District Metals Confirms Its Exploration Model Ahead of Viken Drilling

0:16Mining Stock Daily: All right, everybody, moving right along here. We're actually going to head up to Sweden with District Metals. They do trade on the Venture Exchange with DMX and on the OTCQX with DMXCF. A couple things of note here. We have some expiration work to get commentary from, from CEO Mr. Garrett Ainsworth. And then overnight, it finally comes conclusion of the federal election that has been taking place. That's been a drawn out saga, but we have some clarity there as well. Garrett, good to see you. It's been a long time. And let's do start with the exploration work with the latest, actually some drill results, not from VEACAN, but you did confirm some of those mobile MT geophysical anomalies intersecting more black shale.

1:05Mining Stock Daily: So walk us through this strategy, what you found, and really how this continues to open up the district playbook. Hi, Trevor. Great to be on with you as always. And yes, so we flew this mobile MT geophysical survey last year on the VEcon property. It lined up nicely with our VEcon deposit. So we went ahead and flew it across the whole VEcon property and then also all the Lumbshell properties at that time. And this has never been done in Sweden for Lumbshells because it's a fairly new technology. I believe it came out in 2017 or 2019. And then we finally got to bring out the truth machine and drill tests on the alum shale properties.

1:54And we hit 15 out of 15 holes, returned graphitic black shale, varying in total composite downhole depths of anywhere from, I think like 50 meters up to like 140 meters. So it was a technical success. there's some radioactivity associated with some of those graphitic black shells we have no idea what the geochemical results will be uh so that that will obviously be very very important um i'd say the the radioactivity results were anywhere from background to weekly radioactive and uh and we should get the geochemical results back hopefully late late october so maybe we were able to get the the news release out on on the drill results from malgomey and uh australian which are the lum shell properties we drilled out in in november so it's uh yeah i think it was it was really well executed and maybe i'll also talk about we lost three holes and uh it uh that was very interesting so the three holes we lost um we're we're drilling in kind of a lower area it It was a little bit soggy.

3:09And all that we got was black return water, which kind of indicated that we were drilling into graphitic black shales. And so I think when the core tube came up, there was no recovery whatsoever. And we went down like 16, 20 feet or meters, 16, 20 meters, and there was no core recovery. So we need to go back there. at some point and use a triple tube or use larger diameter so that we can get recoveries. But I think that's actually, it really speaks to how friable these graphitic black shales are and potentially amenable to shovel and truck type open pit mining, which is obviously very good on your OPEX costs.

4:00But it was pretty interesting to see that kind of result that we couldn't even recover it in three holes.

4:13Mining Stock Daily: Was it just because of the drill basically grinding everything? Grinding and the water washes away. It basically turns it into a mud. Oh, interesting. Okay, so I'm pretty interested in this. I mean, you're using diamond core here. I mean, this stuff is very brittle here, Garrett. I mean, how effective is the diamond? Would it be more conducive to do RC, or is it just too brittle for RC? I think the problem with RC is that if it is wet, you're very limited to depth. So, and in parts of Sweden and parts of the properties, it is quite wet. And with the alum shells, sometimes they're underneath swamps.

5:01I mean, we wouldn't get to those areas unless it was the wintertime and it was frozen. But a lot of the drill holes we drilled were right on the edge of swamps and right into the heart of the best conductive parts of the mobile MT anomalies. And we hit exactly what we were targeting, graffitic black shells. The next big question is, are they mineralized with potentially economic values of uranium and vanadium and potash? But what the Mobile MT geophysical survey does, very importantly, it actually uses lightning strikes from around the world. So you get a very weak current that comes from beneath the alum shells coming up.

5:50So it, it, and it provides you with three dimensional view of the conductive material. And that's actually what allows us to see the depth of the, the graphitic black shells and the potential thickness as well, which is important. So when you fly something like a VTEM where you're inducing a current and you're basically creating like a charge and these graphitic conductors are so conductive that those systems like a VTEM or a SkyTEM quite often would get overwhelmed by the conductivity. So you need to use something that's got a bit lower of a charge from lightning strikes around the world and multiple frequencies.

6:39And this really did work. But it's a newer technology. And we did forward modeling with our geophysical consultant. And it showed that it should work. And then we did it. And it did work. And then we drilled it. And we confirmed it. So it's great to see that.

6:54Mining Stock Daily: But we are awaiting, you know, the final assay data from those. Yes. Yeah. And actually what this does, so hitting the graphtic black shells at Malgobai and Ostracallon gets me even more excited for VEcon. Because at VEcon, we know that the alum shells there are mineralized. So target areas A and B all of a sudden get upgraded even more. And we plan on drilling at Deacon, hopefully starting in the beginning of October. Okay. All right. So just weeks away here, a couple of weeks away here, Garrett, what does that drill program kind of look like if we, you know, over the Q4? So it's, yeah, when we start drilling, it's going to hopefully continue till December.

