C3 Metals CEO Dan Symons on Khaleesi’s Best Hole and What Comes Next

0:15Dan Symons: This month, C3 Metals reported the highest grade hole yet in this Calisi copper project in southern Peru, 64.9 metres at 3.45 % copper equivalent, including 23.3 metres at 6.64%. C3 also holds a free port earn-in on its Bellagates project in Jamaica and has drilling underway in two countries. Dan Simons, the CEO. Dan, welcome to Mining Stock Daily. Thanks, Michael. Thanks for having me. Dan, help us out with an introduction here. You said Khaleesi is quite large. Walk us through the footprint and what you're seeing there. Yeah, I mean, this is a greenfield project that we put together by consolidating some mineral concessions in a very prolific world-class copper producing belt where Khaleesi sits about 30 kilometers from the large Las Pombas mine operated by MMG and about 40 kilometers from Abay Minerals' Costantia mine.

1:14um this area was a real checkerboard of prospectors that that had little pieces here and there and believe it or not there were some available to stake about four years ago and we started this process so we put it together uh what we liked about it it's one of these it's almost one of these crazy stories that a new road cut got put in and you got through this thin layer of glacial till cover with this road cut and the underlying rock had these porphyry styles not the the porphyry itself but porphyry style veins cutting up through it through a diorite with they were containing chalcopyrite so copper mineralization so we quickly started putting this together we went through the process of gaining social license with the local indigenous community and building that relationship of trust and the process to get drill permits, environmental drill permits in hand, which in Peru can be quite lengthy.

2:11So this has been a long time coming, but what really attracted us is as we got in and started doing geologic mapping in the area, we identified an alteration zone of a kilometer by a kilometer and a half, started doing soil sampling and rock sampling where there is some sporadic outcrop. Coming back with pretty good size anomalies of elevated copper, ran geophysics. And then we poked the first drill hole ever into this greenfield project about 13 months ago. So it's pretty new. We're learning more about it every day and we're really excited to see some high grade in that last intercept.

2:49Dan Symons: Now, I think the 2026 plan, you were calling for 21 ,300 meters at Khaleesi. you've had your last two releases I think you've reported about 16 ,000 done to date now that you have a step outs being a priority given what you've drilled so far what are your plans as far as a drilling campaign and how has that changed? Yeah so I mean we're still on track with that what we when we initially started we said we're going to do about 6 ,000 meters and as an initial phase one and every hole in that 6 ,000 meter program it was very wide spaced over a broad area testing different anomalies. They all intercepted copper mineralization over broad intervals.

3:37So we've now since kind of tightened up in a specific zone, what we call the main Khaleesi zone, and we've been focused there. And to date, we've through that nearly 70, 17 ,000 meters of drilling now have identified a zone where we start. There's a thin layer of glacial till cover, which it's a bit of a blessing and a curse for us, because if it wasn't there, little C3 metals probably doesn't have an opportunity to pick up this project. Someone else would have already had it. But it is a bit of a curse from a standpoint of we're blind in a lot of areas with very limited outcrop. of rock so we we are relying a lot on geophysics to uh to guide the drilling um and the geophysics have been working really well particularly for picking up the scarn mineralization particularly uh magnetics and gravity and that combination now has been working really well with our what we're seeing in our drilling so as soon as we get through that thin layer of glacial till cover which is runs about five varies in thickness from five to 50 meters we're immediately into a mineralized intrusive a diorite with poor freestyle mineralization it's oxidized for a thin layer and then quickly transitions to sulfides and what we see is there's this big wedge of scarn or limestone that's been scarn altered that's encapsulated within the diorite intrusive.

5:09And that's where we're getting our best grades is in the SCARN unit.

5:14Dan Symons: Anything that you can say about the rock and also recoveries, I guess, in terms of, because you did mention the parallels that you are with those major mines, Costantia as well as Bombas. You did have in your footnote something about 80 % recoveries. Yeah, so that's a thumb suck that we've used just based on looking at other operations around with similar sulfide mineralization. We're actually just about to kick off some preliminary metallurgical test work for the first time, being that this is a greenfield project that we just started collecting droll samples about 13 months ago. I think one of the opportunities for us with this is it looks like it's a pretty clean product with the rock.

