a leading zinc exploration and development company...callinex corporate presentation tsx-v: cnx i...
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A L e a d i n g Z i n c e x p l o r a t i o n a n dD e v e l o p m e n t c o m p a n y
TSX-V: CNX I OTC: CLLXF
This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based on
the current, estimates and projections of the Company or assumptions based on information currently available to the Company. Such forward-
looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions. The
Company cannot give assurance to the correctness of such information and statements. These forward-looking information and statements can
generally be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use terminology
such as “targets”, “believes”, “expects”, “aims”, “assumes”, “intends”, “plans”, “seeks”, “will”, “may”, “anticipates”, “would”, “could”, “continues”,
“estimate”, “milestone” or other words of similar meaning and similar expressions or the negatives thereof. By their nature, forward-looking
information and statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company to differ materially from any future results, performance or achievements that may be expressed or
implied by the forward-looking information and statements in this presentation. Should one or more of these risks or uncertainties materialize, or
should any underlying assumptions prove to be incorrect, the Company’s actual financial condition or results of operations could differ materially
from that or those described herein as anticipated, believed, estimated or expected. Any forward-looking information or statements in this
presentation speak only as at the date of this presentation. Except under the applicable securities laws, the Company does not intend, and
expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of the information included in this presentation, including
forward looking information and statements, whether to reflect changes in the Company’s expectations with regard thereto or as a result of new
information, future events, changes in conditions or circumstances or otherwise on which any statement in this presentation is based. Given the
aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements.
The technical content of this presentation has been reviewed and approved by JJ O’Donnell, P.Geo, a consultant to the Company, and a Qualified
Person as defined by National Instrument 43-101.
F O R W A R D L O O K I N G I N F O R M A T I O N2
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Callinan Mines, founded by Jack Callinan in 1927, has had a major presence in the Flin Flon mining district in Manitoba, Canada
777 VMS Mine, discovered on Callinan claims, commences production and royalty payments begin
Callinan Mines splits into two entities: Callinan Royalties and Callinex, which holds the exploration portfolio today
Callinex renews exploration focus on zinc and copper-rich VMS deposits
Callinex acquires a portfolio of zinc assets with zinc prices near five year lows
Announces major expansion of the Nash Creek Deposit and maiden PEA
1927
2011
O U R H I S T O R Y
2014
2016
2018
2004 To discover and develop
base and precious metal
rich deposits within
established Canadian
mining districts
O U R M I S S I O N
FOCUSED ON BASE METAL DISTRICTS
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C o r p o r a t e o v e r v i e w
59%
21%
20%
retail investors
institutions
insiders & close associates
capital stru ctu r e enter pr ise valu eown ersh i p b r eakd own
- Sprott Group- Delbrook Capital Advisors
Shares Outstanding
85.8M
Options Outstanding*
6.1M($0.34 VWAP)
(Excludes 6.1M RSU’s with a 10 year vesting schedule)
Warrants Outstanding
4.0M($0.75 VWAP)
Market Cap
$9.4M
Debt
$0
Cash
$2.9MAs of 12/31/2018
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r ecent trad i n gshar e per fo r man ce
Closing Price(05/28/2019)
$0.065
52-Week Range
$0.065 - $0.255
Average Daily Volume (1 - mo)
52,809
TSX-V: CNX I OTCQX: CLLXF5
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5 Year Correlation between Zinc Prices and LME Inventory Levels
Mar14
0.60
0.80
1.00
1.20
USD
/ lb
Tons
1.40
1.60
1.80 900000
7000000
5000000
3000000
8000000
6000000
4000000
2000000
1000000
Jan16Aug14 Jul16 Nov17Feb15 Dec16 May18Jul15 Jun17 Oct18
ZINC PRICES LME STOCK LEVELS
ACQUIRES ZINC PORTFOLIO
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ANNOUNCES MAIDEN PEA AT NASH CREEK
Max PorterfieldCEO, President and Director
Over ten years of experience in natural resources and financial markets, previously with Brazil Resources Inc., Uranium Energy Corp. and US Global Investors. He is a graduate of Texas Tech University, with a bachelor’s degree in business administration.
Killian Ruby Chief financial officer
A Chartered Professional Accountant and was formerly an Assurance Partner at Wolrige Mahon LLP (now Baker Tilly Canada), and prior to that a Senior Manager with KPMG, working predominantly with public companies.
