Chakana Copper (TSX-V: PERU) CEO David Kelley on New High-Grade Copper-Gold-Silver Intercepts from 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 today?

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

Gerardo Del Real: I am fantastic! I'm glad to have you back on. Great set of results! You’ve announced results from Huancarama. Let me read the headline:

Chakana Copper intersects 120.4 meters of 0.51 grams per tonne (g/t) gold; 0.83% copper; and 34.6 g/t silver from 101.3 meters. 

I should note… that is either 1.46% copper equivalent or 2.23 grams per tonne gold equivalent. Fantastic, fantastic results! And excellent copper, gold and silver mineralization. I'll let you provide some context as to the geometry of this breccia pipe because it's shaping up to be pretty, pretty good.

David Kelley: Yeah, I guess the important thing here, Gerardo, is the fact that these two holes were drilled from a new platform on the south side… so drilling to the northeast across the breccia that had been defined by the first 8 drill holes and then the control that we have from that underground adit or tunnel. 

And the holes in this release confirm that geometry. So we've got a footprint of the breccia that's about 100 by 50 [meters] in a horizontal dimension. And then, these drill holes extend the breccia from surface down to a depth of about 225 meters below surface. So the geometry is shaping up real nicely. 

It's still open in many directions, of course, but also we're seeing some very nice grades across this middle zone and in and around this collapse zone and some nice really high-grade zones within the release today, too.

Gerardo Del Real: The breccia now has extended to a vertical depth of approximately 225 meters below surface. Is that correct?

David Kelley: Yeah, that's correct. If you look at the distance from surface where the breccia crops out to where the breccia intercept ended in these last holes… it's approximately 225 meters from surface down to that depth and still open beneath that.

Gerardo Del Real: Excellent! I couldn't help but notice you just topped off the treasury; $10 million private placement; that's Canadian. And I also couldn't help but notice that Gold Fields has decided to maintain its participation right.

David Kelley: Yeah, not only that... I mean, they're maintaining the right to stay in at 16.8% but they're taking the opportunity to go up to 19.99%. And if you look at the dollar amount in a C$10 million raise, essentially it's a lead order of about C$3.48 million. And if we up-size it to C$12 million, it would be about a C$3.88 million lead order from Gold Fields.

So it's great validation for them. As we've discussed many times before, Gerardo, they're very excited about the project and the potential — and especially the results as of late. You know, coming out in August and starting drilling into the Paloma area and announcing two discoveries there and then moving down to Huancarama and another discovery there… so they're really excited about the results.

Gerardo Del Real: More results to come. I believe you've drilled 18 holes, thus far, at Huancarama?

David Kelley: Yeah, it's moving rapidly. We did take a break at the end of the year just to give the guys a much needed break in the drilling. But they're back at it now and drilling away. And we have a steady stream of results to come. The lab has been doing a great job. They're still hanging in there with about a two-week turnaround time so we couldn't be happier about that.

And we'll just keep drilling and see what we learn. Each drill hole seems to tell us more about the breccia body and its potential. So we're excited to put more results out as soon as we can.

Gerardo Del Real: Walk me through where the metallurgical work is at this point. Obviously, the drill bit is finding a lot of success. Obviously, Gold Fields is happy to not only maintain its interest but increase it. 

That bodes well for future scenarios, obviously, when we talk development and mining and a whole lot of things that we can't get into right now without looking too far ahead.

David Kelley: Right.

Gerardo Del Real: But as far as the met work, how is that coming along?

David Kelley: It's coming along well. We did get delayed with COVID-19 just with availability of personnel. And that laboratory did shut down for quite a while. But we've restarted the program. This week, we'll be delivering a batch of samples. We're focusing on Breccia No. 5. 

Breccia No. 5, as you know, is kind of centrally located in the project. It's a very nice large breccia. And it's not the highest grade breccia but it's what we kind of looked at from the standpoint of a starter project, like… that would be a great breccia pipe to do more advanced studies on, look at the mineability of it, look at getting underground access — and that type of thing.

So we're starting there. And certainly what we learn from Breccia No. 5 we’ll expand to the other breccia pipes and other studies. But we're back on-track now, and I expect to make some significant progress in 2021 on the metallurgy.

Gerardo Del Real: How is the resource work coming along? Obviously, we're all anticipating that later this year.

David Kelley: Yeah. With this financing, it's going to allow us to ramp up the program considerably. We're planning three rigs on the project… we'll add a second rig in February… then, we'll add a third rig in April… and we'll run with those three rigs. 

Two rigs will be doing resource infill drilling at Huancarama and the Paloma area and also getting a rig back to Breccia No. 7. So the plan is to add those four new discoveries to the existing pipes that we've already drilled out and put out the resource after that.

And the best way to do that and try to stay on track with a timeline for 2021 is to add more drill rigs to it. And, hence, we needed to top up the treasury. So that's how that all came together. It's important to note, too, that the drill plan or program for 2021 is 26,000 meters; 16,000 meters would be for the infill drilling on those four pipes I just mentioned. And then, an extra 10,000 would be for testing new targets or things that we haven't tested… either peripheral to the discoveries we've made or entirely new targets. 

And that's a really important part of the program, too, because we've always said that we know we can expand the resources by going underground and drilling out the depth extent of the pipes we've already found. But the other way to grow the resource in the future will be to discover new pipes. 

And our hit-rate is really high right now! So if we can maintain that and find another 5 or 6 or 7 breccia pipes in the next 10,000 meters of exploration drilling with this additional funding — then the project is going to scale up nicely.

Gerardo Del Real: Dave, excellent work! Fingers crossed for continued success… but it's been a fun ride thus far. Anything else that you'd like to add?

David Kelley: No. I just can't wait to get back on and talk to you about the next set of results, Gerado. As always, we appreciate your support. Thank you!

Gerardo Del Real: Looking forward to it! Thank you so much for your time.

David Kelley: Have a great day.

Gerardo Del Real: Alright, you as well. Bye now.