Chakana Copper (TSX-V: PERU) CEO David Kelley on Drilling at the Soledad Gold-Copper-Silver Project in Peru: “This is What You Dream of”
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Chakana Copper (TSX-V: PERU)(OTC: CHKKF), Mr. David Kelley. Dave, how are you this morning?
David Kelley: I'm doing great, Gerardo. How are you doing?
Gerardo Del Real: I am well. You had some news today that had several layers to it that I want to work through. Let me start with the headline, which reads, "Chakana reports 226 meters of 0.34 grams per tonne gold, 0.36% copper, and 16.9 grams per tonne silver, which equates to 1.11 grams per tonne gold equivalent.” These results are from the Paloma East target at the Soledad Project in Peru.
Interestingly, the mineralization starts just at 3 meters, so right at surface. Can you provide an overview? And then let's dig into the details a little bit more because there was a lot to get through.
David Kelley: Yeah, Gerardo. I couldn't be more excited with where we're at right now with Paloma East. We've just put out four more holes in addition to the three we put out on September 17th. So that's seven drill holes. Scout drilling, as we talked before, we do these initial scout drilling programs to answer those three questions. Is it mineralized? Is there high grade? And do we have some sense about the shape?
These seven holes have done that for us. It is a mineralized system. There are definite zones of high grade and that's really exciting because we know we can track those high-grade zones at depth. So that's going to increase. And then the size of the breccia has just really been spectacular. It's a much, much bigger breccia system than we had anticipated to begin with.
Another point to make about today's release is at 226 meters there was a very similar result in hole 135 on the September 17th release, but that was drilled from another platform in the opposite direction as hole 138, I believe it was. So we've got these two holes going in opposite directions, having very similar long runs of good mineralization of gold, and copper, and some silver. If you look at depth and measure the distance between the bottom of those two intercepts, it's over 100 meters apart.
So it's very, very significant these results here. There aren't a lot of drill results, but we know that as we keep drilling in a system like this, that there's variability in the grades, and we're going to see that variability come out. I know we're going to hit more high grade in these zones as well.
Gerardo Del Real: You mentioned something in the release that I don't think a lot of people are going to catch and I know many will not catch the significance of it. That's the evidence of proximity to an underlying intrusion. Can you speak to that a bit in the high concentrations of pyrite?
David Kelley: Yeah. It's really, really important to talk about hole 137. That's a drill hole that completely surprised us. As we spoke last time, we expected to be out of breccia at about 170 meters down hole. We got to that point and it was still in breccia. We have a golden rule on the project, if you're in breccia, you keep drilling. We kept drilling, and we kept drilling, and we kept drilling, and we didn't get out of breccia until we got to 627 meters depth, which is about 530 meters below the surface, and directly below the surface breccia mineralization at Paloma West.
So it was a very, very significant hole geologically to expand the footprint of the breccia system that far. We have really good mineralization in the top 300 meters of that, including the mineralization. We were just talking about the 226 meters, 172 meters in the last release. That's all sitting at about down to consistently down to 200, and then we start losing control. But we've got good mineralization down to around 300 meters. That pyrite zone we hit, it occurred at a very specific stratigraphic layer at depth. We've seen this before, and we get really, really high concentrations of pyrite.
There's two important points to make here. Oftentimes, pyrite sits above and further away from the copper zone, which the copper zone is often closer to the heat source. This is what we call primary zonation, a very distinct zonation related to temperature. We fully expect to see that zonation as we go deeper. In fact, we're starting to see the telltale signs of that because the last 53 meters of the breccia had a tenfold increase in the molybdenum levels all the way up to 0.14% molybdenum. That's very, very high molybdenum. Molybdenum is one of those elements that stays very close. It's associated with the higher temperature style mineralization. So that's the first indication that we've really seen. We've actually seen this in Breccia 6 as well, a very similar feature at depth, an increase in molybdenum. So it's an important thing.
The second point I would like to make though about the pyrite is a lot of the high-grade mineralization we've seen in the Soledad system has been related to pyrite being replaced by chalcopyrite, the copper-bearing sulfide mineral. There's great photographs of that today in the news release. If you go back to the last figure and look at some of those pictures, I referred to two other news releases where we've seen that exact same thing at Breccia 5 at the same depth in the stratigraphic sequence in breccia 6.
When we see lots of pyrite, I get excited because I know that is one of the settings that you have, where you can come in and get this late copper replacement that produces some really, really high, some of the most spectacular high-grade copper zones we've seen. It's often with silver and with gold. So I get very excited, even though we didn't hit high grades in that lower section, it's still very, very significant for the future potential in the Paloma area.
Gerardo Del Real: Let's talk about what's next, which is Paloma West and then Huancarama, right?
David Kelley: Yeah. As you know, when you've got a drill rig on the property, it's costing you money, so you got to keep that thing busy. Yeah, we finished these seven holes and we went straight to Paloma West, and we started drilling. We've completed 11. I think we're right on the 12th hole. We're probably a hole or two away from finishing Paloma West. Then the rig will be moving over to Huancarama and soon we'll be having results come out on Paloma West.
Gerardo Del Real: A lot to look forward to. I know the stock has seen some selling pressure here recently. Full disclosure, I'm biased. I've personally added to my position. Do you want to speak to that? Or is that something that in the mid to long-term doesn't really affect the approach to drilling when you have these kinds of results? We're not even in what I know the company internally believes is the most prospective part of the complex, which is Huancarama, right?
David Kelley: Yeah, that's right. I think there's just a lot of nervous investors out there right now. Certainly we've got the U.S. elections coming up. There's a lot of uncertainty about the outcome of that. There's been the effect of COVID-19. There's just a lot of people I think that are a little bit jittery. Copper price is still hanging in there above $3. There's been a little bit of pullback in gold and silver, but they're still really strong, especially when you consider that we've got a high-grade deposit like we're dealing with it Soledad. So, I'm not concerned about it long-term.
I do think we're grossly undervalued because we're in a discovery. A lot of the juniors out there, they have a higher market cap, and they're simply trying to find something. We've already found it. It's a great time. It's a great opportunity for people to come in. You can invest right now at the same price point that Gold Fields put $8 million into the company more than a year ago, after doing extensive due diligence. There's really no better time to add to a position or start a position than right now.
Gerardo Del Real: An important point to make is that this a drill program is fully funded, correct?
David Kelley: Yeah, it's fully funded. We're right at about 3,400 meters all up since we started out of the 15,000 meters, so we've got a long way to go, Gerardo. It's so exciting. This is, for a geologist, this is what you dream of. You want to get into these situations where not only have you made a discovery with huge upside potential, but you've got the money in the bank, you've got the drill rig on the property, and you've got a super high-performing exploration team in Peru making it all happen.
I couldn't be more excited. We're going to have a lot of one-on-one calls in the next several months, Gerardo, because we're going to keep doing what we do best, which is finding high grade at Soledad, and then come on the air with you and talk about it.
Gerardo Del Real: Looking forward to it, Dave. Thank you so much for your time today, exciting times.
David Kelley: Absolutely. Thank you, Gerardo. Have a great day.
Gerardo Del Real: Thank you. You as well.