(Click iamge to play video)
When we last caught up with Vancouver BC-based junior explorer
Callinex Mines Inc. (
TSX-V: CNX,
OTCQX: CLLXF,
Forum) back in
October, the company had just announced a detailed exploration update for its high-grade copper, gold, silver and zinc projects in Manitoba and New Brunswick. And the results were very promising. Since then, the company’s Rainbow Deposit in Manitoba’s Flin Flon Mining District has reported much more than ‘promising – now, extremely high-grade copper intersections which equates to – according to the company – a more attractive development plan.
In this video podcast exclusive, Stockhouse Meia’s Dave Jackson’s caught up company CEO Max Porterfield to update our audience on all the latest and greatest happenings with Callinex Mines Inc.
TRANSCRIPT BELOW:
SH: To start off with, can you tell us a little bit about yourself and the history of the company?
MP: Yeah, sure. I'm actually a dual citizen now. I was raised in the United States here in Texas and immigrated to Canada in 2012. We had a background working with some particular investment firms that specialize in natural resource investing and spent some time with an issuer before taking over Callinex in 2014 and that's when we built the team that we have today from a technical perspective and really, you know, set forth on our ambitious goals to continue the track record of exploration of the companies had historically.
SH: Now Max, can you update our investor audience and your CMX shareholders on any new company developments, especially in the wake of COVID-19.
MP: You know, aside from the pandemic and obviously the impact it's had on everyday life you know for our employees and the contractors that work with the company. We have been uninterrupted. It's been an amazing year. 2020 was a year of the discoveries for the company, we intersected near surface silver discovery, 6.8 kilometers apart in New Brunswick at our Nash Creek project adjacent to our PA stage asset there in the Nash Creek deposit. Since that time we were able to complete a soil sampling campaign there along that 10 kilometer trend across both the silver discoveries without pause and then in Manitoba, we were able to continue to mobilize there in terms of exploration, it's been deemed an essential industry in Manitoba. So we've had an uninterrupted exploration for the entire pandemic and you know, actually we have two drill rigs turning there right now actually, so I'm very, very busy to that and been uninterrupted and had made great strides through discoveries over the past year.
SH: Well, Max you've briefly mentioned in the intro, you've recently announced some exciting new drill results at your clean copper high grade rainbow deposit. Can you elaborate on them?
MP: Yeah, absolutely. So we just announced some significant step outs. One was over 250 meters vertically above the last intersections that we announced from the drilling campaign that ended at the end of last year in the winter season there. With that being said, there was significant wits. They were both over seven meters and both those intersections that we announced over 5% copper equivalent. One of those is over 4% copper. The other one was over 3.3% copper. So again, very, very high grade when we took into account the perspective of the average global copper grade is roughly half percent copper. We far exceed that. So we're quite excited and that's what the two rigs that are turning right now are part of a larger 30,000 meter drilling campaign at the Pine Bay project that hosts the rainbow discovery and that's going to be focused on delineating that resource and continue to grow that through step-out drilling there.
SH: Excellent. Now you've said that there are only two or three places to hit copper grades this high, and one is Africa unheard of in Manitoba. How good can it really get there?
MP: Well, actually it is heard of Manitoba because one of the few places in the world that you can hit these type of grades is in Manitoba the other is more commonly known as in certain terms of these type of grades are in central Africa namely, you know, the Congo, the DRC and obviously you can understand that the geopolitical risks are associated with that. So in terms of Manitoba and its production history, you're talking about almost a hundred years of continuous production, 32 mines and we like to say counting because we do believe in the long-term potential and viability of the rainbow discovery and what it can become through future drilling that we're, you know, unlocking right now through our ongoing operations.
SH: Now, there's been a clear shift in investing with sustainable growth companies like yours and copper and electric vehicles. Can you expand on this initiative for our investor audience?
MP: Yeah, absolutely. So while there's been a kind of a dramatic shift, I think we really owe it to the pandemic in many ways, because that's really what I think caught fire as a way from the hydrocarbon in this kind of concept that you don't want to have exposure to the hydrocarbon in any part of your life even though I think the average person has failed to realize it's probably not going to be a viable context in terms of how readily, you know, oil is used across everything, including plastics but with that being said, when you have a shift to from a hydrocarbon, it's really an electrification of the world, so to speak, and that's going to take huge demand of the metals and obviously winners from that are going to be lithium, nickel, and I think copper is doing quite well to that end but when you're going to have copper production, it's not only, you know, you have a car and electric vehicle, but it's really where those metals source and what is the power generation to those metals that are being sourced.
So with that mindset, and that's kind of a big shift in terms of environmental sustainable growth and this big proponent in terms of ESG shifts that you're seeing from the investor universe, we've really seen a benefit given the fact that the area in the camp is powered by hydroelectric power. In fact, it's a hydroelectric power line and it's just a couple hundred meters away from the rainbow deposit. So we're really ideally positioned for that. We're also really ideally positioned in that the discoveries and all the products are located in proximity to infrastructure, so that, you know, the footprint for discovery and you don't have to have that big infrastructure spend with roads, power access, all going out to these deposits given the fact that the infrastructure is already there. I think that's a real benefit for us as a company.
SH: You've actually just closed in nearly $9 million over subscribed private placement. Very nice. Now this may be news to many investors. Can you impact the benefits of it?
