Callinex Mines (CNX.V) has had a very busy PDAC conference as the company announced on the first business day of the conference it has effectively made a new discovery at its Pine Bay project. As you remember from our previous reports and blog posts, Callinex Mines was gearing up for a very busy winter exploration program, and the decision to go ahead with a rather sizeable exploration program has now paid off as the company has now officially confirmed the discovery and existence of a high-grade copper and zinc zone at Pine Bay within walking distance from HudBay Minerals (HBM) 777 mine in Manitoba.
The drill bit intersected 3.3 meters of 3.2% copper and almost 6 meters of 2.2% zinc, just 450 meters towards the east from the Pine Bay deposit and mine shaft. Not only is the discovery hole locating a potentially sizeable ore body very close to existing infrastructure, the exact size of the mineralized zone is currently still unknown as the discovery remains open along strike and at depth.
With this discovery, Callinew is proving the Placer Dome geologists right, as they had been asking the company’s headquarters permission to complete another drill program at Pine Bay, which was denied by the Placer HQ in the nineties.
The impact of this discover shouldn’t be underestimated. Not only is this exactly what Callinex Mines had been searching for, it will make HudBay very nervous. We originally liked Callinex as a ‘nearology’ play as the nearby 777 concentrator owned by HudBay is running out of ore by the end of this decade. This puts HudBay in an awkward position; it will either need to source (and develop!) new potential feed zones fast or it will be sitting on an asset that could very well be worthless for HudBay. The most logical way out of this issue would be for HudBay to get its hands on as much ore and mineralization as possible, and that’s why we think Callinex Mines’ discovery could be important for HudBay as well.