Categories: Base Metals
Topics: General Base Metals

Chakana Copper (TSX-V: PERU) CEO David Kelley on Latest High-Grade Copper-Gold-Silver Intercepts from Flagship Soledad Project

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, Happy New Year! How are you, sir?

David Kelley: I'm doing great, Gerardo! Happy New Year to you as well and thanks for having me back on your show.

Gerardo Del Real: Thanks for coming on. We've been excited about assays from Huancarama at the Soledad Project in Peru. Let me read the headline from today's results and news release. The headline reads:

Chakana Copper intersects 126.2 meters of 0.31 grams per tonne gold; 0.53% copper; and 34.6 grams per tonne silver (or 1.03% copper equivalent or 1.57 grams per tonne gold equivalent) from 92.8 meters at Huancarama. 

Obviously, these are the first 8 holes of what many have long thought to be the most prospective target, or targets, on the property. I would love for your take on today's results.

David Kelley: Yeah, Gerardo… I mean, it's really, really important for the project. This is the third discovery in a row that we've announced since starting the drill program up again in August with this new area that we could drill in. It's the seventh strongly mineralized breccia pipe we've drilled on the property since that date. So the numbers are starting to be really important. 

The number of breccia pipes that we have – the grades, obviously, are important – and I'm very, very satisfied with the grade set. Within that headline intercept, there's also 34 meters that run about 1.4% copper and 0.6 grams gold and I think up around 70 grams silver. So there's some nice high-grade in there too.

And as we've talked before, it's always good to see that high-grade because we know we can chase that. It means that there's high-grade in the system and we can chase that out.

But the really impressive thing – and I've always said that Huancarama potentially could be a company maker in and of itself – is just the scale of the system. With just 8 holes and mapping the geology of the underground workings there, we've been able to put together a footprint of the breccia, so far, that's about 100 meters by 50 meters. And that's big!

That's one of the biggest breccias we've ever seen on the property. And we haven't even touched the western half of the breccia complex yet. So it's very, very encouraging to have these kinds of results early on — and I couldn't be more excited about the potential for the project.

Gerardo Del Real: You mentioned that the near-surface mineralization encountered may have bulk mineable potential. That's important moving forward, right?

David Kelley: It really is. And we talked about this at Paloma too because we have a similar situation at Paloma. Paloma is only 300 meters away. The breccias that were drilled at Paloma extend down-hole 650 meters, which is 400 meters below the top of Huancarama. 

So we look like we've got a lot of scale working in our favor here. But yeah, to see long runs of surface mineralization like that in a footprint like we're talking about – both at Paloma and at Huancarama – you have to start entertaining these ideas about potential mining methods. 

And bulk mineable deposits are, as we know, can bring some great optionality to a project that already has really nice underground mining potential with the kind of grades and geometries we're talking about. But this just adds another nice option to the project.

Gerardo Del Real: Excellent! You mentioned in the release that the entire western half of the breccia complex is currently untested. Again, these 8 holes… very, very good runs of mineralization. You touched on the bulk mineable potential and you still have the entire western half of this complex untested. Got to be excited about that!

David Kelley: Yeah. We have a lot more work to do there. We just finished Hole No. 15 at Huancarama and it's still on the eastern side. The really critical breakthrough for us was drilling holes No. 159 and No. 160 and the release that connects H2 to H1. It drilled continuous breccia all the way across. 

The best grade in Hole No. 160 went right beneath that collapse zone. So we know that that collapse zone is a really important feature. We're not sure of the origin of that or how it came to be. But we do know it's associated with really strong mineralization.

We've been drilling in and around the eastern side of Huancarama, and we will be moving to the western side soon. But we've accomplished our goal in the scout drilling program, which is confirming mineralization, seeing high-grade, and getting some sense of the geometry. 

So it's going to be set up for infill drilling. After we pull off of the eastern side, we'll move over to the western side — and hopefully we'll have similar success like we've had on the eastern side.

Gerardo Del Real: Excellent! Walk me through the next few months, Dave. Obviously, copper is looking very, very strong. It's right at that $3.65 [per pound] level as we speak. Gold, despite the pullback, is sitting at 1,841 [per ounce]. And silver, considering the pullback as well, is still above $25 [per ounce]. 

So, obviously, having a system that is generous in copper, in gold, in silver… how do you prioritize that moving forward? And then, of course, we have the resource estimate to get to that everyone is looking forward to.

David Kelley: Yeah. The metal prices are good. They're very strong right now for us. I mean, we look at metal prices with a more long-term perspective, I guess, and having a high-grade system really helps you out through the metal cycles. 

I love the prices that we're at now and everything seems to indicate that they're going to go higher. But even at the current prices, they're really outstanding when you’ve got grade on your side.

The plan for 2021 will be a lot more drilling. Obviously, we've got the infill on the new discoveries we've made at Paloma East, Paloma West, Huancarama — now we've added that to that list. We still have Breccia #7 that needs to be drilled out. 

So there's going to be a lot of drilling this year on the project. And then it will culminate in the first maiden resource estimate for the project. And that will just be kind of a postage stamp estimate — if you will. 

It'll just be… Here's where we're at now, and here's where we're going to get to with additional exploration.

That exploration could be the down-depth or down-dip extension of the known breccia pipes that we've already drilled – the seven that we're talking about – or it can be going out testing new targets… and likely will include both. If we can find another 5 or 6 or 7 mineralized breccia pipes starting at-surface like we've got already in the inventory, then the project is going to start scaling up really nicely.

Gerardo Del Real: Zero shortage of options, Dave. Good problems to have, huh?!

David Kelley: Absolutely, Gerardo! No, it's going to be a good year for us. I think we're really excited about the Huancarama results. They really are important on the scale of what it means to the project. We're going to keep working it hard and look forward to giving you more results and updates in the future.

Gerardo Del Real: Thanks so much for your time, Dave. Appreciate it and looking forward to the updates.

David Kelley: Thanks, Gerardo! Have a great day.

Gerardo Del Real: You as well.