Chakana Copper (TSX-V: PERU) CEO David Kelley on the Spectacular High-Grade Copper-Gold-Silver Results from Initial Drilling of Breccia Pipe 6 at the Soledad Project in Peru
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. Dave Kelley. Dave, how are you?
David Kelley: I'm great, Gerardo. How are you doing?
Gerardo Del Real: I'm doing excellent, and I believe shareholders got to be happy today. You just released results from Breccia Pipe Six. You intersected – and let me be clear, you've been releasing a lot of excellent results from the other pipes, this is pretty incredible – 22.8 meters with 2.93 grams per tonne gold, 1.37% copper, and 1,283.2 grams per tonne silver. That's 21.8 grams per tonne gold equivalent or 14.29% copper equivalent. Heck of a start on a new pipe there, Dave. Provide some details.
David Kelley: Yeah, Gerardo, that's right. It is a great start to see those kinds of grades early on in drilling the pipes. As we've seen in drilling Pipe 1 and Pipe 5, the more you drill the better you can delineate these high-grade zones. So to start off already tagging into these very high-grade ones, especially with respect to the silver for whatever reason. We're not sure yet why the silver grades in Pipe 6 are as high as they are, but we really, really hit some spectacular grades to start with. We're excited to do some more drilling on 6.
Gerardo Del Real: And let's be clear, like the other pipes, it's a shallow mineralization. Right?
David Kelley: That's right. Breccia 6 is a very prominent pipe. It sticks right out of the ground. There's a great photo of the pipe in the news release that shows the steep vertical walls of it. It starts at surface at about 35 meters diameter. We expect it to increase at depth, like we've seen in the first two pipes that we drilled in detail, Breccia Pipe 1 and Pipe 5. The pipes have what we call an inverted carrot type of morphology, which is a function of how they form. We expect that Pipe 5 will increase in diameter at depth as we continue to drill it.
Gerardo Del Real: I see that you also tested Pipe 3 East, and you didn't get the same long runs of the mineralization similar to 1 and 5, and now 6 of course. You did get some short intervals that were pretty exceptional according to the release. Can we talk about that a bit?
David Kelley: Yeah. It's a very interesting geologic part of the story. It's a very large breccia, and it has very impressive brecciation textures to it. It has a lot of vuggy zones in it, where the open space in the breccia has not been infilled with sulfide minerals, which is what we see on the other three pipes. We're still trying to interpret what that means. We think that the intercepts we do get in Breccia 3 are important, and those do need to be followed up because those high-grade intercepts don't just disappear. Right? They came from somewhere, so it will be part of our future targeting to try to figure out where they come from.
From our standpoint, we look at it as we drilled four pipes, and three have come in very strongly, and we've got 17 confirmed pipes, plus an additional 12 pipe targets that are supported by surface geochem, geophysics and that type of thing. So if the hit rate continues where we're at now, I think the project will be in a really good position as we continue drilling.
Gerardo Del Real: How are things coming on the permitting front? I know we're waiting to be able to get into the summer drilling, right? How's that moving along?
David Kelley: Yeah, that's going well. Everything's in the hands of the regulators in Peru. We monitor that weekly with our team in Peru and contacts that we have in the ministry. Everything is going well in that regard. I tell our guys as soon as the ball comes back into our court, it immediately goes back into their court. So whatever we have to do to get responses or supporting the information, but so far it's good. We've got a good communication dialogue going with them and everything seems to be tracking as we would expect.
Gerardo Del Real: Fantastic. For people new to the story, the release, frankly, has caught the attention of the market. You're up about 23% as we speak. For people that may be newer to the story, can you provide a brief overview of what they can expect here in 2019?
David Kelley: Yeah. This project is a story that is slightly different than other stories. We're drilling tourmaline breccia pipes that are related to an intrusion at depth, and previous explorers had focused on trying to find that intrusion. Our view was that the grades are so spectacular, and there's so many pipes that our strategy is to focus on drilling out those breccia pipes. We brought in mining engineers that have looked at the shape and depth extent and the separation between the pipes to address the aspect of minability of the pipes. The mining engineers are very excited about the minability of the project, just in terms of the way the pipes present themselves, the relief on the project, the ability to interlink mining infrastructure to mine multiple pipes at the same time.
That's really our strategy and what's driving the project. We've only drilled 4 out of 17 pipes to date. So we have a long way to go. We think the results so far are really exceptional in terms of solidifying this idea that this could be a minable project in the future.
Gerardo Del Real: You know, I mentioned that you were up 22%, real time update you're now up 25%, but despite that, I'd like to remind people you're trading at about $0.43 Canadian right now. Your 52-week high's about $1.05 Canadian, and you still have a tiny market cap, even after today's surge, of under $34 million Canadian. There's a lot of runway for Chakana, especially if you keep delivering these types of results, Dave.
David Kelley: That's right, Gerardo. And it's very pleasing to see the response in the market. We certainly think that our project and our team is exceptional, and we've got a long way to go and we love to see that kind of response. It is a great time to get involved in the story because as you mentioned, we're still well below our high of $1.05 from last year.
Gerardo Del Real: And again, for people that are not familiar, if people want shares, they're going to have to buy them in the open market, which I suspect is what's happening today. They know they can't front run a financing because you have a pretty robust treasury. Can you speak to that a bit?
David Kelley: Yeah, that's right. We've got $6.5 million in the bank and we're very frugal with how we spend that. We're running our own geophysical survey on site right now. We've completed 23 surface loops over all of the targets and breccia pipes themselves, which is going to be a great targeting data set for us. That money is being spent well, and it will carry us through the initial drilling of the targets that remain. So we expect to get some good news flow and good traction from that as well.
Gerardo Del Real: Fantastic. Dave, thank you very much for the update. Appreciate it.
David Kelley: Always a pleasure, Gerardo. Thank you.