Permits in Hand, Element 29 Expands Elida Drill Campaign

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0:25Department of Health and Mining Stock Daily Hosts. elevation with a paved road access and nearby power infrastructure. In September, the company made news when announced that Randy Smallwood, former CEO of Wheat and Precious Metals, was joining the company's board. The company is planning an updated mineral resource estimate at either the end of this year or early 2027. Peru is a top copper country, historically ranked second globally in production. Newly elected Peruvian President Kiko Fujimura has announced measures to speed up resource permitting. Richard Osman is CEO of Element 29, and yes, in the periodic table, Element 29 is indeed copper.

1:06Richard, welcome to Mining Stock Daily. Thank you, Michael. Appreciate you having me. Richard, let's turn to your flagship Alita. You have drilled roughly 28 ,000 meters to date. Standard hole is 35 with 1 ,534.6 meters, grading at 0.58 % copper equivalent. In July, you got permission for up to 40 drill platforms, which will allow the company to expand its drilling footprint and do some systematic evaluation of five porphyry targets. Yeah, that's exciting. You know, every time we drill holes at Elida, we learn something new and the project is still delivering some fantastic results. We put out hole 37 and 35 actually back a little bit earlier in the year.

1:54And then we decided to go back into hole 35 based on the results of hole 37. And, you know, I mean, it's probably the, it is the longest interval of continuous mineralization that we've severed some fire in the project. So, you know, lots of, lots of good stuff left to come. We're just getting started on this project, really. Are you going to have a sufficient drill rig? So with the expanded targets? uh yeah i mean uh this year we had budgeted or planned to do uh you know 7 000 meters of drilling and i think we're going to come in probably a little bit closer to 12. uh we currently have two rigs on site uh we're looking to we're supposed to have the third rig come in this week or last week uh and uh apparently the crew are just mobilizing now so we should hopefully have a third rig coming in, uh, later this week, early next week.

2:44So that, that's, uh, you know, that gives us, uh, three rigs. Uh, and, uh, I think, you know, one of the good things about Ellie does that it sits on the Western side of the Cordillera, uh, at a lower elevation. So we don't get the, uh, the rainy season there. Uh, it's in the out-of-cama deserts, so we can drill all year round. So actually it gets easier to find rigs and, uh, to get assay results back and things like that as we get later into the season. into the end of the year going into early 2027. So there is potential if things are going well and we have a new drill permit, we can actually get in and add even more rigs to expedite the drill in for sure.

3:26What are you thinking right now just regarding the geological model and also that you're expanding out to those targets with the drill campaign? So in a video you published in July with VPIR Dillenberg. It said you still haven't hit what you think is a cause of porphyry, and you may be only seeing the edge at the bottom of hole 37 and 35. Yeah, that's right. We're seeing a little bit of some fingers of porphyry that are well mineralized. And I mean, holes 37 and 35 actually ended in pretty decent mineralization. in the whole 37, the last 93.8 meters ran 0.87 copper equivalent grade over, I think it was like 0.76 copper, plus some really good mollene and silver credits.

4:15So, you know, the system is definitely

4:21complex in the sense that the porphyry system is generating all the audio thermal alteration and mineralization within the host rocks. We do see some intermineral porphyries, but we haven't actually found what we believed to be the porphyry that's actually driving the the early porphyry that's actually driving uh or or sort of uh the one that's like sort of started the system going i guess it generated most of the hydrolytic fracturing and and uh you know um um you know bringing in the that early copper band right talk about the uh five targets that you're expanding to how were they chosen? Yeah, so we we've done, uh, like, I mean, we are, the footprint of the system has been, uh, you know, we, we had, uh, zones one, two, three, and four laid out before.

5:11Um, and, uh, you know, those are basically based on, uh, known porphyry centers that are exposed on surface. And we've really just tested it in and around zone one. And what we're doing is like, we're, we're trying to sort of work out from there because that's where you know the known resource current resource is and we're trying to use vectors to continue to test that at the same time uh you know the the the previous drill permit had a 20 platform limit so we had pretty much used up the entire amount of platforms is drilling in the zone one area so we just got approved for an upgraded drill permit that goes from an FTA to a DIA, which allows us to go to up to 40 platforms.

5:55And the government actually just put out a new Supreme decree, which allows us to even go to up to 60 platforms with a DIA permit. So we're looking to, like, I mean, with that permit at hand, we're looking to sort of step out and do some more testing of some of the other centers within the system, like Zone 4 and Zone 3, which look pretty exciting. surface, you see good alteration, good mineralization. So, you know, it's definitely part of a cluster. We also did some geophysics with a large magnetoteluric survey, MT, which has been used quite a bit to explore for porphyry systems in South America.