James Pickell Consulting geologist
Over 40 years of VMS exploration experience globally. Notable discoveries include the Callinan North, Konuto Lake and 777 ore bodies within the Flin Flon district of Manitoba, Canada. Mr. Pickell is a recipient of the PDAC Bill Dennis Prospector of the Year Award for his role in the discovery of the 777 Mine.
JJ O’Donnell Consulting geologist
Over 25 years of VMS exploration experience within Canada while holding senior positions with Callinex, HudBay,Selwyn Chihong Mining and Granges. Mr. O’Donnell has been instrumental in the exploration and development of the world-class Howard’s Pass Zinc Project located in the Yukon, Canada.
o u r T E A M
Mike Muzylowski consulting geologist & Advisor
Involved in the discovery of 12 VMS mines in the Flin Flon district of Manitoba, Canada. His discoveries include the Trout Lake mine, which operated from 1982-2012. Mr. Muzylowski received the 1988
Alan Vowles consulting geophysicist
Over 35 years of VMS exploration experience within the North America and an integral member of the HudBay team that discovered the Lalor deposit in Saskatchewan. Mr. Vowles is a recipient of the PDAC Bill Dennis Prospector of the Year Award for his role in the discovery of the Lalor Mine.
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portfolio of zinc assets
• Portfolio of advanced stage zinc rich VMS deposits located in established Canadian mining jurisdictions
• All mineral resources start at or near surface
• Deposits located near processing facilities and essential mining infrastructure
• Provides exposure to rising metal prices with deposits containing sizeable zinc, gold and silver resources
Buchans District
Bathurst District
Flin Flon District
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bathurst overviewQuebec
N
Bathurst
NEW BRUNSWICK
Caribou Mine & Mill
Brunswick Mine #12
Brunswick Mine #6
Heath Steele Mine
SUPERJACK
HEADWAY
NASH CREEK
20 km
LEGEND
Processing Facility Lead Smelter Power Station
Power Rail Station
Rail Deep Water Port
Mine Road City
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bathurst MINING District
Modified from Goodfellow, 2003Clusters of deposits make up the Bathurst Mining District
CLUSTER EFFECT VMS DEPOSITS
PRODUCTION HISTORY
One of the largest volcanic-hostedsulphide belts in the world with morethan 130Mt of ore produced, commonlyZn-Pb-Cu-Ag-Au
GEOLOGICAL ENDOWMENT
Over 45 volcanic-hosted massive sulphide deposits including the 230Mt Brunswick No. 12, 70 Mt Caribou Mine and 69 Mt Heath Steel Mine
MINING INFRASTRUCTURE
Great access to power, water, roads and processing facilities in a major mining district
30
20
10
5
3
10.1 1 10 100 1000
Pb +
Zn
(wt.
%)
Million Tonnes
Caribou
BMS #12
SuperjackNash Creek
Quebec
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Quebec
N
• 2018 PEA outlines outlines a 10-year, 3,900 tpd open pit mining operation with a dense media separation (“DMS”) plant and 1,950 tpd conventional flotation mill
• Indicated resource containing 963 million pounds of Zn Eq. contained within 13.6Mt grading 3.2% Zn Eq. and an Inferred resource containing 407 million pounds of Zn Eq. contained within 5.9Mt grading 3.1% Zn Eq.
• World-class infrastructure with highway and transmission lines 1 km from deposit; seaport, smelter, railway and power plant <25 km by road
• District-scale, 150 km2 land package hosting the Nash Creek deposit that extends for +2 km and is open along strike in both directions
n a s h c r e e k p r o j e c t
SUPERJACK
NASH CREEK
Caribou Mine
Brunswick Mine #12
Brunswick Mine #6
Heath Steele Mine
Bathurst
25 KM
N
20 km
LEGEND
Processing Facility Lead Smelter Power Station
Power Rail Station
Rail Deep Water Port
Mine Road City
HEADWAY
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I n f r a s t r u c t u r e A d va n ta g e at N a s h C r e e k12
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D i s t r i c t- s c a l e P o t e n t i a l BASE CASE SCENARIO
m a i d e n p e a r e s u lt s
14.4 Mt @ 3.7%MINED MINERALIZATION (DILUTED ZN EQ.)
$80.13NET SMELTER RETURN ($/T OF DMS FEED)
$168MPRE-PRODUCTION CAPEX
$230M / $128MPRE-TAX/AFTER-TAX NPV (8%)
~96M PoundsAVERAGE ANNUAL PRODUCTION (ZN EQ.)
