Collective's Apollo Starts at 5.4Moz—and Ari Sussman Says It Will Get Bigger

0:16Ari Sussman: All right, everybody, welcome back in to Mining Stock Daily, kicking off this Thursday's corporate updates with the big one, much anticipated maiden resource estimate for the Apollo deposit from collective mining did hit the tape yesterday and so we're going to get a corporate update here from executive chairman mr ari sussman ari uh it's always nice to do actually i appreciate doing these uh updates after a big news release big numbers 24 hours after the fact gets you know everybody kind of a day to digest everything see what the initial market reaction was. But needless to say, 5.4 million ounces gold equivalent.

0:57Ari Sussman: Let's take that 30 ,000-foot view of this resource with your comments first, and then we'll kind of dive into the niche. Well, look, so separately, because I'm obliged to follow 43-101 rules, we announced 2.5 million gold equivalent ounces in the indicated category at 2.17 grams per ton overall and 2.83 million ounces gold equivalent at 1.83 grams per ton uh in the inferred category okay you the takeaways of what was in our view amazing about this this estimate is is is a couple fold one is there is a far more robust open pit than we ever envisioned ourselves okay so there were 2.2 million ounces of gold um in the open pit in all categories of that one and a half million ounces approximately in the indicated category at 2.06 grams per ton and then the balance of that is 700-ish thousand ounces in the inferred category at a lower grade the we're talking the pit okay so the big surprise besides how good the grade is well i guess that this is the high grade of the pit isn't a surprise and this was done at a 0.3 grams per ton gold equivalent cutoff is the strip ratio okay very low came in 3.4 to 1 and i will iterate a key point okay we announced in the press release something called the shallow halo zone so this is the zone of rock surrounding the bracha shallow okay and i can tell you that that strip ratio although low if we keep the open pit dimensions the same in future resource updates that will be the highest strip ratio we will ever report okay because we have hit in drilling holes subsequent to the resource that have been announced in that outer halo of the pit that have grade.

3:10And we showed image with a whole series of visuals that we're expecting assays for in that outer halo that appear visually to have enough grade that I suspect all of those visual intercepts will be above a 0.3 cutoff. So the pit's going to grow and its strip's going to reduce. And the key metric for people to look at in open pits, what seems to be a forgotten order in our industry is the residual grade which is you take the grade of a pit divide it by the stripping ratio and that remaining grade is what the actual grade is of your pit okay this seems to be forgotten because remember you need to mine all of that pit right you don't just mine the areas with gold or with whatever metal you have so we look really good on a residual grade basis, and it's going to get better.

4:07Okay. And that's good for your audience to remember, look at the strip ratio and divide the grade by the strip to get the actual residual grade. Okay. That's section one. Section two is we're moving down vertically with this resource is the area that is below the pit. So underground mining, but above ramp. So doesn't include the high-grade ramp zone. And that also came in nicely. You know, it's kind of our lower-grade section of the deposit, but we still announced and indicated 2.1 grams per ton for 700 ,000 ounces and an inferred 2.06 grams per ton gold equivalent for just under a million additional ounces.

4:56You might say, well, that's just over two grams. Is that low for underground? Right. And, and the answer is, depends on how you plan on mining this. Okay. So in a resource, you put a mine plan on it, what they call RPEEE, reasonable prospect for economic extraction. Okay. That's a rule under 43-101. And we designed for sub-level open stoping. So that is a bulk underground mining method. Lots of those types of mines out there. Most recently in the news was El Dorado announced they started producing at Scurius in Greece, right? Just as a comp, the cutoff grade for sub-level open stoping underground in Greece for them is 0.7 grams per ton.

5:43So at over two grams grade, you have a very wide margin. And then the next, well, the big surprise outside of the pit, I would say was ramp. So I'm going to be honest, when we went through this exercise, I didn't know how much ramp we would get into this resource because of the lack of drilling. Like ramp is a relatively new discovery, as you know, and your listeners know. And we announced mainly in inferred, obviously it's deeper, right, to access it from surface with drilling. But we announced over a million ounces, just over a million ounces in inferred at 5.37 grams per ton and a couple hundred thousand ounces and indicated 4.74 grams per ton.

6:23So that is a really, really good start. Okay. So in total, as you mentioned, I won't say the number, but there was north of 5 million ounces of metal in the estimate. And as we were talking before the call started, I will reiterate this point. Show me another company with a structurally controlled system that announced a maiden resource at north of 5 million ounces gold equivalent or gold. I don't think you can find one. This is a really big start. And as I'm sure we'll talk about the upside in a minute. Yeah.

