Regulus Resources (TSX-V: REG) CEO John Black on Significant Addition to Board of Directors & Recommencement of Drilling at the AntaKori Copper-Gold Project in Peru

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Regulus Resources (TSX-V: REG)(OTC: RGLSF), Mr. John Black. John, it's been a busy October for you. How are you?

John Black: Doing well, Gerardo. Lots of news from Regulus.

Gerardo Del Real: Lots of news. The two most recent pieces of news; you've added to your board and of course drilling has recommenced at AntaKori. I want to start with the board addition because it's an impressive name. Can you provide some context?

John Black: Yes, I can. Many companies like ourselves tend to be made up of exploration geologists and technical people. Often when a junior company starts out, you have a board with peers that are similar to you in experience, they understand what we're doing technically and it's a comfortable board. But a common mistake that a group like ourselves makes is we get more geologists and more technical people on our board. What we really need is to better balance our boards by adding people that have more business experience, more compliance experience and financial backgrounds.

We are very fortunate that Anna Tudela has agreed to join our board. Anna has a very impressive background in corporate finance, corporate governance and experience acting on boards, both for small companies and very large companies. Her most recent experience as Vice President of Diversity, Regulatory Affairs and Corporate Secretary with Goldcorp. She happens to also be bilingual as she is from Peru originally, but has lived in Canada for a long time.

There were just so many points where she connected with our company and project, being able to have that connection with Peru, having the language capabilities to understand everybody throughout our organization, and also with a strong financial and corporate governance background that is is very complementary to our strong technical board. She is a great addition to our board and it really rounds us out and makes us a stronger company overall.

Gerardo Del Real: I'm sure it's not a coincidence, John, that she also has a ton of experience in acquisitions.

John Black: Absolutely. That was one of the things that really caught our attention. She's been through multiple M&A scenarios throughout her career and often heavily involved herself in the details of those transactions. That's very important experience that she brings to our Board. I think people probably don't fully appreciate this, but Jason Attew is also a relatively new addition to our board as well. He joined us just over a year ago. Jason also gives us a similar complementary background, in that he's been involved with a lot of M&A and a lot of corporate finance and knows the gold space well.

We are predominantly a copper story, but we are having increasing interest from the gold companies. The gold companies are often much more active in the M&A scene. Beginning with Jason, and now particularly with Anna on the board, I'm really pretty pleased with the depth of the Board of Directors that we have now.

Gerardo Del Real: Which is a perfect segue to the other piece of news that has been very material here in the past week or so, and that's the recommencement of drilling at AntaKori in Cajamarca, Peru. Can we talk about the focus of the geophysical targets at the Anta Norte portion of the property? Because this has the potential to be a game changer for Regulus and for Regulus shareholders, correct?

John Black: Certainly. As you may recall, at the AntaKori project we have a very nice copper-gold resource in hand already. But we've been restricted due to permits to not be able to test a really interesting area to the north called Anta Norte. Anta Norte is the northern portion of the overall AntaKori project. We just received the permits to be able to step into that area early this year, and then the pandemic hit and we weren't able to commence work. But we're very pleased that we have recently commenced drilling.

The drilling started last week with our first drill rig. The second rig is getting in position now to start very soon. We've been wanting to drill at Anta Norte for several years now. We've had a slight delay due to the pandemic, but everything's set up now to be drilling actively.

Gerardo Del Real: Can you talk about previous drilling? You mentioned it in the release along the edges of the targets that returned long – and I mean long – runs of significant mineralization. Can you put that in context for me as it relates to where you're drilling now versus where you had those long runs of mineralization in the past?

John Black: What we've been able to drill up to date on the project has been based on access we have due to our collaborative agreement with the mine next door. This has allowed us to drill about the southwest quadrant, the southwest 25% or 30% of the overall geophysical setting that we're interested in. We angled many of the most recent holes towards the north to try to get as close to the Anta Norte area as we could and we have had very encouraging success from those holes.