$30.94TOTAL OPERATING COST ($/T OF DMS FEED)
2.8 YearsAFTER-TAX PAYBACK
34% / 25%PRE-TAX/AFTER-TAX IRR
• Located in emerging mineral belt adjacent to traditional “Bathurst” area
• Robust track record of resource growth with additional drilling
• Several high-grade mineral occurrences with no known previous drilling
VERSATILE: POTENTIAL TO INCREASE
SCALE OR FOCUS ON A SMALLER, HIGHER
MARGIN TOLL MINING OPERATION
(1) See news release dated May 14, 2018. Base case parameters assume a metal prices of US$1.25/lb Zn, $1.10/lb Pb and $17/oz, and an exchange rate (US$ to C$) of 0.77. All currencies are reported in Canadian dollars unless otherwise specified. The PEA is preliminary in nature and includes inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that PEA results will be realized.
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P r o d u c t i o n S c h e d u l e o v e r v i e w
Year 1 Year 5Year 2 Year 6 Year 9Year 3 Year 7 Year 10Year 4 Year 8 Year 11
3.68 % Zn
2.27 % Zn
2.75 % Zn
2.83 % Zn
2.67 % Zn
2.76 % Zn
3.08 % Zn
2.78 % Zn
2.49 % Zn
3.08 % Zn
6.38 % Zn
$80.0
$M OPERATING CASH FLOW
$40.0
$70.0
$30.0
$60.0
$20.0
$50.0
$10.0
Opportunity to increase IRR and NPV with additional exploration that could allow for higher grade material after year one of the mine plan
OPERATING CASH FLOW AND ZINC GRADES14
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D i s t r i c t s c a l e l a n d p a c k a g e
N
3.5% Zn, 2.5% Pb and 1,500 g/t Ag
5.5% Cu and 3.4% Cu
9.1% Zn and 2.1% Pb
8.1% Zn and 10.9% Pb
5 km0
LEGEND CNX Claim
2018 IP Survey
Metal Occurrences
Provincial Highway 11
Major Transmission Line
Railway
Deep Water PortPower Station
Brunswick Smelter
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nash creek deposit correlation with 2011 ip survey
1 km
LEGEND Drill Holes
IP Chargeability (15-25 mv)
IP Resistivity (50-65 ohms)
Mineral Resources
Provincial Highway 11
Major Transmission Line
N
Nash Creek Deposit Correlation with 2011 IP Survey
25 km to Smelter, Deep Sea Port &
Railway
1.2 K
M T
O HW
Y
• The 2011 IP survey was integral to Callinex’s initial 2017 exploration campaign that led to a major expansion of the Nash Creek Deposit
• All drilled tested IP targets have intersected base metal mineralization or alteration related to the Nash Creek Deposit
• Only 2 km of the 20 km trend has been subject to any significant exploration, which led to the delineation of the Nash Creek Deposit
• The 2018 IP Survey will span a linear 16.5 km northwest-southeast trend with line widths up to 4.7 km
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nash creek preliminary results of 2018 ip survey
• Preliminary results have identified a target area that spans approximately 1,900m by 400m
• Two drill holes to test conductive targets intersected various amounts of sulphide mineralization with potential to host zinc and lead mineralization
• The target area will be drill tested in an upcoming drilling program
• The footprint of this target area compares favorably to the IP signature of the Nash Creek Deposit
1 km
LEGEND Drill Hole
IP Chargeability (7-25 mv)
IP Resistivity (50-65 ohms)
Mineral Resources
Provincial Highway 11
Major Transmission Line
N
Nash Creek Preliminary Results of 2018 IP Survey
1.2 K
M TO
HW
Y
25 km to Smelter, Deep Sea Port &
Railway
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2018 IP survey at nash creek project
LEGEND CNX Claim
2018 IP Survey
Mineral Occurrences
Provincial Highway 11
Major Transmission Line
Railway
N
5 km0
Deep Water Port
Power Station
Brunswick Smelter
3.5% Zn, 2.5% Pb and 1,500 g/t Ag
9.1% Zn and 2.1% Pb
8.1% Zn and 10.9% Pb
2018 IP Survey at Nash Creek Project
5.5% Cu and 3.4% Cu
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P o t e n t i a l t o E x p a n d
• The Nash Creek Deposit is open for expansion in several directions
• The Company’s initial drill program in 2017 led to an increase in indicated Zn Eq. pounds by 74% and Inferred Zn Eq, pounds increased by 385%*
• VMS deposits almost always occur in clusters; however, Nash Creek is the only known VMS deposit in the area
• Primary north-south corridor has several high-grade mineral occurrences up to 19% Pb+Zn at surface with very limited historic drilling
• Potential for new discoveries within a 150 km2 land package
*See News Release dated April 16, 2018
2018 MINERAL RESOURCE ESTIMATE
N
DRILLING BY YEAR
Pre-Callinex 2017 Callinex
500 METRES
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• Small, high-margin starter pit included within the 2018 PEA
• Near-surface Inferred resource of 3.2Mt grading 4.6% Zn Eq. containing 328 million pounds of Zn Eq.
