Max Porterfield, president and CEO of Callinex Mines (TSXV: CNX; US-OTC: CLLXF) thinks he’s got the projects, the people and soon, some of the money, to have a decent shot at making the next meaningful discovery in Manitoba’s prolific Flin Flon belt.
The junior owns 100% of two projects that are within 16 km of Hudbay Minerals’ (TSX: HBM; NYSE: HBM) Triple Seven (777) zinc-copper-gold-silver mine and its Flin Flon concentrator, and in June Callinex appointed volcanogenic massive sulphide (VMS) experts Alan Vowles and J.J. O’Donnell to its technical team, both of whom have a history at Hudbay.
Callinex has caught the eye of Resource Capital Funds (RCF), a U.S.-headquartered private equity fund that, since 1998, has supported 135 mining and mining-services companies in over 29 commodities and 44 countries.
On July 13, Callinex announced that it expects RCF will acquire most of its upcoming $3-million, non-brokered private placement that will pay for more exploration at Callinex’s 100%-owned Pine Bay and Flin Flon projects.
“As far as I know this will be RCF’s first foray into an earlier-stage exploration company — it’s a new direction for them,” Porter field says in a telephone interview with The Northern Miner from his office in Vancouver. “We’re excited to have them, and they bring a lot more to the table and a lot more value-add than just their capital.”
Under terms of the planned private placement, Callinex will issue 5 million flow-through shares at 30¢ per share, and another 5 million non-flow-through shares at the same price. The offering is expected to close on July 27.
RCF is interested in Callinex for a number of reasons, Porterfield says, including its portfolio of properties that haven’t seen much modern-day exploration, their closeness to infrastructure and Hudbay’s 777 mine, interesting geology and a strong technical team.
Adding Vowles and O’Donnell in June was a major coup, Porterfield says. Vowles was a member of the team in 2009 that earned PDAC’s Bill Dennis Prospector of the Year Award for their role in discovering Hudbay’s Lalor mine, and he also helped find Hudbay’s Chisel North mine.
O’Donnell served as a senior mine geologist for Hudbay’s 777 mine, and became a specialist on VMS deposits in the Flin Flon area over a 25-year career. O’Donnell has also led a major expansion at the Howards Pass lead-zinc project in the Yukon for Selywn Chihong Mining, where he serves as vice-president of exploration.
At the board level, Callinex boasts Mike Muzylowski as executive chairman, a geologist who helped discover and develop 16 mineral deposits that became producing mines: 13 in Manitoba, two in Nevada and one in the Northwest Territories.
Callinex has just finished its first phase of drilling on the Pine Bay project, which is the more advanced of the two properties, and the second phase is about to start shortly, for a total drill program of 4,000 metres this year. In the last year it has digitized over 1,000 drill holes from the public and private domain, so that the technical team of geophysicists and geologists can recommend drill targets.
The company acquired Pine Bay in 2009, and the 60 sq. km property hosts four historic mines and a historic resource of 1.6 million tonnes grading 2.8% copper equivalent.
Placer and Inmet explored Pine Bay in the 1990s, Porterfield says, and had a fairly large exploration target on the property, but not much has been done on it since then, and the mining executive is convinced that with subsequent advancements in geophysics and exploration technology, there is much more mineralization to be found and incorporated into a National Instrument 43-101 compliant resource.
“When Placer and Inmet had the property, they only drilled 3,000 metres or so, but Placer at the time was switching its focus away from base metals to precious metals,” Porterfield says, adding that David Thomas, who is now on RCF’s investment committee, had worked at Pine Bay when he was at Inmet in 1995 and 1996.
Its other project, Flin Flon, covers 24.5 sq. km and has had limited historic drilling, but is surrounded by Hudbay claims. A 2012 airborne survey identified several geophysical targets on the property, and Porterfield is excited about the project because it has “the right rock types.”
“You’re seeing the same rock type at Flin Flon that you see at the Triple Seven mine,” he says. “You’re in the right host rock, and with new advancements in geophysics and other modern day tools, we can try to define deposits in that host rock that might have been missed before.”
Porterfield also points out that Hudbay’s 777 mine only has five years of mine life left, and the miner is looking to extend it. “With that being said, the only other mine that is feeding the processing plant is Reed Lake, and they’re trucking ore 130 km to 777,” he says. “Hudbay has been supportive of what we’ve accomplished.”