We're essentially probing the southern margin of the target area and then reaching out as far as we can. By the time we get to the bottom of these holes, we're quite a bit below the target, but we still gather valuable information. We have drilled about 11,000 meters into the southern margin of the target, and of that 11,000 meters, over 60% of the drill meterage has been reportable intervals of copper-gold mineralization. That's a pretty strong hit rate on a new area of the project. It includes some of our best holes with some lengthy runs of very encouraging copper gold grades.

These will be big step outs on the first holes into the Anta Norte area, but we have been able to peek out in that direction with the previous drilling which indicates that we're going in the right direction. We're pretty excited about these holes as we start drilling. If the holes that we are drilling in Anta Norte now hit, it will add a substantial amount of mineralization to the northern side of the deposit.

Gerardo Del Real: Can you explain, for those new to the story, how you are approaching the initial holes, which will allow you to earn that 70% interest on this claim block and how that contrasts with the 100%-owned Regulus claims in the Anta Norte area?

John Black: The Anta Norte target area is over 1km by 1km in size. Some of the area is 100% held by Regulus, and some of it is held by a company called Colquirrumi, which is a subsidiary company of Buenaventura. We have an agreement with Buenaventura that will allow us to earn up to a 70% interest in the Colquirrumi ground. To do that, we have to complete 7,500 meters of drilling. 

Once we have completed 7500m of drilling on Coquirrumi ground, we announce that we've earned the 70% and Buenaventura then has a one-time window in which they can make a decision to allow us to stay at 70% or to elect to claw-back and go to 70% Buenaventura, leaving us with 30%. To exercise that claw-back clause, they would need to pay US $9 million. We would strongly prefer to keep 70% of the project if we could, but $9 million US also helps us on moving our exploration forward. 

 We have elected to start the Anta Norte drilling on strong targets on Colquirrumi ground in the northwestern portion of the overall Anta Norte target. This allows us to complete that 7,500 meters of drilling quickly and arrive at that decision point to determine what percentage of the project we have.  Results from this drilling will influence how we drill that ground in the future. Over time, we'll begin to move to the southeast and move on to ground that's 100% held by Regulus.

The drilling plan is also influenced by where we have surface access and weather conditions, as some of the area is wet for a portion of the year. So it's better for us to be drilling some areas now while it's the dry season. We can drill other areas even when it's in the rainy season

Gerardo Del Real: Sounds like a win-win. I couldn't help but notice, and you mentioned it, that a second rig will arrive here within the next few days or commence drilling in the next few days.

John Black: Yes, we're moving it onsite right now and we'll have that up and running quite soon.

Gerardo Del Real: Fantastic. John, anything else you'd like to add before I let you go?

John Black: No. Just that we are excited and very pleased to have the project up and running. We'll start to see the drill results coming out on a more regular basis now. It doesn't hurt at all that we're seeing a pickup in the copper price at this moment, which is something that we anticipate we'll continue to see in the coming months and years. It's a great time to be drilling on a copper project and even better when your copper project has pretty significant precious metals with it as well.

Gerardo Del Real: One last thing, can you remind everyone of the cash position? Because it's pretty robust.

John Black: Yes, that was the news that we announced at the start of the month, although it seems like a while ago now with everything else happening. Our agreement with Osisko Gold Royalties, which we announced on the 1st of October, was really critical because it resulted in Osisko paying us $US12.5 million, or a little over $16 million Canadian. That deal will close by the end of the month and we'll receive that payment, which will put us in a very good position to complete our Phase II drilling program and beyond, without having to have dilution involved with issuance of new shares. This is a straight cash payment to us, which is very, very good for our current shareholders.

Gerardo Del Real: A lot of cash, a lot of gold, a lot of copper. Not a bad place to be, John.

John Black: We're pretty excited and look forward to talking with you frequently over the next few months with drill results.

Gerardo Del Real: Thanks again for your time, appreciate it.

John Black: Thanks, Gerardo,

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