• Located 15 km from the ‘supergiant’ Brunswick #12 Mine, recently one of the largest underground zinc mines in the world
• Project covers the Caribou and Brunswick horizons which hosts on average 15-20Mt geologic deposit
• Plans to follow up on a 2017 near-surface zinc discovery that is wide open for expansion
s u p e r j a c k p r o j e c t
Quebec
N
SUPERJACK
NASH CREEK
Caribou Mine
Brunswick Mine #12
Brunswick Mine #6
Heath Steele Mine
Bathurst
25 KM
N
20 km
LEGEND
Processing Facility Lead Smelter Power Station
Power Rail Station
Rail Deep Water Port
Mine Road City
HEADWAY
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N e w z i n c d i s c o v e r y
• A new high-grade, near-surface massive sulphide zone that is open for expansion
• Discovery was sandwiched between a formational conductor and subsequent borehole and large ground electromagnetic survey identified targets for follow-up drilling
3D View Looking Southwest of the Superjack A, B, C and D Zones
LEGEND
Drill Hole
Deposit
Geophysical Plate
2.7m of 6.2% Zn Eq.
1.9m of 8.0% Zn Eq.
2.9m of 5.6% Zn Eq.
‘D’ Zone ‘A’ Zone
‘C’ Zone
‘B’ Zone
BPEM plates associated with the ‘D’ Zone
BPEM plates associated with the ‘B’ Zone
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Headway Project
• The high-grade project is located adjacent to the world-class Brunswick No 12 Mine, where production totaled 137 million tons grading 8.74% Zn, 3.44% Pb, 0.37% Cu, and 102 g/t Ag from 1964-2013
• The project hosts the Headway and Pabineau deposits located along the prolific ‘Brunswick Horizon
• The Headway deposit is reported to be 950m long, 160m deep and up to 15m thick
• Callinex plans to complete a surface induced polarization survey and drilling in the future.
Deposit Callinex Mineral Claim Osisko Mineral Claim 3rd Party Mineral Claim
Road Power Rail
N
2 km
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Flin Flon Project
Flin Flon
Pine Bay Project
777 Mine Processing Facility
LEGEND Deposit
Historic Mine
Pine Bay Shaft
Callinex Claims
Callinex Mining Lease
HudBay Claims
Paved Road
Power
Rail
Flin Flon District Overview
kilometers
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• Explored by Placer Dome during the 1990s, where they had a mandate to discover a 30 Mt VMS deposit
• Covers one of the largest felsic rock packages within the belt, the primary host rock for VMS deposits
• Large alteration zone spanning 1,100m long and up to 700m wide has been overturned and is facing to the west, adjacent to three VMS horizons
• Three stacked horizons host five mineralized zones including the Pine Bay Copper deposit
PINE BAY project
POTENTIAL FOR A LARGE VMS DEPOSIT
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
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kilometers
KILOMETERS
0 2
N
Deposit
Historic Mine
Mine Shaft
Callinex Claims
Callinex Mining Lease
HudBay Claims
Alteration Zone
KILOMETERS
0 2
N
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
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Baker Patton Felsic Complex
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high-grade potential at pine bay
Hole From (m) To (m) Interval (m) Zn Eq (%) Zn (%) Au (g/t) Ag (g/t) Cu (%) Pb (%)284-3-93-DPN 998.80 1010.26 11.46 12.23 5.61 1.65 56.38 0.68 0.35Including 999.26 1009.59 10.33 13.06 6.00 1.78 60.39 0.71 0.35
Including 999.80 1004.00 4.20 20.77 11.82 2.43 73.77 0.70 0.73Including 999.80 1002.50 2.70 26.35 16.37 2.57 79.21 0.86 0.98
Cabin VMS Horizon Baker Patton VMS HorizonPine Bay VMS Horizon
New Discovery – 10.3m of 13.1 Zn Eq.
