Mining Explorers 2016: Constantine Metal Resources Ltd.

Over the past four years, Constantine Metal Resources Ltd. has been able to carry out roughly US$20 million of exploration at its Palmer copper- and zinc-rich volcanogenic massive sulfide project in Southeast Alaska.

This steady exploration through the recent downturn in mining markets was made possible by a timely partnership with Dowa Metals & Mining Co. Ltd. At the onset of 2013, Dowa and Constantine inked a deal that provides the Tokyo-based smelting and mining company with the opportunity to earn a 49 percent stake in the Palmer project by investing US$22 million over a four-year span.

In addition to funding exploration, these expenditures include US$1.25 million in payments to Constantine over the earn-in period. This, along with any other option payments and management fees received, allowed the junior to avoid raising money during the bear market, while advancing its flagship asset.

Most of the work over the previous three years has focused on expanding the existing resource at Glacier Creek, a region of the Palmer project that consists of five inter-related subzones of massive sulfide mineralization.

In 2015, Constantine published an inferred resource of 8.125 million metric tons averaging 1.41 percent (252.6 million pounds) copper, 5.25 percent (940.4 million lbs.) zinc, 0.32 grams per metric ton (83,600 ounces) gold and 31.7 g/t (8.3 million oz.) silver for the RW and South Wall zones.

The 2016 program, however, investigated exploration targets beyond the deposit but within 3,000 meters of the resource. This includes drilling at HG, an untested zone of intense VMS alteration exposed in a drainage situated roughly 1,000 meters east of the deposit; Cap, a silver-rich massive barite sulfide target where past drilling has intersected 134 g/t silver over 23.2 meters and 31 g/t silver over 90.6 meters; and a strong conductor anomaly located 1,000 meters north of the resource where mineralized boulders grading up to 16.1 percent zinc and 13.2 g/t silver have been identified.

Constantine President and CEO Garfield MacVeigh said, "The new exploration drilling will occur in parallel with important advanced exploration work that is focused on evaluating the high-grade RW and South Wall resources that are open to expansion in multiple directions."

This work includes environmental, hydrogeology and engineering studies required to advance the Palmer to the next stage.

In August, the company received permits needed to build 2.5 miles of road that will provide access to up to 40 new drill sites in the lower part of the resource area as well as staging areas for helicopter and ground-supported exploration activities at the copper- and zinc-rich polymetallic deposit. Construction began this fall and is expected to be completed early in the 2017 field season.

Going into 2016, Dowa had invested roughly US$16.2 million in exploration at Palmer and intends to earn its 49 percent stake in the property by the end of 2016. Any unspent funds at year's end will be deposited in an account to cover initial joint venture cash calls.

Following formation of the JV and use of the carry-over funds, Constantine and Dowa will fund the project in proportion to their ownership interest.

-SHANE LASLEY