MP: Yeah, so we're very, very pleased. Obviously one of the critical factors or needs for a company like Callinex is you need access to capital and we've always been very, very fortunate to have that support from the investor universe to fund our objectives because we are capital dependent. So we did recently close an $8.8 million financing. It was very, very strong support, and we're really pleased to bring on both new shareholders and also see support from our existing shareholder base as well to complete that financing. What that allows the company to do is currently and over the next year, year and a half is constant drilling with 30,000 meters budgeted this year alone in Manitoba. That's a budget of $5.5 million that'll be spent in Manitoba for drilling out the rainbow discovery and then we also are going to be budgeted for roughly half a million dollars in exploration or in New Brunswick or Nash Creek deposit project to follow up on those near surface silver discoveries that we've tied together nicely with the soil sampling that we've recently announced in January. So again, the capital's critical for the business. Very great to see the support from the institutional support from the investor universe and that's really going to go a long way and unlocking value for shareholder base.
SH: The company looks set for strong growth in 2021. And as you mentioned, you're fully funded. How are you placed to expand operations moving forward?
MP: I think in terms of expansion, we're really focused on the assets and portfolio that we have in addition to the two assets that we've discussed, New Brunswick and obviously namely Manitoba, where a bulk of our exploration dollars are going to be spent this year. We also have the 100% ownership of the point Leamington deposit in Newfoundland that also sits within a mineral lease. That's a historic resource, the sizeable gold copper zinc resource and we're actively working for an updated resource to be published on that property in the very near future and again, we're generating regional exploration targets on that asset, but that is an asset that's within the company that I think is under appreciated and hasn’t really seen a lot of value and I think unlocking that will be critical through the updated resource and then future metallurgical work and exploration in the area there.
SH: Now for companies, shareholders and potential investors, what kind of future development and progress can we expect at your projects in the Bathurst and Buchan's mining districts?
MP: Yeah. So to further expand upon that we are going to be doing a 3000 meter drilling campaign at Nash Creek. It's going to be roughly 15 holes. It's a much more shallow drilling in New Brunswick given the fact that it a near surface discovery on both of those intersections there. So to expand upon that again, 15 holes, 3000 meters, roughly 200 meters each hole, and that'll really allow us to test it, that main controlling fault that has hosted those two drill intercepts that we announced last year that were rich in silver, but also contain zinc and lead. That's also going to fund the updated resource in Newfoundland. That's going to be some re-asking of a store core from the deposits to validate that as well as potentially a small program there to do some follow-up metal electrical work in the future.
SH: I have to mention, Max, that your stock has had a very sharp rise over the last 12 months, nearly six bagger in value. Since then, what can you tell our investor audience regarding the current valuation of your stock and why you think it's still a good value buy right now?
MP: Yeah, so it was extremely valued last time I was here and presented with the company, because at the time we only have between you know, 4 or $5 million market cap and that was a much different metal price environment that was pre discoveries, we expanded upon the nominalization in Nash Creek, where it's already a PEA stage asset that we published in 2018 and that PEA is in the money so to speak because the base case on that PEA is a $1.25 zinc and zinc today trades at a $1.30. So with that being said today, we've got roughly a $40 million market cap, again, as you mentioned, we discussed earlier, we're fully financed. So the enterprise value is roughly 35 million, which is basically the enterprise value of the company back when we announced the PEA before zinc prices had their pretty large fall from a $1.60 a pound down to roughly 90 cents a pound in there for about a year and a half or so. So today you can buy the company full with cashed up treasury, tight capital structure, because we've consolidated the structure that the company is today, which is 13.1 million shares, and a rapidly expanding high grade copper gold, silver, zinc discovery within a mineral lease in very close proximity to Manitoba and we're also working of course, on that updated resource. So there's a lot of catalysts moving forward and expansion of the resources in a much better market and a much better commodity cycle right now to really unlock value for the shareholders moving forward.
SH: Max, can you tell our audience a little bit about your corporate management and board teams along with the experience and innovative ideas that they bring to the metals and mining exploration space?
MP: Sure. I spoke obviously about myself at the start of the conversation today, but our technical team, which I didn't get a chance to really expand upon has had a lot of experience and a lot of success in the discovery of economic base and precious metals, VMS deposits in Canada, Mainly our founder and former chairman Mike Muzylowski, he's an inductee into the Canadian mining hall of fame for the discovery of 12 VMS mines in Manitoba and most notably the discovery of the Trout Lake mine saved the town in 1982 when the original Flin Flon Ore body was at the end of its mine life. So that was a very, very big discovery for that community and in terms of Mike's career and in terms of other members of the team, Jim Paquel one of our geologists as won one of the Bill Dennis award for the triple seven mine and numerous other mines he's given credit with the discovery of in Manitoba, he's got worldwide experience being the former head of Anglo's VMS.
Then also we've got Alan Valves on the team. He has won the Bill Dennis award as well for the Lawler Mine in the Flin Flon, at Snowflake Greenstone Belt. That's currently in production by Hudson Bay as well. So collectively our team has been credited with the discovery of three of the four largest mines in the Flin Flon camp's history and as I mentioned before, that's 32 mines and counting. The only one that was larger was the original Flin but none of them were around to be a part of because, you know, that's quite a long time ago.
SH: Well, finally, Max, if there's anything that I've overlooked, please feel free to elaborate.
MP: No, I just like to reiterate, if you'd like to find out more information on the company, you can do so at our website at callinex.ca, again, as you mentioned at the beginning, we do trade on the Toronto venture exchange under the ticker CNX, but also on the OTC in the United States, under the ticker C L L X F and we're also always available for any questions, feel free to reach out to us directly.
For regular updates, visit
callinex.ca
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.