Callinex Extends New Discovery with 180m Step-Out Drill Hole at Pine Bay

Highlights:

  • Drill hole PBM-024 intersected 2.6m of massive sulphides grading 3.0% Cu Eq. containing 1.64% Cu, 0.53% Zn, 0.92 g/t Au and 34.6 g/t Ag;
  • The new intersection is approximately 180m along strike and 70m below drill hole 284-3-93-DPN and suggests considerable room open for expansion towards surface, along strike and at depth; and
  • An upcoming summer drilling campaign will focus on delineating the grade and extent of the new discovery.

Vancouver, British ColumbiaMay 1, 2017Callinex Mines Inc. (the “Company” or “Callinex”) (TSX-V: CNX; OTCQX: CLLXF) is pleased to announce that drill hole PBM-024 intersected 2.6m of 3.0% Cu Eq. containing 1.64% Cu, 0.53% Zn, 0.92 g/t Au and 34.6 g/t Ag at the Company’s Pine Bay Project located near Flin Flon, Manitoba (See Table 1). This significant new Volcanogenic Massive Sulphide (“VMS”) intersection occurs approximately 180m along strike to the southwest of and 70m below the 10.3m thick intersection of 13.1% Zn Eq. cut by drill hole 284-3-93-DPN (See Figures 1, 2 and 3). The location of the PBM-024 intersection suggests that the massive sulphide zone, if proven to be continuous from the 10.3m intersection in 284-3-93-DPN, likely has a strike length comparable with many of the more significant past-producing VMS mines within the Flin Flon Mining District.

Interestingly, the copper-rich massive sulphide intersection in drill hole PBM-024 is virtually non-conductive and almost completely invisible to conventional Borehole Pulse ElectroMagnetic (“BPEM”) surveys. Given the widely-spaced drill holes, the prospects of expanding this zone towards surface and at depth is significantly enhanced based on the Company’s exploration model.

Max Porterfield, President and CEO, stated “We are encouraged by this most recent intersection in drill hole PBM-024 which indicates that mineralization associated with the 10.3m discovery grading 13.1% Zn Eq. is now open towards surface and at depth. With our first pass of follow up exploration now complete, upcoming work will increasingly focus on delineating the grade and size of this exciting new discovery.”

“The widely spaced exploration step-outs following the discovery of the high-grade VMS intersection in drill hole 284-3-93-DPN have provided us with a wealth of information that should now efficiently guide us towards the heart of the Pine Bay VMS system(s),” said Jim Pickell, Chief Geologist. “Geophysics has often proven to be a very effective exploration tool within the Flin Flon region as a whole. However, the technology has certain limitations when used to outline the extensions of relatively unmetamorphosed and non-conductive, pyrite-dominant, fine-grained, VMS deposits like we are exploring for in the Pine Bay area.”

An approximate 300m wide by 600m long sparsely tested, up-plunge, ‘exploration corridor’ exists above holes PBM-024 and 284-3-93-DPN (See Figure 2) and towards hole PBM-008. In addition, the PBM-024 mineralization is completely open at depth using the assumed steep southwestern plunge (See Figure 2). It appears that the ‘proximal’ copper-rich source portion of the VMS system occurs to the southwest while the ‘distal’ zinc-rich mineralization occurs to the northeast. It also seems very likely that there is excellent potential to discover additional ‘proximal’ and related ‘distal’ VMS-filled corridors along the Cabin, Pine Bay and Baker Patton VMS Horizons. The Pine Bay VMS Horizon is interpreted to be a fold-repeat of the Cabin VMS horizon.

The Company’s exploration strategy was to complete widely-spaced drill holes to maximize borehole geophysical coverage at the Pine Bay Project. Through this process, it was identified that multiple pyrite-rich massive sulphide intersections were either non-conductive or very poorly conductive, including the 10.3m massive sulphide intersection in drill hole 284-3-93-DPN. With this new information, Callinex drilled hole PBM-024, located approximately halfway between holes 95-02-DPN and PBM-017, to test the geological potential for significant massive sulphide mineralization unable to be readily identified by conventional geophysical techniques.

Callinex has also reinterpreted the high-grade, 2.3m thick zone of 9.1% Zn Eq. in drill hole PBM-014 (i.e., the “Cabin FW” zone shown in Figure 2) to be related to a similar new deep footwall interval of 0.2m containing 14.8% Zn Eq. in drill hole PBM-024 (See Table 1). Further drilling will be required to evaluate the potential for ‘stacked’ VMS deposits in immediate vicinity of these two holes.

Table 1: Partial Assay Results from Drill Hole PBM-024

From (m) To

(m)

Interval

 (m)

Cu Eq.

(%)

Zn Eq.