• Callinex discovered 10.3m of 13.1% Zn Eq. (6.0% Zn, 1.8 g/t Au, 60.4 g/t Ag, 0.7% Cu and 0.4% Pb) by extending a previous Placer Dome drill hole by 38m
• Hole intersected most significant gold and silver results from 625 holes drilled from over 80 years of exploration at the project
• Nature of mineralization suggests the VMS system is long-lived and the intersection occurs at the edge of the system
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• Plans to complete an IP survey over key stratigraphy at the Company’s Pine Bay Project located in the Flin Flon Mining District of Manitoba.
• The objective is to model lowly conductive pyrite that has the potential to host high-grade zinc, copper, gold and silver mineralization to a depth of 580m
• Previous exploration discovered multiple pyrite-rich massive sulphide intersections that are very poorly conductive and as a result traditional electromagnetics has been an ineffective vectoring tool in this geological environment
• Potential to follow up on new drill targets in 2019
2 0 1 9 I P S u r v e yat P i n e B ay
• Plans to complete an IP survey overkey stratigraphy at the Company’sPine Bay Project located in the FlinFlon Mining District of Manitoba.
• The goal of the survey is to modellowly conductive pyrite that has thepotential to host high-grade zinc,copper, gold and silver mineralizationto a depth of 580m
• Previous exploration discoveredmultiple pyrite-rich massive sulphideintersections that are very poorlyconductive and as a result traditionalelectromagnetics has been anineffective vectoring tool in thisgeological environment
• Potential to follow up on new drilltargets in 2019
2 0 1 9 IP S u r v e y a t P i n e B a y
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Inferred Mineral Resources*
Indicated Mineral Resources*
Project Cut-off (Zn Eq) Tonnes Zn Eq. (%) Zn (%) Pb (%) Ag (g/t) Au (g/t) Cu (%) Zn Eq.
(M Lbs)Nash Creek 1.5 13,592,000 3.21 2.68 0.58 17.8 n/a n/a 963Total 13,592,000 3.21 2.68 0.58 17.8 n/a n/a 963
Project Cut-off (Zn. Eq) Tonnes Zn Eq. Zn (%) Pb (%) Ag (g/t) Au (g/t) Cu (%) Zn Eq.
(M Lbs)
Point Leamington 4.0 14,093,000 6.15 1.88 0.02 17.1 1.1 0.42 1,910Superjack 1.5 3,211,015 4.63 3.01 0.78 29.5 n/a 0.27 328
Nash Creek 1.5 5,929,000 3.11 2.68 0.47 13.9 n/a n/a 407
Total 23,233,015 5.20 2.23 0.24 17.99 0.7 0.29 2,645
Total mineral resources
• Large inventory of zinc resources within established Canadian mining jurisdictions totaling 963 million pounds of Zn Eq. in the Indicated category and 2.7 billion pounds of Zn Eq. in the Inferred category.
Numbers may not add due to rounding. See News Releases dated November 9, 2016 and April 16 2018.
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I N V E S T M E N T S U M M A R Y
PROJECT PORTFOLIOSTRONG TEAM TIGHT CAPITAL STRUCTURE
2018 PEA outlines a strong economic return with a pre-tax IRR of a 34.1% and a pre-tax NPV8% of $230M
District-scale land package spanning 150 km2 with several untested high-grade occurences
Technical team involved in the discovery and development of several major base metal deposits in Canada
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T S X - V : C N X | O T C : C L L X F
604.605.0885 [email protected] www.callinex.ca
Corporate Head Office 1555 - 555 West Hastings Street Vancouver, BC Canada V6B 4N4
President and CEO: Max Porterfield
Corporate Counsel: Northwest Law Group
Auditors: PwC