5:58And what we're going to start testing is just a standard flotation for a copper gold silver concentrate would be primarily copper and then we would about so far with what we've drilled about 40 percent of the volume the intercepts are in what's called a magnetite SCAR magnetite being basically an iron hosted SCAR unit so one of the flow sheets that we're really interested in and looking at as we look globally around here a new project that capstone copper has it that there's

6:39starting to be quite attractive where if you if it's fairly clean you can float a copper concentrate on the front end and then where it be without that material would normally in a conventional flotation circuit go to tailings you would pass it through what's called a magnetic separator which is essentially a big drum that spins with magnets and you can capture an iron concentrate in the magnetite scarn unit that we're drilling you know we we often see uh iron uh grades between 40 and 64 percent and that's before it's concentrated so um you know typically if you above a 65 or higher percent iron con with little to no impurities.

7:27That's a very, very highly coveted product. So we're just about to kick off a process. It'll take several months to run that work, four to six months to get those results.

7:41Dan Symons: Now, the headline was hole five that you did announce yesterday. You also had the hole six and hole seven from the same pad. I believe the results have not been released yet, but was there anything visually you can say about those holes? Yeah, those holes are definitely mineralized. We're going to have to wait to see the assays. You know, I would say that this grade caught us a bit by surprise from what we've been seeing throughout the broader system. You know, we were getting more lower to moderate grade mineralization, very similar to the nearby Costantia mine. if we look at copper, gold, silver, and molly grades.

8:19But these SCARN systems are known to have high grades within them, and we may have just tapped into one. Right now, it's one drill intercept, so we need to systematically step out. We are doing that in 50 to 100-meter spacings in multiple directions to try and understand any geologic controls on this higher grade zone that we've encountered with this hole. It won't take a lot of volume out of these grains to potentially become meaningful. So we're interested in trying to understand the geometry, the continuity, and the potential scale of this higher grade zone.

9:02Dan Symons: Now, Dan, let's go north to Jamaica where you have your other two projects. At Bella's Gate, Freeport can earn 75 % by spending up to$75 million. What do you have there and why is Freeport paying an earn into it? Yeah, it's quite a large project. At Bella's Gate, it's 130 square kilometers. Over an 18-kilometer strike extent, we had identified 14 porphyry prospects. And this was through geologic mapping, geochemical data collection, geophysical data collection. And then late 2022 till early 2024, so about a year and a half, we embarked on drill testing four of these 14 prospects and we hit copper, gold, porphyry mineralization in all four.

9:52But what we could see in these is we believe we're very high level in these porphyry systems, which means that there's been very little erosion. typically uh porphyries you know they they're they're very large uh that means they can be capital intensive to drill out um capital intensive to build mines on but all the major companies love them because they supply 70 percent over 70 percent of the global copper supply and they're also the deposit style that once you you make that initial capital investment can run for decades decades and decades and and provide very steady uh cash flow for for the the large companies.

10:30So these types of deposits typically have a higher grade core to them. It's really just about temperature where different minerals deposit at different temperatures. And typically in a core of a porphyry deposit, you get a lot of copper sulfide mineral called boronite that deposits. And as that fluid moves away from that hotter temperature, the dominant mineral that will deposit is chalcopyrite, which is also a copper sulfide mineral, but lower grade than boronite. And then we typically see a pyrite halo or a pyrite shell around the chalcopyrite zone. So we measure the different ratios of those three sulfide minerals, pyrite, chalcopyrite, and boronite to try and understand where are we in the system.

11:15Because sometimes in some areas, you can be eroded right down into the high-grade boronite core. On some areas, you've eroded through the boronite core and you're on the other side in the chalcopyrite zone. in some areas what it looks like in jamaica it looks like the system's very well preserved and very little erosion as an evidence for that is when we start drilling and the drilling that we did from late 2022 to early 2024 when we start near surface the ratio of pyrite to chalcopyrite is about 10 to 1 and as we go down a drill hole that ratio decreases to 5 to 1 3 to 1 and around 400 meters, 4 to 450 meters vertical depth, we started seeing the ratio of pyrite to choc pyrite was around one to one.