7:01Ari Sussman: You know, I think the open pit surprised me as a shareholder, if I might say the open pit size surprised me because for the last couple, maybe year or two, Ari, you and I have talked about, excuse me, a small open pit. I don't know if 22 million tons have indicated it's small, maybe the size now. that's a surprise. I also was also surprised with the numbers within RAMP. I didn't actually think RAMP would hit that much into this resource. I was kind of thinking we'd see more drilling, maybe in another iteration of an updated resource, RAMP would really shine. And maybe that's still the case. So that surprised me as well.

7:43Ari Sussman: But I do want to talk about the mineralization here within the resource, out of that 5.4 million ounces gold equivalent, it's a bit over 4 million ounces of gold. And obviously, we talked about the polymetallic nature of the silver, copper, and tungsten. And I think there's a lot of questions about, can you hang your hat on potential payables of the copper and the tungsten in there with what you know now? I wonder if you can kind of shine a light on that polymetallic nature and how it kind of dives into the equivalent factor of this resource? It's a good question, Trevor. And the answer is resounding yes.

8:22So here's the interesting part. If you take the indicated portion of the open pit, okay, so about a million and a half ounces, roughly half is gold and the other half is a combination of silver tungsten and copper so with regards to the critical minerals especially tungsten and copper virtually all of it sits within the pit and will come out early metallurgically it's a cinch this this mine will have a dual circuit so when you have copper or tungsten let's start copper first above the cutoff grade that you believe you can produce an economic concentrate. You will put that through flotation. We have all chalcopyrate.

9:10It loves to float. And I know from test work that we will create a copper concentrate at up to 25 % with very high precious metal credits along with it. The tungsten is even easier because it's so coarse. You run it through the gravity circuit up front. You separate tungsten initially. Okay. So it goes to its own pile just from gravity. And then you run it through its own mini circuit, right, which involves flotation. So it will have a dedicated, small, inexpensive circuit to produce tungsten trioxide from that she light. And that will be relatively easy. And again, it's localized. There are new zones we're finding.

9:50We showed in the conference call we hosted yesterday that there's hits within the pit deeper where there's a couple of hits of tungsten with high grade that are not in the resource estimate, including one hole that we hit 27 meters at almost 1.7 % tungsten and over 11 grams gold, not in the resource estimate. It was post. That could be a new zone forming, but for the upper zone, that will come out easily and we will get those payables. There's no problem. We're really blessed with good metallurgy here. That is the luck of the draw, as you know, and it just worked out fantastic for us.

10:27Ari Sussman: Yeah, very good. Okay. what's interesting about this MRE it's not just a resource update Ari I mean you are kind of hinting and laying the groundwork for a potential mine plan strategy here it's not only through the press release but the communications you had in the webinar you and the company hosted yesterday so it's almost like you're continuing to add a little bit more than just the numbers but you also, I think some of the blue sky potential here, there was like, what, 40 kilometers of drilling not put into this resource, that cutoff time. Can you kind of describe to us, you know, what that cutoff date was for these numbers that are represented today?

11:11Ari Sussman: And, you know, if you can maybe editorialize a little bit, were those numbers improve with the drilling you do know between now and what was that cutoff in March? Okay. So I'm going to answer your questions or your comments in backwards order. Let's start with the upside. So there was 114 ,500 meters of drilling that went into the Apollo Mineral Resource. Okay. And the cutoff date was March 31st. There has been north of 40 ,000 more meters drilled since then. Okay. Upside. Okay. So the open pit, I mentioned the shallow halo zone. Okay. We have three of our 13 diamond drill rigs focused on that now lots of news to come from that imminently the section above ramp but below the pit okay we we showed a plan view and a section view and where the indicated inferred is and within the breccia body there's tons of open space okay that just did not have enough drilling density to potentially qualify for inferred or a higher category of mineral resource that drilling is is starting to happen now we recently like last week i think it was tuesday of a week ago announced and they will be called the northern breccia extension so that's in that mining zone that underground but future mining zone above ramp where we found a hundred meter extension to the actual breccia body at about 1.1 kilometers below surface and the highlight intercept into that was 141 meters at almost five grams per ton with a significantly higher grade, including within that.

