Callinan Mines has begun an extensive exploration program in the Snow Lake area of Manitoba. As part of the program, the company will conduct geophysics, surface sampling and drilling on its Berry Creek property, and the recently optioned Jean Lake and Watts River properties.
Under an option agreement, Callinan has the right to earn a 100% interest in the Watts River and Jean Lake properties in the Snow Lake Area of Manitoba.
The Jean Lake Property, 384 hectares in size, is underlain by a coarse grained intrusive of intermediate composition dominating the geology of the area. Sampling of seven trenches scattered throughout the property have uncovered mineralization consisting of a medium grained arsenopyrite occurring as disseminations, fracture fillings and stringers. Work conducted by the Manitoba Department of Mining and Minerals returned values ranging from a low of 0.17 grams per ton gold, to a high of 11.44 grams per ton gold from trenching conducted in seven separate locations on the Jean Lake Property.
The Watts River prospect was sampled by the Manitoba Department of Natural Resources in 1988. Nineteen samples assayed from 4ppb to 10,200 ppb gold. Values of 0.04% Molybdenum and 6.9 grams per ton of Rhenium were obtained with occasional anomalous values in gold and copper. In the summer of 2000 the property was re-sampled by the department. Twentythree samples returned gold assays from trace amounts to 101.2 grams per ton.
The exploration program has begun at Jean Lake and Watts River, and currently consists of induced polarization, magnetometer and very low frequency (VLF) geophysical surveys. The program will continue with diamond drilling as warranted.
Meanwhile, re-examinations of a hole drilled on Callinan’s Berry Creek property, also located in the Snow Lake area, revealed anomalous values of copper, molybdenum and rhenium. The core length consisted of 50 meters of altered rhyolite, sericite, and fuchsite fragmentals. The company plans to test this strata with a deeper hole as part of the ongoing Snow Lake Program. Berry Creek is the location of a gold bearing structure intersected by Callinan Mines in a 2008 exploration program (as reported in company news announcement June 15, 2009).
The agreement to option the Jean Lake and Watts River properties gives Callinan the option to earn a 100% interest on both properties by paying an aggregate total of $100,000 in cash and issuing 100,000 of its common shares over a three year period. The optionor of the property will retain a royalty equal to 2% of the Net Smelter Returns from operations on the property, 50% of which may be purchased by the Company for a total payment of $1,000,000.
In corporate news, Callinan proposes, subject to the approval of the TSX Venture Exchange and disinterested shareholders, to re-price outstanding stock options exercisable to purchase 661,000 shares of Callinan, of which options exercisable to purchase 466,000 shares are held by insiders. The options were granted on May 30, 2008 for a five year term at an exercise price of $2.94 per share. The proposed new exercise price is $1.00 per share, with all other terms remaining the same. Shareholder approval will be sought at Callinan’s upcoming annual general meeting to be held on December 11, 2009.
Source: News Wire.CA