Monday brought news that Callinex Mines (CNX:CA) had completed a secondary offering, raising some $3 million. The Canadian mining company completed its non-brokered private placement with the majority of the 10 million new shares getting issued to Resource Capital Funds, a private equity fund with a focus on mining interests.
Some $2 million of that new capital is getting turned right around for investment into a new drilling program in Flin Flon, Manitoba. The Flin Flon Mining District has been actively mined for decades and is home to a Precambrian greenstone belt that’s 250 km long and 75 km wide. Callinex acquired their property there through an option agreement in 2011, landing a 100% interest.
The Callinex Flin Flon property has a lot of potential, making the completion of capital raising for exploration there an event of note. The property has two areas with high potential for volcanogenic massive sulfide (VMS) deposits. These are formed by volcanic-associated hydrothermal events and frequently create large, multi-metallic ore deposits. Callinex’s Flin Flon property is in close proximity to eight former producing VMS deposits, making it one with a lot of potential.
The completion of the offering comes as the company has already kicked off its Phase II drilling program at Flin Flon, receiving permits for seven drill holes at 2,500 meters in depth with the objective of discovering VMS mineralization rich in gold, silver, copper, and zinc. The company also announced the addition of two leading VMS experts to its leadership team in late June.
The recent financing deal consists of 5 million “flow-through” shares and 5 million “non-flow through” shares. The non-flow through shares consist of a non-flow through share in addition to half of a share purchase warrant. Both flow-through and non-flow through shares were offered for $0.30 apiece. The attraction of a private equity firm like Resource Capital Funds is likely a plus for Callinex given the firm’s extensive knowledge and experience with mining interests.
“We are excited to welcome the leading mining-focused private equity firm as a major shareholder of Callinex,” said Callinex President and CEO Max Porterfield in a news release. “Resource Capital Funds, which manages over US $2.5 billion in assets, is a patient long-term investor that actively partners with companies to build strong, successful and sustainable businesses. We believe RCF’s strategic investment in Callinex provides a major competitive advantage that will be instrumental for increasing shareholder value.”
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