12:55So that's all growth, not in the resource. Okay. Ramp is really the one that is, has me the most excited and I'm sure our shareholders. So we showed a section, a plan view, I apologize, of ramp where we project the size of the breccia body, you know, at the ramp depth at about a couple meters below the top of ramp. Okay. And the, and the circumference is roughly 1.5 kilometers or 1 ,500 meters. Okay. The blocks that made the mineral resource estimate only covered 315 meters of that 1 ,500 meters circumference. We have drill holes on the west side with assays that have been announced publicly uh that show it exists on the west side and what we showed everyone was that we have visual hits loosely almost enclosing that entire circumference with hits of visible gold and other things of the like you know we're waiting assays so you know only 21 percent of the lateral circumference of the projection of the bretcher qualified for resource then we look at ramp vertically the deepest hole from the top of ramp that qualified for the mineral resource was 350 meters below the top okay so that was the deepest single intercept to the bottom of the resource we have visual hit apc 171 dash d3 drill hole that if there's a hit of visible gold deeper if it hits with when we get the assays it becomes back positive that will double the potential vertical extent of ramp with one single hole, right?

14:37We'll take it from 350 meters to the bottom of the resource down to 700 meters. So this thing's going to grow and grow rapidly. You know, we have a total of 13 rigs. Three are doing shallow drilling. Two are on trap. One is drilling new targets. So that is six. That means that seven rigs are focused on ramp as we speak. I think this is going to grow and grow rapidly. Okay. Coming back to your early part of your question, I answered a lot of people who called me on this yesterday. Why did you come out with your resource so early? You said originally it was going to be H2 2027. Why was it now? The answer is simple.

15:14Let's take advantage of the new government in Colombia, which has been in power for approximately a month. We announced, we accelerated this maiden resource so that we can start the process to file for licensing for this mine. We expect to submit those applications in the middle of 2027, so roughly approximately one year from today. And the timeline to get an answer on that in Columbia is about one year. So that means if all goes well, we could be a permitted licensed project for construction by the middle of 2028. there is no other company that i am aware of in our peer group or our snack bracket that could deliver licensing in that timeline if we do deliver it in that timeline it means in theory that there could be a producing mine here sometime late 2030 or maybe early 2031 that is very fast and that is why we've decided to accelerate the mineral resource this is a good resource there was a lot of disclosure uh in the release more than you see for most companies and the mine plan that was used to calculate rp triple e or reasonable prospect of economic extraction was roughly in line with how we envision mining this right so we didn't cherry pick it by putting a selective mining method in so we could boost the grade We actually put together a mine plan that hopefully will represent the grade roughly of what a formal plan will look like in future economic studies.

16:51Trevor, the path going forward from here. So licensing is a separate path from 43-101 that gets submitted mid next year. We will come out late 27, early 28 with another resource update and a PEA to follow that immediately. and in late 2028, early 2029, we'll have a feasibility study with an additional resource update at that time done. And that will be the basis with the licensing to go finance the bloody mine and build or sell or whatever it ends up turning into.

17:26Ari Sussman: Well, you just about answered, I think about three of my follow-up questions, but I think it is worthy to note for listeners who maybe didn't listen to the call yesterday. You did basically say that these numbers are foundationary. They are not going to be the numbers that feed a PEA. There will be an updated resource in the timeline you just described. But that PEA, you also anticipate will be to PFS level type of work, right? And we're already starting to see, like I said, the groundwork for a potential mine, what Guayabalas and specifically Apollo looks like. And part of that, Ned came on yesterday and he talked about, Ned Julel, I think is his last name.

18:13Ari Sussman: Pardon me if I'm mispronouncing that. Yes. He talked about blending the pit and ramp to a three gram head grade and north of 400 ,000 ounces a year. So there's really a lot of focus on ramp. And I just want to maybe, is that the continued success at RAMP with the drill bit and the added to RAMP, I mean, that is a crucial point of development for Apollo going forward. If we look at one thing out of collective for the next 18 months, is that continued exploration at RAMP going to be the most critical? yes it's an exploration added because we'll only be doing exploration from it now but when we get licensed we will make that larger and we will continue it to apollo and the the vision is to build a 15 000 ton per day mill and having it fed in the early mine life by a combination of the open pit and ramp okay so if ned's projection of three grams per ton is correct at 15 000 tons per day put metallurgical recoveries on it okay on on on the on that grade or on the what you would get out and you're you're getting close to almost 500 000 ounces per year in the early mine life years obviously we need to find more mineral at ramp and that's what the drilling is focused on if that circumference of the breccia comes in which i believe it will okay how many ounces i don't know but a lot more than we have today a lot more and it grows vertically which i am confident it will visuals are showing that already um you know that's going to be very very exciting for for this mine and it will be it will be a big one let's just put some comparison to it so our next door neighbor is eris mining who is looks to be actually on schedule to to cut the ribbon so to speak on their new mine later this year and start ramping up from there.

