Gilbert Clark Provided a Tutorial on Blister Copper and Why it Matters for Cabaçal

0:17Mining Stock Daily: All right, everybody, welcome back into Mining Stock Daily. Listen, the one thing I've always loved about the mining and exploration sector is that I'm a continuous student of mining. of this industry. There's always something I need to learn or is thrown out in front of me that I just do not know or I've never seen before. And even after 10 years, it still surprises me when that hits. But last week, we got news from Meridian Mining announcing blister copper smelter returns from the Cabasol project. I don't know what blister copper is. So we got to hammer this down here with CEO Gilbert Clark once again.

1:00Mining Stock Daily: Gilbert, what the is blister copper? Talk to me like I'm five. Well, hi, Drev. Good to be on the show as always and happy to continue to be part of it. I think before we say what it is, you've got to ask yourself, why do you do it? And that's your first question to the investor. Why did you do this? well i would say 99.99 of the junior market retail in some institutional guys have never seen a pr like this and the reason you do it is you everyone's got a copper mine and as i've said many times across the years if you don't have good metallurgy you don't have good cash flow just doesn't work. And one of the key things with any copper concentrate, copper sulfide concentrate, is when it goes to the smelter, if it's got impurities, you're going to get a discounted price.

2:05If it, you know, just dirty copper concentrates, you're going to get smashed. They're going to make deductibles. They're going to say, well, this is going to hurt the internal or kiln bricks of the smelter. So over these years, Trevor, we've always talked about how clean the mineralisation is at Cabasell. You can drum this into our investors and it's gone into all of our, the PEA, the Premier Feasibility Study, and now it's shortly the DFS. So what we wanted to show, and this leads into the ongoing project finance discussions in relation to offtake, is not only do we produce one of the cleanest copper concentrates coming to the market with incredibly high precious metal credits, gold and silver, that when you convert this sulfide concentrate into your first step to producing anodes and cathodes, is that when you smelt it, when you melt it down, and you produce that basic copper mat, okay, then you blow air through it, air and oxygen, and that burns away some of the iron and excess sulfur, and you pour that out, and you produce a blister copper, and you can then analyze that.

3:30And within that blister copper, you can say, okay, there's no impurities. Generally, it's somewhere around 90 % for a blister copper, plus or minus. Ours is, what is it? It was, I think, 98.9 % from blister copper. So that means we're going to produce, when you convert that into an anode, be it for flash melt or so forth, it's going to be incredibly high quality, very pure. Most importantly, in our sulfide concentrate, there's nothing like fluorine or large quantities of penalty elements. So what we telegraphed to the investor or to the end consumer is that shortly a very high quality copper concentrate is coming onto the market and if you've got long-term supply contracts with low sulfur concentrates or with very impure copper concentrates, you can buy meridians contract to buy millions copper concentrate blend it either resell it or use it yourself at the smelter but you then got something that can make the minimum grade potentially even a very good grade smelter feed for decades to come and that's the key message from this.

4:51So often you'll see a junior company they just don't do this because fundamentally copper concentrate is trash. but ours is premium. Meridian's Cavasol project produces a premium copper concentrate.

5:04Mining Stock Daily: It all sounds very impressive. I mean, the title high-grade blister copper itself is impressive, but it sounds like it does materially reduce technical risk heading into the DFS, but also improves your commercial confidence. Is that really kind of the gist of this whole thing? Is that what this has done, this test work has done? I wouldn't, I would say that what it's done, it's confirmed all of the historical data and correspondence on how well, how well this concentrate performed when it was produced back in the 1980s from the caposal mine. and when you look at the commerciality of that, say there's a copper concentrate out there and it's just, you know, low...

5:54Sulfur, okay, everyone talks about sulfur. You need sulfur. You need the fuel in the furnace and the byproduct of that furnace is acid, sulfuric acid. So we can say now that if you've got a Western, even the Chinese smelters, you've got very strict emission standards. The quality of this concentrate can be mixed with another concentrate that has poor emission standards. Mix it and you make the minimum cutoff. So for desorability, commerciality, what we wanted to do is confirm when we go into these offtake agreements and project finance discussions that this is a readily, very easy to sell copper concentrate.

6:40Mining Stock Daily: Do those offtake agreements kind of come in hand with some sort of written agreement or MOU prior to the DFS here, Gilbert? Is that something that the company needs to tackle? the offtake agreement yeah it's kind of curious sometimes it's better to do your offtake agreement closer to production because that's when it's worth more uh some project finances actually want you to have the offtake agreement as part of the financial package um what we have in the benefit for our shareholders and and potential shareholders this gives us the flexibility to decide how we're going to do it. We've had some great supporters who've been very interested in the offtake.

7:28They actually are shareholders of the company on the basis of wanting to be at the table for discussion when it comes. And Lori said, if you've got no equity in the company, I've got no interest to discuss offtake. You know, if they don't like that, deal with it. You know, they can go pound sand. And when we go to the next stage of commercial discussions, it's always going to be the most optimal off-date discussion in the interest of the shareholders and their equity. Because as always, the executive of this company is where the stewards of our shareholders' equity. So we have to get the best deal out of it.

8:11And it's always good to put some news into the market a few weeks prior to when we have to have the final discussion so the offtake groups, the smelter groups can sharpen their pencil.

8:23Mining Stock Daily: So the last time you and I spoke here, Gilbert, I think it was back mid-June, you had mentioned that meetings had begun with banks and potential project finance groups for that final investment decision for Cabasol. But with these new blistered copper results, the smelter test results, does that meaningfully change those finance conversations further down the road here? It gives confidence to the lenders that there's going to be no problem to sell the product, which is always very key for any discussion. So we can say, look,

9:09you know, if you look back at what we've done over the years, it's always about building the mine, getting production, creating a big deal company. This focus has never changed. So what we're able to do now is, look, we produce concentrate samples. We've actually produced concentrate samples and we send them out to various groups to analyze. And they've replicated our own data. And now we've got samples of the blister copper that we can send out to various people, groups who are interested. And they can then say, yeah, we confirm everything. And the ability is that then allows us, when we have discussions with the offtake, the project finance groups, the plethora that are there today, that they know that we're quite advanced in that commercial obligation, which is so important.

