VANCOUVER, Oct. 12 /PRNewswire/ - Field crews have completed the 2010 exploration program at Callinan Mines wholly owned Coles Creek property near Houston, BC. A total of 20 diamond drill holes were completed to test structures identified by geophysics and by previous drilling. Activity was centered on a newly discovered volcano-sedimentary structure exhibiting well mineralized intersections of sphalerite, galena, pyrite, native gold and silver, and a high incidence of tellurides. Core from the program is being split and logged on site and sent to Acme Labs of Vancouver, BC for assay. Previously reported diamond drill hole COLE 28 intersected a 21.25 meter section grading 3.368 g/mt gold, 15.33 g/mt silver, 2.04% zinc and 0.15% lead in the volcanoclastic sedimentary breccia material that hosts the relevant mineralization. Callinan's exploration team is optimistic as they await assays from the holes drilled to further test this well-mineralized structure. The structure has been intersected over a length of 900 meters in drill holes spaced up to 150 meters apart, at depths as shallow as 18 meters and, in some cases, as deep as 400 meters. Mineralization occurs consistently as finely disseminated sulphides in a sedimentary deposit of volcanic origin. The presence of consistent, finely disseminated mineralization, and the size of the intersections, is an encouraging event in the ongoing development of this resource.
Callinan expanded the Coles Creek property in 2010 by entering into an option to acquire the Troitsa Property adjacent to the western edge of the Coles Creek claim block. The Troitsa property consists of 17 mineral claims totaling 4746 hectares which covers the Troitsa Lake, Main, and Cirque showings. The centre of the property lies approximately 18km south-west of the Huckleberry Mine and 120 km south-east of the community of Terrace, BC. According reports filed with the BC department of mines, previous non NI 43-101 compliant exploration returned results on the Main showing of 1.02% Cu over a true width of 21.3m including 1.49% Cu over 12.2m. Sampling at the Cirque showing averaged 0.21% Cu over 42.7m including 0.33% Cu over 16.8m. None of these intervals were analyzed for gold. These results are historical in nature, dating from 1967 when the showings were first discovered. Molybdenum was noted in numerous showings on the property, including the Main showing, but was not reported in historical assays. Fieldwork in 2010 confirmed the existence of chalcopyrite and molybdenite on surface in a porphyritic host rock over a 100 meter strike length. Channel samples were taken and have been sent to Acme Analytical Laboratories for analysis.
The terms of the option agreement allow the company to purchase of a 100% interest in the Troitsa Extension by paying a total of $320,000 and issuing a total of 400,000 of its common shares to the optionors, and incurring work expenditures totaling $800,000 over a period of four years. Upon the Company exercising the option, it shall pay the optionors a 3% net smelter return royalty, 50% of which is purchasable by the Company for $2,000,000. Upon completion of a bankable feasibility study on the Troitsa Extension, the Company shall issue a further 200,000 of its shares to the optionors and pay an advance royalty of $50,000 per year, which is deductible from any royalty subsequently payable to the optionors. The agreement is subject to regulatory approval.
On Behalf of the Board of Directors,
All of Callinan's exploration programs are conducted under the direction of Pat Deveaux, P.Geo, a qualified person as defined by national instrument 43-101, who has reviewed and approved the contents of this release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the ability to complete contemplated private placements and the timing and amount of expenditures. The Company does not assume the obligation to update any forward-looking statement.
SOURCE Callinan Mines Ltd.