7:43We're going to drill as many meters as we can. You know, the point here is not to go as fast as you can. it's to do it as environmentally responsible as you can. We capture all the drill cuttings and then we analyze the drill cuttings and they're always kind of below, so far, they're below the limits to what's classified. It doesn't go as hazardous waste, which would not be expected from a lump shells. You might expect that from drill cuttings that you find in the Athabasca Basin when you're drilling through 20 % uranium, But yeah, the plan is we're just going to start drilling at VEcon and continue until as far as we can towards Christmas.

8:28And so hopefully we can do 2 ,000 meters, maybe 3 ,000 meters of drilling at VEcon. And yeah, we might even, we'll see how the drilling goes, what the results are. But we might even start just doing 300 meter step outs, which is all you need to start putting together an inferred mineral resource.

8:50Mining Stock Daily: Okay. Very good. All right. So we're going to start seeing that kickoff here shortly. And then obviously it sounds like some of those results, I mean, the winter is going to be occupied with results here from that program. Obviously, you're obviously waiting for the results here from Osterkall and Malcomaj. Yes, correct. Yep, yep. It's been a long time since we've seen drill results out from District Metals Care. That's pretty exciting, actually. It has. It has indeed. All right. All right. Listen, we do need to touch base here. Listen, I live vicariously learning about Swedish politics through you and our conversations.

9:25Mining Stock Daily: There has been an election, and I mentioned the beginning of the conversation. We have gotten some clarity. Your market is reacting to this. Center-left opposition has kind of come out and won this election. I think I just got news that the prime minister of Sweden is stepping down after the election. So this is an ongoing, you know, ever evolving story in politics that every political story is. But what do we know here? Does this, how much does this affect not only a company like District Metals, but resource development and exploration in the country of Sweden? Well, I mean, everything's kind of up in the air right now.

10:08It was a very close election. I believe the opposition being the left center block or the central left block, they got 176 seats and the government got 173. So that's kind of where the standing is. But the big question mark here is, you know, within the center left block, the center party and the left party do not agree to forming coalition, especially the center party. They said that they will never form coalition with the left party. But mind you, politicians can say one thing and do another thing. We've seen that before. And I should mention, I'm not a political commentator. I'm a geologist.

10:54I get all of my information from our consultants and from reading the Swedish news. So it's, you know, I don't want to be too speculative on what I'm saying, but we really don't know what government is going to form. But it looks like it's very challenging for the center-left block to form a coalition because they don't get along, the two parties in particular. So, I mean, something could happen, like maybe one of the parties in the right block comes in and joins. There's going to be a lot of negotiations over the next while. there's going to be, yeah, I'm sure it's going to be a very challenging time.

11:39And if they can't figure it out, or if they can't agree also on the prime minister to lead the country, then it could go to a snap election is another thing. But one thing to keep in mind with politics in Sweden is that I believe the social democrats who are part of the center left block, they've been in power for the majority of time in Sweden. And so they've been a big part of building Sweden as a mining nation. And they're pro-mining, they're pro-nuclear, and they've gone on record saying they're supportive of mining uranium as a byproduct. But again, all of that can change. Like politicians say one thing and they can do another thing.

12:27But big picture, you know, We've got the VEKAN deposit with an NPV after tax of$2.9 billion. If it was to go into operation, it would cover all of Sweden's uranium requirements for its existing nuclear reactors. The big picture here is that Sweden and the EU, they need a secure domestic supply of things like uranium, vanadium, potash, and an alum shell deposit like the VEKAN deposit could deliver that, that has not changed. So we'll see what happens politically. And when it does get sorted out, we'll be ready to go meet the new politicians that are in power and build relationships from there on.

13:16Mining Stock Daily: All right. Well, I know you're not a political pundit, but you do a very good job of putting the lay of the land out there here, especially the land of Sweden and politics. I've learned just more than I actually ever cared to know about Swedish politics. But it's very important, obviously. So we'll continue to continue to watch this space, not only on the government side and how this evolves, but also a lot of drill results coming down the pipeline from your portfolio with Fiken, Östergall, and Malgömar. So it's going to be an exciting winter for you all. Nothing but the best. And I hope everybody stays safe as things continue to go there.

13:53Mining Stock Daily: We'll touch base probably. I'll see you later this fall, probably maybe in the next couple of weeks. Absolutely. That sounds great. Thanks, Trevor. Yeah. Thanks, Garrett. All right. That's District Metals, everybody, trading on the venture of DMX on the NASDAQ First North, the DMXSC SDB, and on the OTCQX with DMXCF. Stay tuned. We got more coming your way. The information presented should not be considered investment advice. Mining Stock Daily Yen's 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.