20:17They're built to 5 ,000 ton per day mill, and they're projecting a couple hundred thousand ounces of production from reserves that are roughly, you know, 2.6 grams per ton. Okay. Why did they not build 15 ,000 tons? Because their system isn't as bulky as ours. So they are mining or proposing to mine underground with a method called long hole stoping right long hole open stoping we're doing sub-level open stoping which is far bulkier so we plan to do it so we'll be able to feed a mill plus having a pit helps but feed a mill okay at three times the size okay as eris mining so you get the point right there's going to be a big mine the other the other thing backing up to that exploration at it as it is right now is we're going to be drilling trap very soon.

21:12I can't give anybody a projection of what I think will happen to trap for sure because it needs a lot of drilling. It's early days. But I do believe, I think we have enough evidence that there's a legitimate chance that we will find another mining front of some sort at trap. Okay, and that is not obviously in our thinking at this point. But imagine if we do, even if it's 50 ,000 ounces a year. right? Could be a hundred thousand ounces. I don't know. Add that to the capacity and you get the point of this is going to be a really, really big project. Uh, one of the better gold equivalent mines, I guess we can call it out there with a nice critical mineral component that will come out right at the front, you know, of the mine life for the project.

22:01Yeah.

22:01Ari Sussman: Very good. Last question here, Ari. The market reaction was what the market reaction was yesterday. I'm just kind of curious what you heard from your institutions, the big boys that have invested into the company. Any sort of words, feedback from them that you gained, or was it mainly a lot of retail that was really kind of pounding the table with commentary? I think the comments were is that I had guided when the plan was to release the resource initially in the second half of 2027, I guided to 5 to 7 million ounces. And so when it came out at the 5.4 that you mentioned, that seemed light, but people were forgetting that we've come out a year earlier.

22:51I have all the confidence in the world that this will grow to north of 7 million ounces for the next update. right i don't think that's for my view is going to be very difficult um so so that that disappointed people maybe the grade you know in the middle mining zone slightly disappointed people i heard that and then and then there was a little bit of confusion because if you take the global resource grade averages and you just say oh look at the copper grade and look at the tungsten grade it's too low right to extract but what's missing is the nuance that they sit in an area where the grade where it's localized and they'll have their own circuits from that much higher grade area the rest of the deposit won't have tungsten or copper so it's got blended because that's how you do resources versus separate it out specifically and that may have confused people a little bit but look i think it was just simply buy on mystery sell on history in my career i've always seen companies announce It's mineral resource estimates that meet expectations and the stock go down.

23:54It becomes a selling event. I think that's it. But very soon, I suspect that people will understand that of all our peer groups, I don't know one that has better upside than this and tangible real upside with already drill holes into it and visuals and plus assays. And so I think that we'll move well past this little mini correction and look forward to the aggressive growth curve that we're on in terms of resource growth.

24:22Ari Sussman: How about you personally and professionally? Did you learn anything in the last 24 hours, Ari? Anything that maybe surprised you that you didn't know before? I sadly have enough experience that, you know, I didn't get surprised by the reaction. I actually expected that reaction. I warned my team about it about two months ago, you know, that, you know, I've always said to the team, a mineral resource estimate, the best case scenario is you're neutral from a share price perspective on that day. Unless you're a company that sandbagged the whole street for two years saying, hey, it's going to be 2 million ounces and then you come out five.

24:54Oh, OK, you'd rip higher. Right. But then that mean you that all that time you were sandbagging, your valuation would have been trading too cheaply and your financing dilution costs would have been too excessive in that interim. So that is not a good strategy. So I warned the team, you know, what I expected, you know, I mean, I didn't know. I didn't have a percentage drop. You know, we've underperformed. But look, I can tell, we know that there's going to be a bevy of positive drilling results coming out and fast and furious, you know, starting as soon as hopefully next week. and so we'll rebuild and people will get the view, we'll understand the view again very quickly that this thing is going to get a lot larger than the resource we announced yesterday, which already is one of the bigger ones in the gold space that is out there, right, today.

25:47Yeah, yeah.

25:48Ari Sussman: 13 drill rigs, ongoing, working. There's going to be a lot of updates coming here for the rest of the year. Ari, thorough conversation, but it needed to be a lot of questions out there. Thanks for sharing that insight with us and our listeners here at MSD. Always a pleasure to chat with you. And yeah, we'll do it again here in the next couple of weeks. Looking forward to it, Trevor, and see you soon in Colorado, I believe. Yep, absolutely. All right, Collective Mining trades on the TSX and the NASDAQ with the symbol CNL. We've got more updates coming your way, so stay tuned. The information presented should not be considered investment advice.

26:29Ari Sussman: Mining Stock Daily and its affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein. Please do your own research or speak with a licensed financial representative before making any investment decisions.