9:56But when we look at the overall picture of commerciality, we go to project finance, the net free cash flow, which is going to come from selling these concentrates, is so significant as outlined in the PFS and the resource tail that goes with that, which is the amount of resource remaining after you paid off your project finance. Capital sales just got such strong commercial fundamentals and resource fundamentals that negotiations can be made and anyone who's in project finance can look at these basic criteria and say, well, this is readily financeable. Okay.

10:43Mining Stock Daily: Does this latest round of processing recovery results here, Gilbert, fundamentally change any of the technicals of Cobasol? Does it change anything heading big changes from the PFS to what will be that definitive and final feasibility study? The only change in the flow sheet from the PFS to the DFS is that we actually looked at the coarse gold. And again, tests that junior companies generally don't do is we looked at the front. We made DORI and then we looked at the refining characteristics of that. And the DORI had neutral source in the gravity circuit and had elevated copper in it. It can be a problem for refining.

11:27We could just sell the coarse gold. So what we're going to do in the DFS, definitive feasibility flow sheet, is we're actually going to recirculate that coarse gold from the cyclones into the copper concentrate. So we'll have a copper concentrate, could be anywhere from 15 to 2 ounces of gold, 3, 4, 5 ounces of silver, 33, 34 % sulfur, 30 % copper plus iron. so that means that that's the only real change that I can see between the PFS and the DFS and the flow sheet as we've outlined in the resource report from January this year we've actually got higher recoveries of the payable metals without sacrificing the grade of the concentrate so that's a wonderful attribute it is every step is is generating tremendously positive results and the simplicity of bringing this tremendous VMS deposit back into production.

12:34Mining Stock Daily: Yeah. Well, obviously, Cabasol is really the gatekeeper for the entire belt. A lot of work is continuing to happen on the ground with the Santolina deposit, and then obviously a lot of exploration targets throughout the belt under Meridian's portfolio as well, Gilbert. So it really, it just kind of seems like Cabosol continues to be unleashed, you know, unlocked a little bit more and more almost every quarter on quarter anymore. And that really can just really open up the entire belt. Now, I know a lot of the mineralization, Santillin is a little bit different, differently mineralized than Cabosol, but it does definitely kind of, you know, unlock the whole thing.

13:14Mining Stock Daily: So it's pretty fascinating to watch here. So if you do go out and make new discoveries, you really have a playbook here to continue those developments, right? Well, that was what was so important about those recent, quite interesting intercepts and one discovery that we had down in around St. Helena. Because we're permitting St. Helena as the second hub. So all going well, we would have in a few short quarters, we could have over 5.7 million tons of through capacity just in the belt itself. and that is what VMS projects are all about. It's not just one deposit, it's pods a deposit. And over the last few years, you know, the capital markets have been tough.

13:59We didn't blow out our treasury because we had to execute the capital sale agreement. But now with a strong treasury, we've got over, gosh, over 90 million US dollars in the bank. tremendous support now from the London and the Toronto stock markets. We can actually allocate increased exploration expenditure to start going after these other zones of prospectivity because you have to make the transition from being an explorer to developer to be a producer. But as soon as you go into that development producer stage, you're in resource replacement mode. Not exploration. You have to find replacement resources.

14:45Mining Stock Daily: All right, Gilbert. I mean, a ton has been accomplished here the last, you know, not only six months, but the last 18 months. So if you look at Cobasol, where it's at today, things that continue to move forward, the permitting, engineering, long lead equipment. Obviously, we talked about the financing discussions ongoing and now new, really important smelter testing. But what remains that biggest technical or execution risk that investors should be watching over the last half of 2026? Well, really what we want to do now to grow and take us into production is to start the preparation of training up the team that will go on to operate, to help build and to operate the mine.

15:32And we're incorporating a technical college in Matagrosso to actually train people, local people, create that local employment. Um, that's been helped by a group called FIMETA. That's the Federation of Industrial Development for Matagoros, so a great group. They do this for a number of companies, particularly mining companies. Um, and then actually the preparation of the civil works. We just recently authorized the expenditure to upgrade the bridges and the roads. Um, so look, it's, it's going to be really interesting. We've still got a massive amount of news flow to come out for the rest of the year.

16:08Of course, the DFS is going to be one of them. But I just think a lot of the decisions that we're discussing today and the events that will happen tomorrow and the next six months, these are really based on decisions that the executive made, you know, two, three, four years ago. So it's always about mining. When you deploy capital in mining, it's like a giant elephant. You've got to point it in one direction and you let it rip Because once that elephant starts running, you cannot stop it and you can't change direction. But it becomes a tremendous opportunity.

16:45Mining Stock Daily: Gilbert, good to connect with you once again. It's been too long. We've missed you. Everybody's kind of been on summer doldrum vacation mode here, it seems like, in the last couple of weeks. But things will be picking up here more frequently. You did mention a lot of news coming down from the company here throughout the fall. So we'll be touching base with you more frequently, I promise. Meridian Mining trades on the LSE and the TSX with the symbol MNO and on the OTCQX with MRRDF. Gilbert, good to see you once again. Take care, my friend. Thanks, Trevor. And if anyone's got any queries, just info at meridianmining.net.br.

17:22It comes to me and I'm always happy to respond. Thanks, Trevor.

17:26Mining Stock Daily: Thank you. 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.