Callinex Mines (CNX.V) has announced it has entered into an option agreement to acquire the full ownership of the Big Island project. Big Island is located just 10 kilometers from HudBay Mining’s (HBM, HBM.TO) 777 processing plant. This addition to the already existing land package makes Callinex one of the largest land owners in the region. Callinex can acquire 100% of the property by paying C$265,000 in cash and issuing 750,000 shares and a 1% NSR (which could be repurchased for C$1M).
According to CEO Porterfield, the Big Island zone hosts one of the highest grade zinc and gold intervals in the entire district, and indeed, assay results from a 1987-1988 drill campaign executed by Westfield Minerals intersected 12.4 meters of almost 34% zinc-equivalent, and almost 20 meters of 24% zinc-equivalent. What’s really important here is the fact the majority of the zinc-equivalent grade effectively consists of zinc.
After completing a drill program in 1989, the previous operator estimated there would be a mineralized body of approximately 200,000 tonnes at 10-15% zinc, 1-2% copper, 1.7-3.1 g/t gold and 1-3 ounces silver per tonne of rock. Of course, this was a back of the envelope guesstimate, but it does give Callinex a good idea of where to look first. Once the drill program at Callinex’ Pine Bay project will be completed, a field program is expected to commence at Big Island, which could then be included in the summer drill campaign in the Flin Flon district.