12:00And we started seeing nothing pervasive, but started seeing our first sniffs of boronite mineralization. And that's where the, you know, the grade profile we were seeing was 0.2 to 0.4 % copper with 0.1 to 0.2 grams per tonne gold. And as soon as we started seeing some sniffs of boronite, We're seeing closer to half a percent copper and 0.4 grams per tonne gold. So what this program is, we were a little company and still are a little company, but we're even smaller. And the geology was telling us, look, we're going to want to get deep holes into this system. Deep holes are capital intensive and creates a higher level of risk for a company of our size and scale.

12:43So we behind the scenes went around. And fortunately, we had several majors that were interested. At the end of the day, we selected Freeport, which we're very confident that's been the right decision. They've been an excellent partner, very collaborative effort. And we're operating on their behalf with their funding. And we've just had a very large drill rig arrive in Jamaica this past weekend, actually. So our experience typically takes two to four weeks to get it out of customs and mobilized to sites. So we estimate by the end of this month, we're going to start drilling those deep holes that we've designed, about 11 ,000 meters of drilling that we think we can get done around the middle of the next year.

13:21And for the deep drilling, we're targeting 1 ,000 to 1 ,500 meter holes with a drill rig that has the capability to drill 2 ,000 meter holes.

13:32Dan Symons: Bring us up to date then with the timelines with the deal right now with Freeport when you want to get things done there. yeah so we we've they have invested a bit we we did some shallower drilling we did uh very expansive it was over 80 square kilometers 3d ip survey so 3d ip is the most modern ip technology where we can see um the conductivity resistivity data as well as the chargeability for locating those sulfide minerals down to about a kilometer of depth so before we were we're going to drill deep, we wanted to see deep. That was a tremendous undertaking to run that survey as it was, it's all ground-based.

14:13This is fairly rugged topography with a lot of vegetation. Fortunately, it's a sparsely populated area with pretty good road infrastructure where then we could just cut in shorter roads to get it done. But we were interrupted last year with Hurricane Melissa and while we were restoring infrastructure because of all the landslides and roads being blocked and power outage in the area for two months we shifted our focus to community relations and community support and then restarted that program in January we increased it from 70 square kilometers to over 80 square kilometers with the positive results we were seeing with some new anomalies that were coming in and we put all that that data together so it's been a bit of a long road here to get the actual holes drilled that that we as c3 metals uh wanted to see drilled when we started this but uh around the end of this year uh freeport of that 75 million will have about 7 million into the project and we will see um uh the burn rate will pick up drastically as we start that deep drilling um towards that earn in and we're we're really looking forward to seeing what we get we're primarily drilling under areas that we have holes that have ended in mineralization where we're in several respects that grade was improving as we were getting deeper so um we're hoping to plug into a boronite core of multiple porphyry systems with this next phase of drilling we should start seeing the first assays uh it would probably be late q1 because to drill one of these holes can take about six weeks and then and then we have um the assay turnaround time.

15:49So it would probably be the late first quarter, 2027, when we start getting those results back.

15:56Dan Symons: Speaking of expecting assays, I believe you're also expecting assays this quarter for your other project on Jamaica. That's the Old Pennant's Gold Mine. You also have a partner there as well too. Yeah, we do. So our partner there is the largest mineral 10-year-older in Jamaica. It's a private company called Geophysics Jamaica Limited. The owner and sole proprietor of that business is also a 5 % shareholder of C3 Metals. So he's our good partner, Robert Stewart. We entered into that agreement. It looked like we were sharing the same gold trend, where it looked like we had some of the extension of the old pennants mine and he had had the old pennants mine itself.

16:39So we just contributed about equal pieces of ground into a 50-50 joint venture. It's funded equally 50 % and then C3 Metals is the operator. We've just conducted after doing some surface work, geochem and geophysics, we've conducted the first phase program there. These are relatively shallow holes. So we did about 800 meters in five holes. And now we're basically testing the down dip extension below the old pennants pit, which was about 30 meters deep. What's interesting about Pennence was, although it only mined and produced 16 ,000 ounces over two years between 2002 and 2004, the historic reported resource grade was 20 grams per tonne, it's a very high grade.

