Hudson Bay to mine Callinan ground in ’89

It’s been a long wait for shareholders of Consolidated Callinan Flin Flon Mines, but the 1,200-acre zinc-copper property the company once held in northern Manitoba is now slated to go into production before the end of 1989.

The property is now held by Hudson Bay Mining & Smelting. Hudson Bay announced recently that it has formed a joint venture with Manitoba Mineral Resources, a provincial Crown corporation. The two say they plan to develop the property immediately.

Consolidated Callinan retains a 6.67% net profits interest in the property and, in addition, will receive a 25 cents -per-ton royalty on all ore produced. With peak production projected at 500,000 tons annually, the 25 cents royalty alone amounts to $125,000 a year.

Under the joint venture terms, Manitoba Minerals will earn a 49% interest in the property by funding $9.7 million in development costs. Hudson Bay will be operator and put up the balance of the $18 million development costs.

The property lies about 1,000 yards north of Hudson Bay’s North Main shaft at its Flin Flon mine, an underground copper-zinc producer. However, Hudson Bay President Lloyd Nilsen says ore from the Callinan property will be hoisted up the Flin Flon mine’s South Main shaft about 1-1.5 miles from the ore deposit.

Development will be from underground with access to the Callinan property gained from the 2,210 and 2,750 levels of the Flin Flon mine. Access has already been gained from the 1,690-level.

The Callinan property contains proven reserves totalling 2.6 million tons averaging 4% zinc, 1.5% copper with 0.055 oz gold and 0.66 oz silver per ton. Nilsen says the ore zones are open and, with precious metals contents playing an important part in the viability of the deposit, says the property is “good territory for gold exploration.”

In one of the first mentions of Consolidated Callinan’s Flin Flon property in The Northern Miner (N.M., Aug 17 /50), a 5,000-ft diamond drill program completed in 1948 was referred to as inconclusive regarding the base metals possibilities of the property, but said “some interesting gold values were obtained.”