Chakana Copper (TSX-V: PERU) CEO David Kelley on Highest Grade Gold-Copper-Silver Intercept To-Date at Huancarama Target

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Chakana Copper — Mr. David Kelley. Dave, how are you this morning?

David Kelley: I'm doing great, Gerardo. How are you doing?

Gerardo Del Real: I am well. Thank you for asking. I joked off air that every time I speak with you, I congratulate you on the numbers — today being no exception! You just announced the highest grade interval to-date at Huancarama, Soledad Project, in Peru.

Now, let me go over some of the numbers. The headline reads:

11 meters of 2.79 grams per tonne (g/t) gold, 4.04% copper, and 330.8 g/t silver, or 13.3 g/t gold equivalent.

Absolutely fantastic numbers! And it should be noted that that 11 meter interval was within a longer run of mineralization that we can chat about. But I'd love for you to provide some context on the results. It seems like you're really figuring out the controls of this thing.

David Kelley: Yeah, that's right, Gerardo. And we've seen that in the past with our drilling. When we drill, when we discover a new mineralized breccia pipe — oftentimes, the grades get better with time. 

And that's a function of us figuring out the controls on the mineralization; finding these sweet spots in the grade profile where we know the high grades are a function of fluid pathways. It's fluids moving in through the breccia, and once we get onto those, then we can follow those out. 

And I know I've mentioned that to you many, many times. But this is just another great example of that. We first figured out the geometry of the breccia; we did hit some nice high-grade intervals in previous releases. And now we're coming in from different angles and different depths. And we're testing those zones where those high grades are — and it's getting better.

And so this is a great example of that. And that 11 meter interval is really spectacular. But it's also really impressive to me that it sits within 93 meters of 1.63 grams gold, 0.95% copper, and 129 grams silver.

Everyone was really excited about silver last week, and this is a great time to remind everybody that we've got silver too! We've got high-grade copper, and we've got some really nice gold grades in there too. So the story is really… it's just getting better with time, Gerardo.

Gerardo Del Real: You were very straightforward early on setting the expectation for Huancarama, that, yes, you expected very good grades. But you also were cautious in advising that it may take a little bit to actually figure out the dimensions and the geometry and where to chase that high grade. It doesn't seem like it took very long.

David Kelley: Well, this one's worked out really well. And we love it when that happens. You put a few drill holes in and it really hangs together nicely.

And these two drill holes were drilled from the same platform as the last two previous drill holes in the previous release but at significant different azimuths. So we stepped out quite a bit. And it's just going across that main breccia. And again, real nice long runs of mineralization. Higher grades in some parts of the breccia; lower grades in other parts. And we're still trying to figure that stuff out.

We think that the grade is getting better at-depth; that’s the deeper holes seem to be the ones that are yielding the greatest grades. And so that's a good sign too because we've always talked about, too, that we often see the breccias getting bigger at-depth. 

And we haven't quite gotten to the depth of drilling density yet to be able to tell us that – about the size getting bigger – but we're certainly going to be testing that with additional drilling.

Gerardo Del Real: Drilling continues at Huancarama… is that correct?

David Kelley: That's right. Yeah, I think we said in the release, 22 drill holes have now been completed. We've got some drilling happening on the west side of the complex now;  trying to see what's out on the west side.

Most of the drilling, initially, had been focused – and we still have more results to come out on the east side – but we've got the rig turning out there and exploring the western extent and the breccias that are out there and trying to put that together too.

And that's, again, we're going back; first initial scout holes and then following up those with some more targeted drill holes to get the geometry down. And then we'll have to wait and see what the grades look like. And it's just kind of building the story all again.

And we've always hoped that the western half hooks up to the eastern half. And there's certainly the potential for that. We need a lot more drilling to be able to tell that. But that's in the plan for this year. I think we've talked that we've got a 26,000 meter drill program planned for 2021. And that's a really aggressive program for us.

Gerardo Del Real: You mentioned the potential for the two portions of the property, right, to connect at-depth. Just for perspective and context for everyone out there, can you describe the distance if that proves to be true?

David Kelley: Well, that's a good point because I should have made that point stronger in the last news release. But I did make it in this one in that we've always talked about the potential for breccia pipes to coalesce at depth creating a much larger breccia body.

And at Huancarama on the eastern side, we've got the H1 Breccia, which is a very large breccia pipe sticking out of the ground. And then, it's about a hundred meters, I'm going to say, maybe 125 meters… yeah, it's probably around 100 meters up to the northwest is the smaller H2 Breccia.

And in between those two breccia pipes that are exposed at-surface, it's not breccia; it's the volcanic host rock. So we know that, at-surface, those are two distinct, separate breccia pipes.

But then, as we started drilling beneath that volcanic rock that separates the two, we went into breccia. And now we've drilled that zone from multiple different platforms. And we know that those two breccia pipes have come together and it's one much larger breccia body.

So something that we've been talking about for a long time about building much greater volume and tonnes at depth through the coalescence of breccia pipes; we've now confirmed that that's what's happening there on the east side. And then, obviously, we're going to be looking to see if we can define that on the western side.

Gerardo Del Real: Well, Gold Fields has to be happy. I know that you had announced late last month, a C$10 million private placement. Gold Fields decided to follow it's participation right. How are things coming along on that front?

David Kelley: It's going really well. We'll have some news out soon on that. Gold Fields is not only participating but they've elected to go from 16.8% to 19.99%. So that's a great endorsement right there.

They like the project enough that not only are they going to maintain their position but they're going to increase it. So that was great to have that as essentially a lead order. We've had a lot of excitement about the financing, and we'll have some news on that coming out soon. But it's going really well. And we'll certainly be able to fund this really aggressive 26,000 meter program that I just mentioned.

Gerardo Del Real: Dave, great work to you and the team. I am looking forward to future results. Before I let you go, I have to ask, how are things going as it relates to COVID? I know that there was an announcement recently about new lockdowns. And I know that mining and exploration is an essential industry. But how are things coming along on that front?

David Kelley: Yeah, we're still moving forward with the program as planned. We have some additional protocols to follow with regard to transportation of personnel and getting contractors and resupply and stuff into the project. But everything's going smoothly. The drilling has continued uninterrupted.

And we're reaching out. We have gone back to revisit what we can do for the local communities. And we're purchasing additional supplies. And we'll be making additional donations just to try to help them through this lockdown as well.

Because while we can continue to do our work, they're pretty much having to stay in their homes and not travel. So we're going to help them as much as we can and try to get through this. We're all anxious to find out what the program is going to be for vaccinations in Peru once they can get access to the vaccinations. And, obviously, that's going to be really important for them to get through this.

Gerardo Del Real: Excellent! Dave, thank you so much. We'll chat soon.

David Kelley: Sounds good, Gerardo. Thank you very much.