Callinex Mines Inc. [TSXV: CNX; OTCQX: CLLXF] posted plans to advance the 100%-owned Point Leamington deposit, Newfoundland. The project hosts a volcanogenic massive sulphide (VMS) deposit which contains significant gold, copper, zinc and silver mineralization and is open for expansion. The deposit is located within a mineral lease and is accessible by road followed by trails and is approximately 37km from the city of Grand Falls-Windsor and is also 20km from the Newfoundland hydroelectric power grid.
Max Porterfield, President & CEO of Callinex Mines, stated, “Point Leamington is a large, near surface VMS deposit in the mining friendly province of Newfoundland that has a considerable gold resource in addition to copper, zinc and silver. Given the significant rise in metal prices, in particular gold, the intrinsic value of the Point Leamington deposit has risen dramatically overall and in relation to other deposits Callinex possesses.”
Porterfield continued, “Additionally, Callinex has strengthened our team with expertise to maximize value at Point Leamington and other projects within the Company’s robust portfolio. We plan to aggressively advance this Project with an exploration campaign to expand the known resource and discover new deposits on the broader land package in tandem with mineralogical and metallurgical test work.”
Over the last several years Callinex has quietly continued to work on the Point Leamington Project in preparation to advance it at an optimum time. The strong up-move in gold prices over the last year makes now a great time to renew our focus on this Deposit.
There is an opportunity to significantly expand a higher-grade zone of the deposit with additional drilling at depth. The most recent hole drilled in 2004, PL04-077, intersected 4.67m grading 4.37 g/t Au, 15.05% Zn, 57.88 g/t Ag and 0.36% Cu and PL-056 intersected 4.51m grading 2.27 g/t Au, 8.84% Zn, 81.66 g/t Ag and 0.61% Cu, which are the two deepest holes to intersect the Deposit. Drill holes PL04-077 and PL-056 are located 150 metres apart and the Deposit is open for extension below the 435 metre level.
The deposit also has potential to host additional tonnage along strike. Drill hole PL04-073, drilled during the 2004 exploration campaign, intersected 3.9m grading 1.65 g/t Au, 5.18% Zn, 33.1 g/t Ag and 0.27% Cu. The company is currently reprocessing historic borehole pulse electromagnetic data surrounding the largely untested area and additional drilling may be completed in the future.
The Point Leamington Deposit style of mineralization, alteration, and host rocks suggests that it is a Kuroko-type VMS deposit hosted in Cambro-Ordovician age rocks, which are similar to the past-producing Buchans and Duck Pond Mines in the Point Leamington area. The massive sulphides occur at a transitional period between altered felsic volcanics (dominantly flows, breccias, and pyroclastic) and a sedimentary/mafic volcanic sequence. As a result of reviewing historical regional data, the company believes that there is significant opportunity to discover additional deposits with further exploration efforts.
Additionally, Callinex’s larger exploration land package at the project includes a number of untested geophysical anomalies within favorable geologic units that will be further refined with plans to be drilled. These target areas have been identified after reviewing Callinex’s proprietary exploration database including over 2,400 line-km of modern airborne electromagnetic survey data with a focus on nearby areas with a similar geological setting as the deposit.
Callinex has engaged a leading consulting firm with a core expertise in the economic metallurgical recovery of gold, to oversee and manage metallurgical work at the deposit moving forward. From a review of prior mineralogical studies and metallurgical test work, a process will be put in place to confirm recovery of copper and zinc as well as a promising processing route has been identified for the recovery of gold from the Deposit.
The company plans to collect representative samples from both identified gold zones in the deposit, to be used initially for a detailed mineralogical study. These samples will be used in a bench scale metallurgical test program, involving a flotation program to recover copper and zinc, separate arsenopyrite from pyrite, and to recover liberated gold.
The bench scale test work is expected to be confirmed by a test program in a respected commercial lab. Gold concentrate produced will be processed with a focus on leach alternatives to maximize gold recovery or sold in the open market. The results of this multi-phase metallurgical program will be used to generate a preliminary economic evaluation of the entire Project.
The company also intends to complete an up to a 5,000-metre exploration campaign at the project to grow the high-grade mineralization associated with the deposit, test newly identified high priority targets and collect samples to complete mineralogical studies and metallurgical testwork for the economic recovery of the metals with a particular focus on gold.
The Point Leamington Project, consisting of Mining Lease 136 (2655), is located approximately 37km by road and trails from the City of Grand Falls-Windsor and approximately 20km from the provincial power grid. The Deposit is a large, felsic-hosted VMS deposit that dips 70 degrees to the west, has a strike length of 500m and a maximum thickness of 85m.
Massive sulphides have been intercepted to a depth of 360m below surface from a total of approximately 21,714 metres of drilling in 72 drill holes. Regional government mapping and lithogeochemical sampling has indicated that Point Leamington’s host volcanic stratigraphy extends well beyond the vicinity of the Deposit.
Callinex’s focus is highlighted by the rapidly expanding Rainbow deposit at its rich VMS Pine Bay Project located near existing infrastructure in the Flin Flon Mining District. Callinex prepared an indicated mineral resource on the Rainbow deposit of 3.44 Mt grading 3.59% CuEq for 272.4 Mlb CuEq (238.3 Mlb Cu, 56.9 Mlb Zn, 37.6 koz Au, 692.8 koz Ag, 2.3 Mlb Pb), an inferred mineral resource on the Rainbow deposit of 1.28 Mt grading 2.95% CuEq containing 83.4 Mlb CuEq (72.1 Mlb Cu, 19.5 Mlb Zn, 11.1 koz Au, 222.2 Koz Ag, 0.8 Mlb Pb) and an inferred mineral resource at the Pine Bay deposit of 1.0 Mt grading 2.62% Cu containing 58.1 Mlb Cu.
The second asset in the portfolio is the Nash Creek Project located in the VMS rich Bathurst Mining District of New Brunswick. A 2018 PEA generates a strong economic return with a pre-tax IRR of 34.1% (25.2% post-tax) and NPV8% of $230 million ($128 million post-tax) at $1.25 Zinc (see news release dated May 14, 2018).
The third asset, 100%-owned Point Leamington Deposit in Newfoundland, is located in one of the richest VMS and Gold Districts in Canada. Callinex prepared a pit constrained Indicated Mineral Resource of 5.0 Mt grading 2.5 g/t AuEq for 402 koz AuEq (145.7 koz gold, 60.0 Mlb copper, 153.5 Mlb zinc, 2.0 Moz silver, 1.5 Mlb lead), a pit constrained Inferred Mineral Resource of 13.7 Mt grading 2.24 g/t AuEq for 986.5 koz AuEq (354.8 koz gold, 110.2 Mlb copper, 527.3 Mlb zinc, 6.2 Moz silver, 7.0 Mlb lead) and an out-of-pit Inferred Mineral Resource of 1.7 Mt grading 3.06 g/t AuEq for 168.5 koz AuEq (65.4 koz gold, 13.3 Mlb copper, 102.9 Mlb zinc, 1.4 Moz Ag, 2.6 Mlb lead).
