Canasil Resources (TSX-V: CLZ, OTC:CNSUF) CEO Bahman Yamini on Advancing Options for Brenda Gold-Copper Project & Drilling in Mexico

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Canasil Resources, Mr. Bahman Yamini. Bahman, how are you this morning?

Bahman Yamini: Great. Thank you very much, Gerardo. Good to be with you.

Gerardo Del Real: You had some news yesterday that typically doesn't get a lot of attention. Right? We see the news releases often where company ABC has filed an updated technical report, and typically that really flies under the radar. This specific release was different to me, and I'm thankful to you for coming on because I wanted you to provide a good overview of it, but it was different to me because of the opportunity that the Brenda Gold-Copper Project presents and what filing this technical report allows Canasil to do. Of course, you're currently drilling in Mexico. You have several very prospective projects there, but this has to be a project, the Brenda Gold-Copper Project, that's getting more attention in light of copper trading at $3.76 a pound. Right?

Bahman Yamini: Yes, of course it is. And that it's in a great location and an area that's getting a lot of attention, but particularly I think the focus on copper, and gold and copper, and increasing gold and copper prices is a very important trigger here.

Gerardo Del Real: Excellent. And can you walk me through the release a bit? I mentioned the flexibility that filing this report allows for you. Can you speak to that just a little bit, Bahman?

Bahman Yamini: Of course. I mean, the reason for the updated technical report is that we have an extensive database on the Brenda project that there's been extensive work done on it over the years. We have a complete suite of data from airborne geophysics, satellite imaging, extensive ground geochemistry, and very importantly, 12,000 meters of drilling and 65 drill holes, so quite an extensive drill database as well. And the new developments recently have been that there've been a couple of very important studies on these porphyry deposits, where they track, both surface and downhole geochemistry, and they analyze vectors based on both the main methods, which are the gold, copper, silver, lead and zinc, but also on path finder elements like molybdenum, bismuth, antimony et cetera. By measuring ratios in these metals, you can track where you are in the system and target where the core of the system is.

And this has been the main driver of this report, and we've done a lot of work on it. There's been two porphyry experts, Wade Barnes, who had extensive experience with Northgate Minerals and Centerra Gold, working on the discoveries of the Kemess Underground and Kemess East deposits, which just 15 kilometers south of the Brenda Project, and also Brock Riedell, who is a recognized porphyry expert. They put a tremendous amount of work into this and analyzed all the data to come up with the recommendations and the conclusion in this report, which we can go over together.

Gerardo Del Real: I'm familiar with Brock. He's looked at a couple of projects, including the Willow Project over in the Yerington camp in Nevada for a company I'm involved with that I'm a shareholder of. His work is top-notch. I know he doesn't impress easy, so when I hear that he concluded that the geological environment at the Brenda Project is similar to major porphyry deposits worldwide, that gets my attention, because Brock isn't one of these people that you can just bring onto the property to tell everybody how great it is. He knows his stuff and he's a person of the utmost integrity. So that's got to be encouraging on your end.

Bahman Yamini: Absolutely, and that's a key. Brock's an internationally recognized expert, as you mentioned. He's respected by the major mining companies and he's known for his expertise on these porphyry deposits. And you're absolutely right, he doesn't impress easy. He's very matter of fact and he calls it the way it is. And for Brock to conclude that we have the same geological environment as major porphyry deposits he has seen is a huge step for the project. And also, his involvement in very methodical analysis and targeting to find the future targets and future drill targets for us going forward, I think is a key asset for the project.

Gerardo Del Real: You and I had a conversation I believe three and a half or four years ago about spinning out the project. And then we got the mother of all bear markets in the resource space, specifically the base metal space. Right? And so that kind of diminished the options. With copper at $3.76 a pound, with gold at $1,826 right now, I have to believe that you have multiple options on the table to either raise some capital and go drill it, or possibly spin it out into a separate vehicle, because the project is a project of merit that could probably justify a pretty, pretty compelling valuation within the context of how inexpensive Canasil is right now. Right?

Bahman Yamini: Exactly. You're absolutely right on all fronts and that's the whole logic of filing this update. The technical report has a platform for advancing the projects in exactly the way that you mentioned, either through opening up funding opportunities, opening up short venture opportunities, and also being able to revisit the spin-out concept that we went through in 2017. And in December 2017, we obtained exchange approval, court approval and shareholder approvals for the spin-out. It didn't go through because of the bear market and the financing conditions there at the time. But now certainly, because we've been through all that and all those files are in place, if there's an opportunity for the spin-out, it will be much easier this time. And a prerequisite for that is to have a current and updated technical report on the property of merit, which is the Brenda Property. So that is in place now.

So it opens up all those avenues for funding and advancing the project, in addition to the fact that now with the input from Wade, from Brock, from Bob Lane, who prepared the report, et cetera, now we have some extremely compelling targets. And what we find with their analysis is that a lot of the drilling has been on the zinc-rich periphery of the core of the system, which is typical because that's where you've possibly had the highest surface gold-copper geochem. So that's where we started drilling, but now we have the vectors pointing to the core of the system and in addition, we have two other major targets, and so it could be something quite significant on this project.

Gerardo Del Real: You have a portfolio of, as I mentioned, very prospective projects, both for precious metals and the base metals. I've got to believe you're getting more phone calls to possibly joint venture some of those projects.

Bahman Yamini: Yes, that's all on the table. We are looking at all those opportunities. Obviously we are extremely focused on drilling our La Esperanza high-grade silver project in Northern Zacatecas and Southern Durango. We already had initial success with Nora. We're preparing plans for more drilling at Nora. All of these, of course, are contingent on funding. And of course we are looking at the other projects and having discussions on the other projects in the portfolio with the potential for joint ventures or opportunities for advancing those as well, so really trying to advance on multiple fronts.

Gerardo Del Real: It's a lot of activity for a company that has a market cap of, where is it right now approximately, Bahman?

Bahman Yamini: About around $15 million. Yeah, it's low, but hopefully that's an opportunity that gives upside opportunity. I'd just like to completely quickly also note to the location of Brenda, which is very important. It's very close to a former producing mine, the Kemess South Mine, and a proposed new mine, the Kemess Underground Mine, with about $500 million in investments in infrastructure for power lines, et cetera. It's rare in that it has direct road access onto the property. And it's also located close to the Benchmark Metals property, which is receiving a lot of attention where they've raised about $70 million over the last two years for exploration and drilling. So it's a very active area and that adds to the mix, as you mentioned, of this busy mix with the silver in Mexico and the gold-copper in BC to advance these projects.

Gerardo Del Real: A lot to look forward to, I'm looking forward to the assays from La Esperanza and future drilling at the other projects. Anything else to add, Bahman?

Bahman Yamini: Great. Well, thank you very much. And I look forward, hopefully the markets continue to develop positively and we can continue the active work, because there is a lot of potential on these projects.

Gerardo Del Real: Agreed. Agreed. Thanks again.

Bahman Yamini: My pleasure. Thank you, Gerardo. Have a great day.

Gerardo Del Real: You as well.