Callinex Mines (CNX.V) has now closed the previously announced acquisitions of the Point Leamington, Nash Creek and Superjack VMS deposits, in a move to increase the exposure to the zinc market in its project portfolio.
We have already covered this acquisition in a previous blog post (you can read it here), but it looks like the market has completely forgotten about these acquisitions, as Callinex’ share price has now increased by more than 50% since the news was announced.
As mentioned before, we are very impressed with the acquisition of the Point Leamington VMS project from Newmarket Gold (NMI.TO), as Callinex was able to secure an inferred resource estimate containing almost 600 million pounds of zinc, 7.6 million ounces of silver, almost 485,000 ounces gold and 130 million pounds of copper. The total in situ value of the resource is approximately $1B, and Callinex was able to acquire the project for just half a million Canadian Dollar in cash and shares.
Of course, much more work is needed to design a viable mine plan, but with the zinc price now trading at approximately $1/lbs, the future of Point Leamington does look very promising and we will give the project quite a bit of attention in our upcoming Q&A report with Callinex’ management team as the upcoming metallurgical test work at Point Leamington might be very important to determine the future of Point Leamington as the recovery rate of the zinc and gold could be expected to increase. On top of that, Callinex will have a closer look at the correlation between the arsenic values and the gold values as it’s looking increasingly likely the company will be able to recover enough gold to sell it as a by-product.