VANCOUVER (miningweekly.com) – Base metals-focused Callinex Mines has made public the results of a preliminary economic assessment (PEA) examining the production of zinc from the combined 100%-owned Nash Creek and Superjack projects, located in New Brunswick’s prolific Bathurst Mining District, in Maritime Canada.
The PEA outlines a ten-year, 3 900 t/d openpit mining operation with a dense media separation (DMS) plant and 1 950 t/d conventional flotation process facility at the Nash Creek project.
The mine plan advances a strong economic return with an internal rate of return 25.2%, and an after-tax net present value, at an 8% discount rate, of C$128-million, the company reported, sending its TSX-V-listed equity soaring 35% to an intra-day high of C$0.31 a share. The PEA was based on an assumed zinc price of $1.25/lb
Initial capital costs are pegged at C$168-million, including an 18% contingency, to build an operation capable of producing 77-million pounds of zinc, 15-million pounds of lead and 437 000 oz of silver over the initial mine life. Life-of-mine all-in sustaining costs were estimated to average C$0.37/lb of zinc produced, net of by-product credits.
Vancouver-based Callinex advised that it believes there is a clear opportunity to significantly enhance the project economics with further exploration over the district-scale land package, that could allow for higher-grade material to be scheduled earlier in the mine plan.
“We are very pleased with the results of this initial PEA that outlines the potential for a new zinc mine at our Nash Creek project. The results of this PEA, combined with close proximity to infrastructure and a district-scale land package, represents a highly attractive scenario for Callinex shareholders,” president and CEO Max Porterfield said.
The PEA assumes a conventional truck and excavator openpit mining operation, at an average throughput rate of 1.43-million tonnes a year. Mining operations will reach a yearly average total material movement of ten-million tonnes using 11.5 m3 diesel hydraulic excavators, 90 t haulage trucks, and track mounted diesel powered drill rigs with up to 200 mm diameter blastholes drilled on 5 m and 10 m height benches.
The mined material will be processed at a new 3 950 t/d DMS plant and a 1 950 t/d grinding and flotation plant located on the project site. Two concentrates will be produced: zinc/silver and lead/silver.
The Nash Creek deposit is open for expansion in several directions with relatively few drill holes located outside of the mineral resource area. The 2017 drilling campaign on the Nash Creek deposit, the first to ever be completed by the company, led to a 74% increase in indicated resource zinc-equivalent pounds and a 385% increase in inferred zinc equivalent pounds.
The company advised that the project also encompasses several untested high-grade mineral occurrences over a highly prospective 20-km-long trend. The company plans to undertake permitting while aggressively advancing exploration opportunities within this underexplored 150 km² district-scale land package.
The Superjack project is located 90 km by highway from the Nash Creek project, and 15 km southwest of the Brunswick No 12 mine, which was previously the largest underground mine in the world. The Nash Creek deposit is located only 25 km by road from Glencore’s Brunswick smelter, and a deepwater port, railway and power plant at Belledune. Mineralisation at the Superjack project is hosted within a similar geological environment as the ‘supergiant’ Brunswick No 12 mine and Trevali Mining’s nearby Caribou mine.
The PEA was based on indicated resources identified at Nash Creek totalling 13.59-million tonnes grading 3.21% zinc-equivalent, for 963.4-million pounds of zinc-equivalent, with 9.14-million tonnes grading 3.64% zinc-equivalent languishing in the inferred categories at both the Nash Creek and Superjack deposits, for 734.7-million pounds of zinc-equivalent.