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Callinex reveals 2018 drilling campaign results

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Global Mining Review,

Callinex Mines Inc. has announced the results from the 2018 drilling campaign at the company’s 100%-owned Nash Creek project located within the Bathurst Mining District of New Brunswick (Canada). The majority of drill holes were completed to test sparsely drilled areas periphery to the Nash Creek Deposit and two holes were drilled to test a preliminary induced polarisation (IP) target (the Central Zone target) to the east. Most of the holes drilled to the north targeted an untested portion of a 3 km long soil anomaly and did not encounter significant mineralisation. The two widely-spaced holes drilled into the Central Zone target intersected mineralisation ranging up to semi-massive sulfides with zinc and lead values.

Two widely-spaced drill holes, NC18-301 and NC18-302, tested part of the Central Zone target that was identified late in the 2018 field season. Results from these two drill holes has revealed lithologies, alteration, and mineralisation which replicates an environment similar to the Hickey Zone, located 1.2 km to the west. This Central Zone target was identified within a small area that was covered as part of a much larger 175 line km IP survey that was previously announced. The district-scale IP survey is still ongoing and anticipated to be completed in the first quarter of 2019.

A 2019 drilling campaign is anticipated to follow-up on targets generated from the IP survey including additional drilling on the Central Zone target that spans 1900 x 400 m and is located 1 km east of the Nash Creek Deposit. Nearly all volcanogenic massive sulfide deposits occur in clusters and the Nash Creek deposit is the only deposit along this 20 km trend. To date, very limited exploration has been completed within the Nash Creek land package that encompasses several high-grade mineral occurrences and has potential to host other deposits.

These results have confirmed that IP is the most effective method to directly target near-surface mineralisation at the Project. The ability of the IP survey to accurately vector towards increased sulfide mineralisation, which generally correlates with higher grade mineralisation at the Nash Creek Deposit, is very encouraging to apply on the 150 km2 district-scale land package.

Additionally, the drilling campaign identified mineralization west and east of the Hickey Zone with drill holes NC18-281 intersecting 3.0 m of 10.9% Zn, 1.2% Pb and 23.3 g/t Ag along with NC18-293 intersecting 9.0m of 2.3% Zn, 0.4% Pb and 5.9 g/t Ag. Mineralisation was also encountered to the northwest of the Hayes Zone. These results confirm the potential to expand the deposit further with step-out drilling in the future.

Drill hole NC17-289 completed 475m to the north of the Hickey Zone intersected 8.0m of 1.8% Zn, 0.3% Pb, and 3.4 g/t Ag. The depth of mineralisation intersected indicates that the stratigraphy plunges to the north and any future exploration in this area would be focused on targeting mineralisation that could be amenable to underground mining. Drilling completed along a 3 km long soil anomaly to the northwest did not encounter significant mineralisation, unlike it had previously along the southern 2 km where it was coincident with an IP response.

The company’s overall exploration activities since mid-2017 have yielded positive results that contributed to an increase in Indicated zinc equivalent pounds by 74%, to 963 million lb, and inferred zinc equivalent pounds have increased by 385%, to 407 million lb since the project was acquired in 2016.

The maiden 2018 PEA outlined a high margin, opencast mine plan that generates a pre-tax internal rate of return of 34.1% and net present value at an 8% discount rate of CAN$230 million based on a zinc price of US$1.25. The life of mine all-in sustaining costs (AISC) were estimated at approximately US$0.28/lb of zinc produced, net of by-product credits.

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