Categories: Base Metals / General Market Commentary / Precious Metals
Topics: General Base Metals / General Market Commentary / General Precious Metals

Orestone Mining (TSX-V: ORS) CEO David Hottman on Upcoming Financing & Drilling at the Resguardo Copper-Gold Project in Chile

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Orestone Mining (TSX-V: ORS)(OTC: ORESF), Mr. David Hottman. David, how are you? How is your family? Everybody healthy?

David Hottman: Yes, everybody is healthy. Thanks for the time here, Gerardo. I really appreciate it.

Gerardo Del Real: It's overdue. We haven't chatted publicly in a couple of months, and it's a different world, frankly. The last time you and I spoke, the company was excited about advancing the Resguardo copper-gold porphyry project in Chile. Obviously we're all adjusting to the new normal, but it seems like things are moving forward. 

You had a news release last week that I want to chat about. You're in the midst of a financing that I know is gaining traction with the gold market we have now. Copper seems to be rebounding. We talked last time about how successful the team has been in the past. I got to believe that at these levels Orestone is an incredible, incredible speculation for anybody looking for copper-gold exploration exposure. 

Can you give us an update on what's going on with Resguardo and how things are moving along on that front?

David Hottman: Yes. First off, on the financing, in mid-February we announced a financing just before all of this pandemic or the COVID hit. The markets being in such turmoil, we had to put it on hold with the price of copper down, but gold was up dramatically, and so what we're seeing here in the last couple of weeks is that financings in junior stocks are gaining momentum. 

Even though that's been on hold, the Resguardo property, we've been advancing it towards drill-ready. We've got all of the approvals necessary from the government down there in Chile. We have had three drill contractors to site. We're going back and forth on the bids to clarify and fine-tune them. We've also had a couple of road or basically bulldozer contractors on the site and providing bids as well. 

It remains a very big untested target. No new technical information in terms of geology. It's drill-ready. It's like a rocket sitting on the launch pad. We're going out and collecting up money to buy the fuel to put in the rocket.

Gerardo Del Real: Excellent. So the plan definitely is to raise the money – which I think you won't have any trouble doing – and then put it to work. Last time we chatted, we talked about how inexpensively you could test the target. That still sounds like that's the plan, right?

David Hottman: That's correct. As of last week, I started talking to people again. We've got a couple of funds that we're talking to as strategic investors that would be interested in 9.9% of the company. And we've got a large mining company that's interested in doing something, and that would probably be the 15 to 19% interest in the company. The thing that's attracting everybody is just the magnitude of the target and that it's more like connecting the dots with what we're seeing on the surface and the IP anomaly.

To test that in this early stage, the bids are coming in. Probably will be $125 US dollars per meter of drilling. So the way to look at that would be 1,000 meters is $125,000 US. We'll go out there and drill 1,000 to 2,000 meters. I think the contract or the bids we're getting for 1,000 meters with the option to go to 3,000 or 4,000 meters. So it's very inexpensive to drill. In other words, each drill hole, easy math, a 400-meter hole would be $50,000.

Gerardo Del Real: Excellent.

David Hottman: And you can drill into something that might be worth many billions. Actually, one investor recently said to me, actually, an analyst. He said, "You know, the stock is a dime." He said, "You know, if you don't hit, the stock goes to a nickel. If you do hit, it goes to $5."

Gerardo Del Real: That's the way it works. I mean, the target here is a compelling one. For those not familiar with why this could be one of those plays, can you provide a brief overview of the target and what makes analysts and investors so excited about getting a rig out there and frankly testing this thing?

David Hottman: Yes. The project is in Chile, just outside of a city by the name of Copiapo, which is a mining service town. Within a hundred kilometers, there's half a dozen huge mines or deposits. By huge, I mean a billion tonnes or more. The target itself is an IP or induced polarization anomaly, which is an electronic anomaly. Fairly shallow. It's about 150 meters of depth. It's over a kilometer long, approaching 1.4 kilometers, which is just about a mile for US listeners. The width is up to 800 meters wide, so it's almost a half a mile.

In terms of mineralization or evidence of mineralization, we have two sets of faults. One on an east-west basis, one on a north-south basis. Where they are in close proximity to this IP anomaly below surface, those faults at surface they're bleeding off copper and a lot of alteration. There's been some historic mining of grades 1 to 7% copper with a half a gram of gold that is a couple hundred meters off of one end of the zone. 

So all the evidence points to that this big IP anomaly is the source of all of that mineralization and alteration. It's a very, very large target. Based on the grades from the historic mining, our target would then be 1% copper and half a gram of gold. 300, 500 million tonnes at a minimum. So very, very large.

Gerardo Del Real: Good stuff. A lot to like for a company with a market cap of... Where is it today, David?

David Hottman: About $2 million.

Gerardo Del Real: I sense that'll change relatively soon. When do you think and believe that you'll be able to get a rig out there, given the current circumstances?

David Hottman: I would hope to finish up the financing by the end of the month, and we would have a rig out there mid-June, results mid-July.

Gerardo Del Real: Fantastic, fantastic. David, anything else you'd like to add?

David Hottman: Yes. From a $2 million market cap, something like this, if we saw a $100 to $200 million market cap, it wouldn't be out of the question with the discovery. And so there's a lot of upside, very little downside.

Gerardo Del Real: Fantastic, fantastic, David, thank you for the time. I'm looking forward to having you back on once the financing is closed and we have a solid date for drilling, which of course is going to be the next big catalyst. Thank you again.

David Hottman: Yes. Great. Thank you, Gerardo.