17:29The historic drill depth averaged about 80 meters. We know that there's historic results below and outside the pit. And this program is to test that extension of that below the pit. So we're now waiting on assays. We should have them all back this quarter, most likely by the end of this month here in November. And we're really pausing now, waiting to see what those results are. And that'll guide the next phase of the program as we move into 2027.

17:58Dan Symons: Dan, is Jamaica supportive of mining? I bring it up. The island next door to Jamaica, Dominican Republic. Like, uh, it's been a bit of a tough time for, uh, the resource companies over there, notably Gold Quest and Barrick. Yeah, no, I, I, that's a good question. Geologically, it's very similar. Um, and you know, I can't, I can't comment to, to some of the individual challenges that companies have had in Dominican Republic, cause we're not operating there, but I can say Jamaica has been one of the easiest. And most supportive, uh, jurisdictions I've ever worked in my, my career that now is 21 years in the industry.

18:30And a big part of that is there's a very longstanding mining industry in Jamaica. I think a lot of people don't realize that bauxite mining, bauxite used to produce aluminum, is the number two industry in the country and has been for decades. 80 % of all exports out of Jamaica are minerals. The mining law has been in place since 1947. It's British law. between aggregate limes. There's a high-quality limestone product in Jamaica that's coveted between limestone quarry-type aggregate operations as well as the bauxite operations. There's over 150 open pits in Jamaica today. And unfortunately, the bauxite industry has been in decline now for several years where the ministry has informed us because it's not replacing its existing reserves for several years.

19:23I think there's about 18 years left of that industry. And that industry is, it's a very close second to tourism being number one as a revenue generator for the government through royalties and taxes, as well as it's the number two employer in the country. So it does become a pretty significant and scary economic proposition. If you're a country of around 3 million population with your second largest industry in terms of revenue generation to the government, as well as second largest employer in the country, it looks like it has potential to become extinct within two decades. So the ministry has been extremely supportive right up to the prime minister.

20:08and one of the mandates that's been given and that we're executing on is to try and promote and encourage investment in non-boxite metallic minerals as a means of diversifying the mining sector in Jamaica. So as the bauxite industry inevitably slows down and winds down as all deposits have a finite resource life to them, the goal is to be bringing on other minerals and our Our primary focus is copper and gold, and we hope to be part of that solution.

20:40Dan Symons: Lastly, Dan Simonson, I don't need to tell you, most junior companies will have a flagship, and then they'll have some additional assets and projects. Help us understand, help investors understand the way that they should view what is happening at C3. Again, you have your new project with some good-looking holes down in Peru, and then you have your two partner arrangements right now in Jamaica. What would you want investors as the key bullet points in terms of understanding the value proposition at C3? Yeah, that's a great question, Michael. Thanks for asking. You know, I think the way that we've tried to set up the business is we've had success.

21:17If you look at our board in management, we've had success with exploration companies through development, through operations. So as working for operating companies, as well as successful exploration companies, we understand what operating companies are looking for. And so when we approach a project, one, we understand the level of risk and exploration. This is a venture capital business. Essentially, it's very high risk, high reward. But the ones that are successful are usually extremely successful. And because these projects are still relatively early stage, you know, we take a portfolio approach instead of putting all our eggs into one basket.

21:55And essentially what we want to do with all projects is test low hanging fruit. and in the case of our Bell's Gate project where we brought in Freeport as a partner there, you know, we had tested the near-surface mineralization and the geology and the technical information was telling us drill deep holes and that changes the risk and financial profile of the capital required on that project. So instead of diluting shareholders at the corporate equity level and, you know, ending with a billion shares outstanding, we chose to limit corporate equity dilution and bring in a partner to fund that. We are diluting at the project level, but I think the size of the prize, if it comes together, will do very well with that one with a 25 % ownership if this comes together in the future.

22:44At Khaleesi right now, we're still testing that low-hanging fruit and drilling a lot of near-surface mineralization. So that's what we're doing and we believe in the portfolio approach and we think that it's fundable that that would be the one knock on companies to take this is well how do you fund it all and we think it makes sense at the right time to bring in partners and you know if we find something really special near surface good grade then we'll be a little greedy and we'll keep it all to ourselves for a while as we delineate that.

23:14Dan Symons: Dan Simons thanks to speak with Mining Stock Daily. Thanks, Michael. Appreciate your time.