Chakana Copper (TSX-V: PERU) CEO David Kelley on Securing an $8 Million Investment from Gold Fields at a Premium
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. David, how are you this morning?
David Kelley: Gerardo, I'm great, I'm great. How are you doing?
Gerardo Del Real: I am doing well. It seems like every interview I've done recently, I start by saying, "We all know it's a very tough resource market out there." And in this very tough resource market, you've been able to attract the attention of Gold Fields, none other than Gold Fields, to the tune of $8 million dollars Canadian at a significant premium. Your shares were trading in the $0.30 to 0.35 range. They came and found them attractive at $0.51 Canadian. First things first, congratulations, because I've got to believe this gives you a lot of ammunition to go after what some believe are the best targets on the property, on the Soledad project.
David Kelley: Absolutely, Gerardo. It's important on so many different levels. Just having a quality cornerstone investor like Gold Fields come in, no strings attached, just a straight private placement at a premium, provides a huge endorsement to the project and our team and what we're doing. It also brings a lot of technical expertise that Gold Fields has. They're a serious operator globally. They have a very impressive mine in Northern Peru, the Cerro Corona mine that they operate. They've got that operational ability, deep technical expertise in all aspects of mining. We're certainly excited to be able to team up with these guys and get their input, and put the money where our mouths are, and put it in the ground, and really test the potential of this project.
Gerardo Del Real: You mentioned Gold Fields’ technical and operational expertise. Can you explain, for readers and subscribers that maybe are not familiar, can you explain a bit what the due diligence process is like when they're vetting a project like Soledad to come in and take a strategic investment to the tune of $8 million dollars? What do you go through as a company, and as a CEO, during that process? Because I know it's rigorous.
David Kelley: Absolutely. In fact, extremely rigorous in this case. They were very, very thorough in their due diligence, and that just makes me that much more confident that we've got a winner here. They brought a multi-disciplinary team to site, very thorough in their data analysis and preparation prior to getting to site. We're talking mining engineers, resource geologists, global project generation people, business development people, even social people. They were extremely due diligent in their way they approached this investment. It was a 6-month period of time from start to finish.
It is a huge validation point for us to get to that point. As you know, it is a tough market, and being able to bring in a cornerstone investor like that, even at a premium, it just tells me and our team that we're doing the right thing, and we've got a project that they see the potential in enough to put a significant investment in like this.
Gerardo Del Real: You are anticipating a modification to an existing permit that will allow you to drill what many believe are the best and most exciting targets on the property. How is the dialogue coming along with the folks there in Peru?
David Kelley: We continue to push that along, we're in that final stage of approval. We've passed two major milestones in getting to this point. We're just waiting on the final approval, it's called the Initiation of Actividades. Our guys are in there on a weekly basis, meeting with the people involved in the final approval process. We've been giving out that guideline of May, June for a drill startup again. I still think that's a realistic timeframe for us. We're still pushing hard to meet that deadline.
We've got two drill rigs on the property, they're ready to go. With this additional top-up funding, we're going to be super aggressive with the targets we have once we get that approval and start drilling again.
Gerardo Del Real: Again, in a tough resource market, that's music to my ears. What does the treasury look like now?
David Kelley: Once we close the deal, it's supposed to close on May 10th, we'll be right at $13 million. We're at $5.3 now with our own treasury, topping it up with another $8 million we'll be right over $13 million, which is a great place to be. More than enough money to be aggressive on the drill program. We had planned a 20,000-meter drill program, but that was just simply drawing a line and saying we'll drill the top 10 targets or so, and then do resource drilling on two or three breccia pipes to add to the drilling that we've done so far.
Now with this additional capital that we have to work with, the exploration can really be blown wide open. There's no reason why we can't get out there and test a lot more targets. Gold Fields’ interest in the project was to see us really explore the potential of the project, and test many more targets than we had planned for this year. Our goals are very compatible. We need to get a resource estimate done to do what we said we were going to do for our shareholders, but at the same time, they want to see us get out there and really advance the exploration part of it and test as many targets as we can.
It's a great win-win situation for everyone. They get to see a multitude of targets tested, we get to do more resource drilling for meeting our commitment with our shareholders, and we hope to start that as soon as possible with these two drill rigs, and run it hard through the end of the year.
Gerardo Del Real: Looking forward to it, David. I know that you are on the road right now. I understand the reception has been very positive. I also understand that you'll be at the 121 Mining Investment Conference on June the 4th and 5th, in New York. I'm looking forward to seeing you there, I will be there as well. Hopefully, there's a lot more to talk about by then.
David Kelley: Yeah, absolutely. That's always been a great show for us. We went there last year, and we plan to be back. It's a great venue for meeting with investors. Yes, we certainly hope to have new drill results and more to the story by then.
Gerardo Del Real: Fantastic. David, thank you so much for the update. Chat soon.
David Kelley: Absolutely, Gerardo. Thank you very much.