Callinex Mines (
TSX: V.CNX,
Stock Forum) has been quietly at the wheel working on the development of prospective Flin Flon and Pine Bay VMS projects located near Flin Flon, Manitoba. However, regardless how well the company can hold the purse strings, exploration costs money and in this present depressed resource market, that money is hard to come by.
Therefore, it is especially
big news and a huge vote of confidence when juniors are able to procure funds to push forward exploration and that is just what Callinex has managed to do when the company announced today that it intends to complete a $3.0 million non-brokered private placement.
You may say, ‘sure, everybody says that’, but Callinex has something to back that statement up with in the form of Resource Capital Funds (“RCF”), a top equity fund with most of its fingers in the mining sector who has invested in 135 companies since 1998. You see, RCF is expected to snap up a majority of the shares made available in this offering and as a result will become the largest single shareholder in the company, making Callinex the second company in its exploration portfolio. I'd say that was pretty special.
This is a big step for Callinex Mines which, when I spoke to Max Porterfield when he took over as President and CEO back in September 2014, had been focused on graphite and was in the midst of developing its Neuron property. Porterfield saw the writing on the wall and knew that VMS was the way to go. He then pivoted the company’s direction while watching the coffers carefully.
The transition has been successful and Callinex is pushing forward its VMS exploration efforts with its recently announced procurement of work permits which would allow it to carry out a 7-hole, 2,500 metre Phase II drill program at Pine Bay and Flin Flon. Porterfield, always focused on maximizing the available capital managed to cook up a shares for services deal with Cyr Drilling International who had just completed the previous 5-hole program at Pine Bay.
This newest offering will consist of 5.0 million flow-through shares at $0.30 per shares for gross proceeds of $1.5 million and 5.0 million non-flow through shares at $0.30 per shares for gross proceeds of $1.5 million. This all makes for a total of $3.0 million.
Porterfield commented on the announced raise, “We are excited to welcome the leading mining-focused private equity firm as a major shareholder of Callinex. Resource Capital Funds, which manages over US $2.5 billion in assets, is a patient long-term investor that actively partners with companies to build strong, successful and sustainable businesses. We believe RCF's strategic investment in Callinex provides a major competitive advantage that will be instrumental for increasing shareholder value.”
He went on, “Callinex is also utilizing the new existing security holder exemption to provide all current shareholders an opportunity to participate in the financing at the same terms as RCF and the Company's insiders. These funds will be invaluable to the Company as we advance our strategy to identify economically significant VMS deposits in the Flin Flon area of Manitoba.”
Will Porterfield and Callinex make good on their intentions? There’s never any guarantees but the results both historical and current paint a positive picture and Porterfield certainly has the drive and frugality to push Callinex through the exploration process. I will be keeping my eye on this one as it completes its next drill campaign, but don’t take my word for it, do your own due diligence.
Callinex Mines was in the news recently when
the Vancouver-based junior miner announced adding leading VMS experts to the team back at the end of June.
Shares jumped 15.00% on the news to $0.345 per share.
Currently there are 34.4m outstanding shares with a market cap of $11.9 million.