Callinex Mines Inc. [CNX-TSXV, CLLXF-OTCQX: CLLXF] on Monday May 14 released the results of an independent initial preliminary economic assessment for the companyâ€™s 100%-owned Nash Creek and Superjack projectsÂ in the Bathurst Mining district of New Brunswick.
Callinex has a portfolio of projects in the Bathurst Mining District that is led by its Nash Creek Project, which hosts a large, near-surface zinc-lead-silver deposit. The portfolio includes the Superjack Project, which is located about 50 km south of Nash Creek.
The initial preliminary economic estimate (PEA) outlines a 10-year, 3,900 tonne-per-day open-pit mining operation with a dense media separation plant and 1,950 tonnes-per-day conventional flotation process facility at the Nash Creek project.
Highlights from the PEA are as follows:
- Average annual production of 77 million pounds of zinc, 15 million pounds of lead, and 437,000 ounces of silver over a 10-year mine life.
- Life of mine all-in sustaining costs of $0.37 per pound of zinc produced, net by-product credits.
- Total pre-production capital costs of $168 million (including 18% contingency).
- Life-of-mine undiscounted pre-tax cash flow of $483 million ($293 million post-tax).
â€œWe are very pleased with the results of this initial PEA that outlines the potential for a new zinc mine at our Nash Creek project,â€ said Callinex President and CEO Max Porterfield. â€œThe results of this PEA, combined with close proximity to infrastructure and district-scale land package, represents a highly attractive scenario for Callinex shareholders,â€ he said.
On Monday, Callinex shares jumped 21.28% or $0.05 to 28.5 cents on volume of 206,558. The shares trade in a 52-week range of 47.5 cents and 22 cents.
News of the PEA comes after Callinex recently said a new resource estimate has outlined a major increase in contained zinc, lead and silver mineralization within the indicated and inferred resource categories at the companyâ€™s Nash Creek project.
The company said its initial exploration program in 2017 has materially expanded the near surface deposit and led to an increase in indicated zinc equivalent pounds by 74% to 963 million pounds. It said the inferred zinc equivalent pounds have increased by 385% to 407 million pounds.
According to the updated independent NI 43-101 compliant mineral resource estimate, the current indicated mineral resource now stands at 13.6 million tonnes, averaging 3.2% zinc equivalent (2.7% zinc, 0.6% lead, and 17.8 g/t silver) containing 963 million pounds of zinc equivalent mineralization. On top of that is an inferred mineral resource totalling 5.9 million tonnes averaging 3.1% zinc equivalent (2.7% zinc, 0.5% lead and 14 g/t silver) containing 407 million pounds of zinc equivalent mineralization.
â€œThese results confirm our belief that the Nash Creek Project represents a compelling exploration and development opportunity given extensive near surface zinc mineralization coupled with excellent nearby infrastructure,â€ said Porterfield.
â€œFurthermore, the initial success from our 2017 drilling campaign demonstrates the potential to rapidly expand the Nash Creek zinc deposit, which remains open in multiple directions.â€