common Shares and Units will be sold by private placement to accredited investors in British Columbia, Alberta, Ontario and Quebec and in such jurisdictions outside Canada, including the United States, as the Agents may agree. The pricing of the offering will be determined in the context of the market with the Closing Date scheduled for July 31, 2006. The Agents will receive a 6% selling commission on all Flow-through Common Shares and Units sold, payable in cash on the Closing Date. In addition, the Company shall grant the Agents, at Closing, compensation options equal to 7% of the aggregate number of Flow-through Common shares and Units issued in the Offering entitling the Agents, for a period of 12 months from the Closing Date, to acquire that number of Common Shares at a price that is equal to the issue price of the Units and Flow-Through Shares under the Offering.

The net proceeds from the Offering will be used for continuation of development activities upon the Wolverine Project and for general working capital. The Offering is subject to receipt of regulatory acceptance and approval of the Board of Yukon Zinc Corporation.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. All dollars in this release are in Canadian funds.

Yukon Zinc Corporation is focused on the development of the Wolverine deposit as the Yukon’s next significant zinc-silver mine and the exploration of the Finlayson District as Canada’s newest Volcanogenic Massive Sulphide District.

For more information contact:

Dr. Harlan Meade, President and CEO Shae Dalphond, Manager Investor Communications Telephone: (604) 682-5474 Toll-free: 1-877-682-5474 International Toll Free 800-8682-5474 Facsimile (604) 682-5404 info@yukonzinc.com


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