6:37If you look at some of the news releases from Aldebaran, they used it to sort of map out their deeper L-tar deposited, which sort of doubles the size of resources. So it does a really good job of mapping out hydrothermal alterations associated with these large porphyry systems down to depths of like over a kilometer. And we completed a 6K by 3K survey. You know, we can see there's the hydrothermal footprint in the system extends pretty much through the entire property. And, you know, that system actually sits right on the contact with the Caribbean coastal bath lift and the host cretaceous sediments, which is where you have the main tertiary magmatic arc, that main structural suture coming through there.

7:25So it's actually pretty exciting that we've made that discovery of Mali there, but it also gives huge potential to be able to continue to look for other centers and make this into even a larger cluster. So that's actually really exciting for us. The molybdenum is quite high in what you're drilling into, correct? It is, yeah. The moly is probably double to triple what you see in most porphyries. And what's also really interesting is that when the copper grades actually start to drop off a little bit, the middle of them picks up. So our copper equivalent grades usually tend to be still quite high.

8:02And we haven't done the network yet to know exactly what the recoveries are, but we know the molly in places is pretty coarse grain. So we're sort of very optimistic that we'll get some good recoveries on molly. And the copper is actually very conventional, just calcopyrate for the most part. We do see in thin section a bit of boronite here and there. We're still expecting to find sort of that higher grade core type part of the system where you're expecting to get into more, you know, boronite and the calcopyrite to parate ratio will start to change. So you're getting less parate, more calcopyrite, things like that.

8:41So, you know, we really haven't tested the limits of the system. We think we can drill deeper and still get better grades. And we haven't also tested laterally yet to see what the lateral or vertical extents of the system are. You did mention that you did announce that you're going to be doing some metallurgical work. When do you think that might drop? Yeah, so we hired Synectech out of Quebec, and they're an engineering firm. They have a lot of experience working with Xisco and G-Mining. and so they're going to be spearheading currently working on putting together that program. We still haven't finalized demanding to be able to send samples out to the lab, but I mean all of our samples are being like sample rejects are stored in nitrogen, so we have a lot of available sample that we can actually send into the lab.

9:40So it's just a matter of figuring out which samples we want to send And then we're going to send them in and probably be a couple months, get that work done. So, yeah, we're hoping to have the MET survey completed before the end of the year. So, Richard Osman, in your deck, one of the points that you mentioned right at the top is that Elite is at a lower elevation. Why is that important? Yeah, like a lot of the porphyry copper projects, like Elite is at like 1 ,600 meters elevation. Most of the porphyry systems, like for example, Antamena, Totomocho in Peru, and then going into Argentina, they're all sitting up around 4 ,000 meters elevation.

10:21For us, and they're very remote, they're further from the coast. So for example, Antamena, when it first started, sits probably about 200 to 300 kilometers from the coast. and they had to build a pipeline and put in a port to get their product to market. So again, very remote, like we can actually drive to the Antamuna port on paved road in about an hour and a half. And, you know, things are a lot more efficient when you're at lower elevation. You know, if you're up at over 4 ,000 meters, you have less oxygen. It's harder to get work done. You know, there's more risk associated with health and things like that.

10:58So I think, you know, being at that low of elevation, there are very few projects that you do see, like corporate copper projects that you see at these kind of elevations. So, you know, we're close to the coast, low elevation. We have good infrastructure, road accessible, access support. So everything you need for sort of a low cost project to develop and operate. You mentioned you're close to a hydroelectric power station. Do you think you'd be able to secure power from it? if you do advance to being a mine? That's a good question. So the power plant is actually done through a run of rivers. So what they've done is they've had a sleuth gate in the river and they've tunneled through the mountain about 5K and they produced power on the down gradient.

11:46So it isn't your conventional power hydroelectric facility where you have a dam and things like that. So it generates over 45 megawatts of power. So I think you'd have to upgrade it. Or, you know, so there is opportunity certainly to work with the, uh, that company that runs it, so your private European company, but what's really good about it is because that plant is there, the national grid comes right in to within 15 K of our projects. So we have like a high density power line that comes within 15 kilometers of our projects. So we have lots of options, uh, just because of that infrastructure.