(%)

Cu

(%)

Zn

(%)

Au

(g/t)

Ag

(g/t)

1026.88 1027.04 0.16 N/A 14.82 2.00 5.66 2.09 58.80
1047.42 1050.00 2.58 2.95 N/A 1.64 0.53 0.92 34.60

Notes(1)(2)(3(4):

  1. Dip and azimuth for hole PBM-024 is -80⁰ and 315⁰ Az. The 1,182m deep diamond drill hole is located at the following Universal Transverse Mercator (UTM) coordinates using the North American Datum of 1983 (NAD83) within UTM Zone 14N: 332804m East and 6071457m North. The collar of the hole is 319m above sea level.
  2. Copper and zinc equivalent grades are based on the following metal prices: zinc US$5,525/t (1.15/lb), copper US$5,500/t (2.50/lb), gold US$1,300 per oz and silver US$18.0 per oz. Metal recoveries of 100% were applied in the metal equivalent calculations. The zinc equivalent calculation is as follows: ZnEq = 100 ((Au Price in (g) x Au Grade) + (Ag Price in (g) x Ag Grade) + (Cu Price*2204.6 x Cu Grade(%)/100) + (Zn Price*2204.6 x (Zn Grade(%)/100))/Zn Price*2204.6 while the copper equivalent calculation is as follows: CuEq = 100 ((Au Price in (g) x Au Grade) + (Ag Price in (g) x Ag Grade) + (Zn Price*2204.6 x Zn Grade(%)/100) + (Cu Price*2204.6 x (Cu Grade(%)/100))/Cu Price*2204.6
  3. The numbers may not add due to rounding.
  4. True widths are not currently known.

Figure 1: Plan Map of the Northern Pine Bay Area

Figure 2: Longitudinal Section of the Cabin VMS Horizon (3D Gemcom view showing 300 metre wide Exploration Corridor)

Figure 3: Cross Section of Cabin VMS Horizon (showing drill Hole PBM-024 within a 300m wide Exploration Corridor +/- viewing window)

QA/QC

Individual samples were labeled, placed in plastic sample bags, and sealed. Groups of samples were then placed in security sealed bags and shipped directly to SGS Canada Inc in Vancouver, B.C. for analysis. Samples were crushed to 75% passing 2mm and pulverized to 85% passing 75 microns in order produce a 250g split. All copper, zinc and silver assays were determined by Aqua Regia digestion with a combination of ICP-MS and ICP-AES finish, with overlimits (>100 ppm Ag, >10,000 ppm Zn, and >10,000 ppm Cu) completed by fire assay with gravimetric finish (Ag) or Aqua Regia digestion with ICP-AES finish (copper and zinc). All samples were analyzed for gold by Fire Assay of a 30 gram charge by AAS, or if over 10.0 g/t were re-assayed and completed with a gravimetric finish. QA/QC included the insertion and continual monitoring of numerous standards and blanks into the sample stream at a frequency of 1 per 10 samples, and the collection of duplicate samples at random intervals within each batch at a frequency of 1 per 10 samples.

SGS Canada Inc carried out some or all of following methods to obtain the assay results for Callinex: G_LOG02 Pre-preparation processing, G_WGH79 Weighing and reporting, G_PRP89 Weigh, dry, crush, split, pulverize, G_SCRQC QC for crush and pulverize stages, G_CRU22 Crush >3kg, G_DRY11 Dry samples, GE_FAA313 @Au, FAS, AAS, 30g-5ml (Final mode), GE-IC14A Aqua Regia digestion/ICP-AES finish, GE_IMS14B Aqua Regia digestion/ICP-MS package, GE_IMS14 Aqua Regia digestion, GO_FAG303 30g, Fire assay, gravimetric finish (Au)(Final Mode), GO_FAG313 30g, Fire assay, gravimetric finish (Ag)(Final Mode), G0_ICP13B Ore Grade, Aqua Regia digest/ICP-AES. Ag >10ppm was analyzed by ICP and GO_XRF77B-pyrosulfate fusion.

James Pickell, PGeo, a qualified person under National Instrument 43-101 and a consultant to Callinex, has reviewed and approved the technical information in this news release.

About Callinex Mines Inc.

Callinex Mines Inc. is focused on discovering and developing zinc and copper rich mines within prolific Canadian VMS mining jurisdictions. The Company is actively exploring its Pine Bay Project, located in the Flin Flon mining district of Manitoba, which hosts significant historic VMS deposits that are within close proximity to a processing facility. The larger project portfolio hosts three significant zinc rich mineral resources including the Point Leamington, Nash Creek and Superjack Projects located in Eastern Canada.

For additional information, please contact:

Callinex Mines Inc.

Max Porterfield, President and Chief Executive Officer

Phone: (604) 605-0885

E-mail: info@callinex.ca

Neither the 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 the proposed drill program and the timing and amount of expenditures. Except as required under applicable securities laws, Callinex does not assume the obligation to update any forward-looking statement.