Chakana Copper (TSX-V: PERU)(OTC: CHKKF) CEO David Kelley on Maiden Resource, Prioritizing Targets & Next Steps at Soledad

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Chakana Copper, Mr. David Kelley. Dave, you said it'd be imminent. And by imminent, you meant days, apparently. And of course, I'm referencing the resource estimate that we teased the last time you and I spoke. You released those results early this morning on the 11th. We know it's just but a glimpse of what's on the Soledad Project. I would love for you to provide a little bit of context. And then of course, I'm going to play devil's advocate as I have some questions as well.

David Kelley: Sure. Yeah. Gerardo, well, thank you. Thank you for getting back to us. It's a pleasure to tell the story. We're excited about the results today. I mean, as you mentioned, it's kind of a glimpse into the future of what the Soledad Project has to deliver. And we couldn't be more excited about the upside potential, but we've learned a lot. The resource estimate, I mean, first of all, we've got high grade. And we've seen that throughout the drilling of the project, even going back to 2017. Really, really spectacular grades. But grades are nice, but it's got to hang together. And one of the things we learned from the resource estimate is that the mineralization hangs together very nicely. It's got great continuity. We hit these pockets with really super high grade zones, including that massive sulfide zone that we hit this past year and published that.

And that's surrounded by zones with very strong grades. So it has great characteristics in terms of what we think is ultimately will bode well for mining. I was pleased to see that some of the resource falls into optimized pits, which has much lower mining costs. So the tops of the breccia pipes can be potentially taken out and optimized pits. And then you got sufficient grades to warrant the underground mining of those, of the breccia pipe. So that's a great thing to start with. We learned a lot about the efficiency of drilling and how much drilling needs to be done for getting into inferred category, how much is needed for target testing and that type of thing. So it's been a very important milestone for us, but I think more importantly, it tells us about the future of the project. If we can continue to have the success and exploration that we've had thus far, this project could be very, very significant.

Gerardo Del Real: A couple of points that I want to make sure the market and listeners and readers are aware of. This initial inferred resource is just for seven breccia pipes, correct?

David Kelley: That's correct. Yeah.

Gerardo Del Real: And these pipes, you only modeled them down to a depth of approximately 300 meters. All the zones are still open at depth, right?

David Kelley: Yeah, that's correct. The average depth of the seven pipes is just over 300 meters depth. They're all still open at depth. So that's a really important point because we know we can increase the resources at depth simply by drilling deeper the pipes that we've already discovered. We don't have to find anything new. We just have to keep drilling deeper. And then of course, the other way you can expand the resources is by finding new pipes that have not been drill tested yet.

Gerardo Del Real: The other point I want to make, and I think it's an important one, is that only 16 out of 110 targets have been tested to date, right?

David Kelley: That's correct. And several of those, I mean, that includes things like the West Huancarama discovery that we announced last year. Nice runs of mineralization in that. We didn't have time to put that into... More drilling to get that into the resource, but that one's just sitting there. We've got other mineralized zones of other breccia pipes that we've tested that need more drilling. So there's still a lot more work to be done on the targets we've already tested. But for now, the view is let's get out there, let's take what we've learned from the seven breccia pipes and all the exploration data we have on those pipes, and let's use that to really refine our targeting. Let's look for bigger pipes, higher grade pipes, that type of thing. We think we have the data that'll allow us to do that, and that's one of the reasons we're so excited about the future exploration potential.

Gerardo Del Real: So if I'm adding the total resources here, across the numbers that you released today, I'm looking at nearly 200,000 ounces of gold, approximately 190,000 ounces of gold, accompanied by 11 million ounces of silver and 130 million pounds of copper. You mentioned the grades being excellent already. And again, this is just with seven of those breccia pipes included in the initial glimpse. Paint me a picture and give me an idea of what exploration looks like moving forward to start adding to those numbers.

David Kelley: Well, yeah, those are great numbers to start with I think. The mineralization, to have significant gold, copper, and silver together like that, I think, is very significant. We've seen that the pipes are zoned. They often have very strong, precious metals at the top part of the pipe, and it grades more into copper rich mineralization or copper with silver. So I think that those numbers are good. I think our initial resource is a good representation of what we can expect in new breccia pipes. As I mentioned, the geophysics that we're doing now is really exciting because it's showing us the shape of these mineralized breccia pipes as they go at depth. And we've got skinnier, smaller pipes that are high grade, and then we've got much bigger pipes that are high grade.

And so we're going to use that information to go and see if we can really pull apart and target larger breccia zones. We're excited about this feature that we've seen at Huancarama where pipes at surface coalesce into a much larger breccia body of depth. And so we're looking for that signature to see where else we can see that. And I really don't expect the exploration going forward to be any different in terms of success rate and the type of mineralization we found thus far. I really don't expect that to change in the future. I think we will be able to continue that success.

Gerardo Del Real: You have a major partner on this project. Can you share their initial thoughts on this initial glimpse on what could potentially be... Again, if it's 15% and we're already at nearly 200,000 ounces of gold and 130 million pounds of copper, and we're open at depth, this could turn out to be a project that has millions of ounces of gold and over a billion pounds of copper if the drill bit and mother nature keeps delivering? What was the impression from your major partner on the project?

David Kelley: Well, I wish I could tell you, but I haven't talked to them yet. I mean, obviously we keep a certain amount of the information, especially something related to initial resource. And I haven't talked to them yet, but I do know that going into all the work that was leading up to the resource estimate, they were very happy with how things are going. We have our AGM coming up and they've already voted their shares, their votes in the AGM. And so they're very excited. They're very, I think, happy with the way the project is heading. They obviously provide a lot of technical input and we value their input. So we have a very good relationship with them. And next time we talk, I'll be able to provide you with some input from their reactions. But I expect it to be very positive and very supportive.

Gerardo Del Real: Looking forward to it. Next steps, Dave?

David Kelley: Next steps are going to really focus on the exploring the upside potential. As you know, historically, we've had a lot of targets on the project. The original number was 110. We know that's changing now with the geophysics, but we're ramping up to have an exploration drill program this year that will test at least 20 new targets, targets that have not been tested before. We still have targets that have been tested that need more work. We can put those over on the side for a moment, go out and see how many more of these mineralized breccia pipes we have. And part of getting the resource estimate out, in addition to the knowledge we gained from it, but it allows us to start doing comparisons. If we can get another six breccia pipes or seven breccia pipes of similar size and mineralization character, that's potentially doubling the resources.

If they're open at depth, that's an expansion there. And so it really comes down to how many breccia pipes can we get into the mineralized category? And then what other targets can we test? We've got some very exciting, much larger targets to test that we haven't tested to date. We have a huge gold anomaly on the south side of the project that overlies an intrusive body. That has never been drilled by us. So we're excited to getting tests out there and test, not only more breccia pipes, but some other features as well.

Gerardo Del Real: Sounds like a busy 2022. Thank you so much for that thorough update. We'll be chatting soon, I suspect, again.

David Kelley: Absolutely. Thank you, Gerardo. Really appreciate it.

Gerardo Del Real: Thank you.

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