12:23You have three other copper projects that you call highly prospective, of Florida Cobra, Paca, and Puhawhai. What resources are these projects getting vis-a-vis your flagship Alita, and how far do you want to take these projects? That's a good question. You know, we really haven't been in a position to be able to put a lot of our, you know, capital into these projects because we've been so busy drilling up Alita. uh you know uh so right now uh we we just raised 35.4 million back in april we just topped up with another 12 million and that 12 million is earmark for uh trying to get more work done on these these three other projects so our Florida Colbert project for example I mean it sits 26 kilometers away from Sierra El Verde one of the largest copper mines in the world in the southern Peru copper belt, which again is, you know, like one of the most prolific copper jurisdictions in the world as well.

13:27Uh, so, you know, this is a project that has huge potential. Um, and, uh, you know, Anglo held its ground for about 10 years. They dropped it. We staked it in, uh, competition with five other majors. We got it most of the ground, um, at a time when, you know, there wasn't a lot of interest in doing exploration for copper, uh, you know, prices were like$2 a pound kind of So, you know, we, uh, we're very fortunate. I mean, ground doesn't come open in this, this sort of camp, this jurisdiction very often. So when you can get access to it, um, like this, uh, and then, you know, we've just been just holding onto it, try it, look, the cost of holding ground in peruse about$3 a hectare.

14:09So we have like 3000 hectares, uh, and that's$3 a hectare per year. Uh, so, you know, we've been systematically going through, trying to get the drill permit in place and we're now at a point where you know pretty much everything is lined up to be able to start doing uh some early stage drilling on these projects uh later this year into early next year um and again they're all sort of uh uh cherry pick they're they're all at low elevation close to the coast uh you know and uh i would say you know part of that tertiary magmatic art which is where all of the big copper, most of the big copper deposits sit in, uh, not just in Peru, but also in South America.

14:51Uh, so Richard, uh, let's just talk about a news flow after this. So, uh, when do you expect that there's going to be a assays dropping? That's a good question. Uh, we, uh, you know, the holes are, are fairly, um, you know, we're, we're drilling one kilometer holes kind of thing. And, uh, and we're, we're, we're trying to get a few holds on at a time. So we're trying to sort of get news out on drilling, probably, you know, uh, at least one news, uh, release on drilling every quarter. And, uh, so, you know, once we, we have two rigs going now, once we complete these holes, we'll likely put out a news release.

15:27um you know our um uh our hole 30 34 or sorry 44 is down over a thousand meters now and uh and uh you know whole 35 or 45 is very close to that so you know we're getting we're getting pretty close to getting the maximum limits of these rigs again and you know we're we're going to continue to drill these holes, you know, to sort of get a pretty good sense of what's happening in this part of the system. And so, you know, we're expecting to finish these holes up in a couple of weeks and then, you know, get some assays out to the lab to hopefully get released sometime in October. Is the drilling year-round house access?

16:18Yeah, it does. That's the neat thing about this project is you can drill all year round.

16:27Like I said, just because it's low elevation, we have a really good support from the community as well. So we have a five-year access agreement with the community that we signed a year and a half ago. So it's still close to four years left there. And we hire probably 40 to 50 members out of the local community. So anybody who wants to work on a project have an opportunity to do so. We sort of do like these 20 and 10 rotations. So the community are actually very supportive. And if you have community support in Peru, you get social license to operate, you're sort of guaranteed pretty much to get your permits and be able to move your projects forward.

17:09So lastly, Richard, you do have the expanding drill program that you've announced. because with the new permit issues. What are you looking at right now in terms of the MRE, in terms of which drill results you're going to be including into that? You're kind of roughly looking at either the end of this year or early next year for that MRE. What do you think you can get within, what drill results do you think you can get within it? Yeah, that's a good question, Michael. uh, we, uh, you know, we, we want to make sure that we sort of hit our target. So we're obviously, you know, I mean, working with Cinectec and trying to build out, uh, and, uh, you know, the, that sort of what that, what this resource starting to look like.

17:54And every time we drill a hole, we're adding to that. So, you know, what we'd like to do is be able to show that we can potentially, um, you know, probably hopefully double the size of the pit. So you get like over half a, like 500 million tons. That would be our target inside of the pit. and then show potential as a target to a billion tons within that open pit and underground, probably block cave scenario. Once we feel that we're getting close to that, I think that's when we will probably like, I think that will be the opportunity to put out an inferred resource, update an inferred resource on the project.

18:34So we're sort of, you know, I mean, there's still lots of work to do. The system is still wide open in all directions. So we don't want to get too far ahead of our skis and saying that we'll, you know, we'll, we'll, we'll put the data at a certain time. I think we have to sort of be, uh, you know, in a position to put it in when we feel comfortable that, you know, we're, we're starting to see how this system is, uh, is developing, you know. Richard Dawson, thanks for speaking with Mining Stock Daily. Thank you, Michael. We appreciate it.

19:34Thank you.