Regulus Resources (TSX-V: REG)(OTC: RGLSF) CEO John Black on Extending Mineralization at the AntaKori Copper-Gold Project

John Black: Doing well. It's good to catch up with you.

John Black: Okay. Well I think you're definitely on the right track track here, is that we consider this a very good hole. It certainly met its objectives on what we were looking out to test on this hole. I think the market got a little bit ahead of itself expecting a spectacular hole and we delivered a good hole. So there's a little bit of a pullback. But as you describe, it creates a heck of an opportunity for people right now.

So the objectives on this hole were twofold. One, we wanted to test for skarn mineralization, which would be the Northern extension of skarn mineralization, which forms the bulk of the mineralization we see at the Antakori deposit, pushing our resource to the north. And then also testing high grade breccia hosted mineralization that we previously intersected in hole 26, and a number of other holes in the area.

And both objectives were met by this hole. And we've got a nice front of skarn mineralization on the top part of the hole, which included 185, 186 meters of 0.41% copper. Would've been nice if the grade would be a little bit higher than that, but that does fit above cutoff, it will be an extension to the mineralization, which will most likely push our conceptual pit to the north. Add tonnes to the resource that we already have in hand.

And when we do that, when that pit wall gets pushed to the north for new holes like this, it also captures resources or blocks that are identified as resource, that sit beneath the pit right now, when we push that wall forward, we don't get just where we drill intercepted things, we get additional mineralization. So it's an important hole, certainly met the objectives as a hole on that.

And then the more important part of this hole is the high grade breccia that we intersected at depth on this. So this one, the headline numbers on this were two intervals. One was 50 over 50 meters of 2.64% copper equivalent. So very nice high grade that's copper, gold, and a little bit of silver associated with it. And at the very bottom of the hole, we hit 36 meters of 1.37% copper equivalent. And this hole actually terminated mineralization the last 11 and a half meters of hole and a little over 2% copper equivalent.

So it terminated because we reached the capacity of the drill rig that we're using for this. It could no longer lift the rod. So we stopped that hole in well-mineralized rock. This was following up on hole 26, that you mentioned. 26 was one of the most spectacular holes we've drilled on the project and it had a 473-meter interval of this breccia hosted mineralization. We crossed that at a high angle to get a better idea of dimensions.

And so at first glance you'd say, "Well, you only hit 50 meters and 30 meters of mineralization, 36 meters of mineralization, so it's less." That's true, but the intervening interval between those two intercepts went out into the wall rock quartzites, which are a notoriously poor host, but they're broken up and they do have a moderate grade mineralization in them and a number of little intervals. To us, it's a very encouraging sign that those wall rock quartzites are well-mineralized. It's indicating that we're close to something on those holes.

So we consider this a very, very good result and certainly encouraging for us to continue to further define these high grade breccias and continue to look for more of a porphyry style source, that's driving these breccias in the overall skarn development. So very pleased with the results on this hole. I can understand that maybe the market was looking for something even more spectacular, but if you look back at these results and put them in context, they're certainly encouraging and continue to open mineralization to the north for us.

John Black: Well, with the two rigs turning right now, this project is not the easiest drilling, so the advance of the drill rigs is a little bit slow on them. And you mentioned the turnaround now in assay labs, which we're all experiencing some challenge with that, that's improving gradually. Now we're starting to see a little better turnaround on the assay labs.

So we would anticipate now that we'll be able to put out about two holes, every say, six weeks or so on the project, six to eight weeks, which is still slower than we'd all like to see on it, but it's important to note that we've had a long gap without much information on this project. That's why I think all eyes were on this first hole coming out because it's been some time. But I'm very pleased now that we've got the pump primed, if you will, and we'll start to see these results come out. And the more results we get on the table, it'd be easier it is for us to see the overall picture.

I've commented over the years, this project has a tendency to deliver just a killer hole about every 10 holes on the project with a little lot of good holes in between and an occasional dud on it. And so judging everything on one hole is a little dangerous on this. I'll be happy when we start getting more releases out during the year and when we see more holes, and I'm quite confident we'll be delivering the type of results that'll excite people.

John Black: Absolutely. And I think that's a key point. A lot of times people, because we're talking about expanding the mineralization to the north and testing new targets in that area, it's easy to focus on this as an exploration play, and it certainly has that aspect to it, but it's important that people don't forget that we already have a sizable resource in hand, and that's a little over 500 million tonnes, about 50% indicated about 50% inferred and a little over 500 million tonnes at a 0.7% copper equivalent. So better than average grade for large, open pittable copper resource and very low strip ratio on that.

And that's only a portion of the overall project, because what we have is a portion of a large, copper-gold deposit that extends onto the neighbors ground next door, those neighbors being a joint venture called the Coimolache joint venture, which operates the Tantahuatay mine. And that's Buenaventura and Southern Peru Copper with a local Peruvian company called ESPRO. And jointly, they operate an oxide mine that's mining the oxide cap over a very extensive copper-gold sulfide deposit at depth of which we have about half of that.

So when you look at the overall district with our portion of the deposit and the neighbors portion of the deposit, this is clearly a deposit that has all the earmarks of being economically viable. And the size it'll attract even the largest copper or gold miners. So it's one that's on the radars for those large companies. And we're trying to expand that farther to the north and prove our hand at the poker match, if you will, on this moving forward. And it's important that people don't forget that resource we already have in hand.

John Black: Great. Thanks for your time. Look forward to talking soon.