Chakana Copper (TSX-V: PERU)(OTC: CHKKF) CEO David Kelley on Hitting Massive Sulfide Including 27.39% Copper & 967.7 g/t Silver at Flagship Soledad Project, Peru

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, it's been a bit. How are you?

David Kelley: I'm doing great, Gerardo. It's good to talk to you again. How are you doing?

Gerardo Del Real: I am well. Thank you for asking. You had some news this morning that's going to catch a lot of market attention. Let me start by highlighting some of the better intercepts in this release:

  • 41 meters of 2.83% copper equivalent
  • 48.5 meters of 1.89% copper equivalent
  • 53 meters of 4.64% copper equivalent

But the headline number is absolutely phenomenal:

  • 12 meters of 27.39% copper and 967.7 grams per tonne silver

That's the best hit ever, I believe, at the property. I would love to get some details and some context from you, Dave. Congrats!

David Kelley: Yeah, thank you, Gerardo. It's really a spectacular intercept! And I mean, even if we had the release without that intercept, all of the other intercepts you've mentioned are very impressive as well and kind of in-line with what we've been doing. 

But this 12 meters of massive sulfide is just spectacular. And there's a photograph in there showing the interval — and it's just pure sulfide. And it was estimated to be 90% chalcopyrite, which they were pretty much spot-on with their estimate. If you look at the copper equivalent — it's 35.9% copper equivalent. I believe it was right over 30%-35%, which is basically — it's a 12 meter intercept of pure chalcopyrite is how it breaks down. And that's just stunning.

If you were exploring for massive sulfide deposits — and you had an intercept like this — you'd just be over-the-moon, right; it would just be a spectacular interval. That's what they're targeting. And we're drilling breccia pipes. I mean, this interval is part of a 163-meter continuous mineralized interval that's open at-depth within the breccia pipe. 

And we've found this sweet-spot on the south margin of the north pipe. And remember, the north pipe is the blind pipe; it's the one that didn't even come to surface. So just finding a blind pipe was a big deal. And then, finding this high-grade within it is even better. And we've got, I think, three holes in this zone now. It was sparsely drilled; the north pipe was sparsely drilled. And that's one of the reasons we went back to Breccia No. 1 — to drill some additional holes in there for the resource estimate. And this is work done by our resource geologist that's advising us and picking these holes and stuff. And just a spectacular result. 

I think you and I have talked before about how really good projects continue to get better with the more work that you do on them… and this is just another example of that. Even after 55,000 meters of drilling, we drill a hole like this and get the best intercept — the highest grade intercept ever in the history of the project — after 55,000 meters of drilling. And that's pretty incredible.

Gerardo Del Real: The silver grades were pretty incredible as well.

David Kelley: Yeah. And you know, Breccia No. 1 has been known for very, very high gold grades. I think we've hit 42 grams of gold in our drilling before. There was a 365 historic rock chip sample at-surface; 365 grams of gold. And it's very gold-rich in the top. But as we go deeper — and we've talked about the zonation in the breccia pipes — as we go deeper, we tend to see it goes more dominantly copper… still with very high silver… but the gold will drop off. 

And then, as we go deeper and deeper in these breccia pipes… and remember, we've never seen the bottom of a breccia pipe yet even though we've got breccia drilled down to 824 meters in breccia pipe to deep zone in Breccia Pipe No. 6. 

But the general trend is getting more copper-dominant because we're going towards the heat source. It's getting deeper, hotter, closer to the heat engine. And we expected that copper is going to be the dominant metal at-depth. But higher up in the pipes, we'll see gold and gold-silver-copper, copper-silver… and then, probably, ultimately, mostly copper.

Gerardo Del Real: Is this the best hole of your career?

David Kelley: It absolutely is! And I don't have a table of the intercepts… but yeah, no question about it… it's definitely the most spectacular intercept. I would probably say that most of the best drill hole intercepts on this project have been the highlight of my career. But 12 meters of 35% copper equivalent; no question… it's the best!

Gerardo Del Real: As I mentioned in the beginning, this is going to catch the attention of a lot of people that may be newer to the Chakana story. You've now drilled 55,000 meters. There is a resource estimate that's upcoming here in Q4. 

Can you kind of walk us through just a brief overview of the company and the project and what people that are new to the story can expect the rest of the year, right? You've only tested 15 out of 100 targets, thus far, which is spectacular in itself.

David Kelley: Yeah, that's right. I mean, a few things of note: This is our sole asset. This is our only project. And that was by design. Our goal was not to be a project generator and try to get other people to spend money on our project. It was to put all of our expertise into identifying what we felt would be the best project that could be taken through discovery, drill out, and into a resource, and, ultimately, divest the asset of the company to a developer to come in and build a mine. And that's been our strategy — and it's worked out really well for us.

The other important thing to note is that the deposit type are tourmaline breccia pipes. And these are much less well-known deposit types in the industry. There's some phenomenal examples of tourmaline breccia pipes in districts in the world. 

The biggest and most spectacular ones are in Chile. Los Sulfatos; it's over a billion tonne tourmaline breccia pipe [project] with about 1.5% copper. It doesn't have the gold and silver like we see at Soledad. There are examples in Arizona with over 400 breccia pipes in a single mineral system. We don't know how many we have, ultimately, because we're finding blind breccia bodies that haven't been exposed by erosion. But my guess would be we probably have somewhere between 50 and 100. There's 23 that are cropping out at-surface.

And what you've alluded to is the number of targets that we have. And our targets are generated by surface mapping, soil geochemistry, rock geochemistry, multiple different types of geophysical surveys, structural studies — that type of thing. And we have over 110 current targets that define the mineral system. 

And of those, we've only tested 15. And from those, we've got these six very strongly mineralized breccia pipes that will be featured in the initial resource. And that resource is just going to be based on… it'll either be six or seven pipes down to about 300 meters depth. They're all open at-depth.

So the resource is going to have a long way to go. I like to use a multiple of four when I think about what the resource number is going to be when it comes out because we know we can expand the resource by underground drilling — extending it from 300 meters, say, down to 600. And we can expand it by finding more mineralized breccia pipes out of these 110 targets that we have.

So to me, the initial resource is just going to be an indication of what the potential economic value could be of these tourmaline breccia pipes. But in terms of the upside potential, right now — the sky's the limit!

Gerardo Del Real: Dave, congrats again! I know assays are still pending for several holes. I'm looking forward to seeing the numbers there. Anything else to add?

David Kelley: Well, keep an eye on us. We do have a lot of drill results to come out. The labs have been backed up with COVID issues and they're overwhelmed right now. But they are doing their best to get results out. So we have lots of drill results to come out. 

We've also just started a new state-of-the-art geophysical survey. It's gradient array IP coupled with what we're calling offset IP. It's kind of a two-and-a-half DIP type of setup. And what I've seen so far is really, really spectacular. 

We've really been able to dial in the geophysics and get it really customized to identify these breccia pipe mineral systems — and it's working really, really well. So I know that we're going to come up with new targets to add to what we've already done. And it's going to give us much greater confidence in the targets we have in terms of being able to rank those and really go after those on the exploration side of things.

So it's a discovery story. It's still early-days. We're getting spectacular results, and we'll have the first resource out by the end of the year. And then, it will be off-to-the-races and seeing how big we can grow that resource.

Gerardo Del Real: Excellent! Dave, thank you so much. Appreciate it.

David Kelley: Absolutely. Thank you, Gerardo.