Red Metal Resources: Royalty Revenue and a Q1 Drill Program at Carrizal

0:00Thank you.

0:30This presentation outlines a planned 5 ,000-meter drill program subject to financing. The company has also leased its Farallon 128 concession to a small-scale local miner in exchange for royalty. Their operation is now delivered to the NAMI's Valinar plant, and Red Metals has recorded its first two months of settlements. Caitlin Jeff is President and CEO. Caitlin, welcome to Mining Stock Daily. Thank you very much for having me today. Gateland, introduce us to Carousel and why you're focused on it. This project is along the coast instead of the Andes, correct? That is correct. Yeah, the coastal cordillera, which was originally actually the heart of the mining industry 150 years ago in Chile.

1:10That's where copper was originally found. But, you know, the porphyries changed everything in Chile. In the sort of 70s, 80s, 90s, it all became about the high Andes. now you flew a lighter over the targets and over Farallon earlier this year you said it found a new vein set under sampled ground what are your top targets right now and how do they rank well it's a bit sort of broader than that LiDAR isn't quite an amazing tool you know 25 years ago when I started in the industry that was something you did only when you got to the stage of actually mining and building infrastructure because it was abhorrently expensive for a junior.

1:48But for us, being able to fly LIDAR at a reasonable price and you get microscopic things, well, maybe not microscopic, but centimeter scale resolution on the ground. So you're able to see all of the structures that sometimes when you're walking, you would walk right over. So we were using it to, we've identified these great big multimeter veins on the property, we were using it to try to see smaller veins that maybe at surface aren't as obvious, but that might blow out underneath or at least connect to a larger vein or be some indication that there's multiples of veins instead of just sort of three or four of these great big ones.

2:28So that was really, really helpful. We did find some new targets to go and look at, but the bigger picture is putting that together with surface sampling, with IP, with historic drilling, with mining results from both the historic mine and from our artisanal miners to come up with new drill targets. So we've come up with a whole bunch at the end of the summer through all of this work. And I was just going to say, realistically, we have more drill targets than we can tackle right now. I know the historic mine workings are quite historic, I believe. Was there any kind of a lineup with what you're seeing in terms of when you're being the flyovers?

3:05They are. They are very historic. The mine to the north of us flooded out in 1891. So it's sort of a no-go zone for us to be going underground there or anything like that. There are records, but they're sporadic. So it was beneficial. We can see the vein system that that historic mining complex was mining from coming right down onto our property fairly easily. So that was a huge help because it's very difficult to get information out of 150-year-old mindset. Do you have permits in hand for starting the drill? We don't need permits at this stage. So Chile has a unique system. It's all about the number of drill pads on your property.

3:46We still have room to drill another 20 pads, give or take. And Chile has actually, the new government has just come in and put together a proposal to change some of the rules around mineral exploration to benefit the mining industry. And interestingly, one of them is to change the rule from 40 drill pads to 160 drill pads in our region. That's passed a consultation process just in the last couple of weeks. And we expect that to pass and be active by Q1 of 2027. That will be huge. It means you can delay the formal permitting process until you are at a stage where you genuinely know you've found something worth developing.

4:29Now, September 3rd, you said that drill target's being prioritized. And where are you right now in terms of us starting drilling? And what does the campaign look like? Well, we're out there looking to raise money for that drill program. We're heading into full summer mode in Chile. We can drill any time of year where we are. But the goal right now is to start drilling sometime in Q1, 2027. And that'll hopefully be the beginning of longer term, many drill campaigns in the future. Now, what are the plans right now for doing a fundraise? You did have the royalty component right there as well, too, which you're looking at for G &A.

5:11But I believe right now that that is still ramping up, correct? That is so ramping up. The miners have been on site now working actively for five months. They started submitting material in July and we got a payment in August and we got a payment in September. So those were sort of startup. They always submitted 400 and some odd tons the first month and 500 in another month. We're already over a thousand tons in October and they will have to get to 2 ,500 tons by December. So in comparison, so their payout initially was, I believe, at 67 ,000 USD last month. That should grow. And when we take our 8.5 % royalty, that covers all of our costs for operating in Chile.

5:56We do have two full-time staff down there. it covers some of our costs up here in Canada and ultimately the goal is to get to the point where it covers all of our gna a bit of marketing and we can confidently say that the money we raised in equity raises specifically goes into the ground to generate news and advance the project um you know it's kind of um some people kind of call it an australian model um or it has a where you're uh developing a um uh where you're developing a small scale mine that is going to be using for a larger exploration play as opposed to when you're just doing your exploration, raising equity against that.

6:35I guess, what are you looking right now in terms of like the long terms, in terms of this world as well to how far can it take you? Or do you think it's just going to be quite, as you say, is it just going to cover G &A or do you think you could get a ramp up in terms of a fully funding AI exploration program? That's a very good question. So one of the keys is right now the way the system works is you can take 5 ,000 tons per month from any individual mineral claim. So we have 21 up at the Carrizal property. We also own some scattered claims elsewhere in the country where we've been trying to put together a larger land package to create a dedicated project.

7:11We've actually brought on two miners, one at the Carrizal Ferryon project, and then another one on one of those scattered claims where we only own a few hundred hectares. we could potentially have more than one mine site on ferrion on one of the other claims so we could develop this to being a larger revenue generator than what it is if things go well one of the other things is as i mentioned the government is putting forward some new regulations or regulation changes to try to foster the exploration and mining industry and one of the proposals that has just passed the consulting period is to raise the 5 ,000 ton per month permit that we have from 5 ,000 all the way to 40 ,000 tons per month.

7:55And that doesn't sound crazy. You sit there and think 40 ,000 tons per month. Most mines, you know, an underground mine might be 3 ,500 a day, but an open pit might be 60 ,000 a day. So it doesn't seem like a lot. But when you start crunching the numbers, that can be millions of dollars of rock every single month. So there is potential to turn this into a revenue generator that could provide enough cash flow to support the exploration? You know, you are an exploration company, an early stage exploration company, but it was interesting, you did mention water and water infrastructure. You are in a notoriously dry region that you did right now.

8:36You know, before we started this interview, you said it's never too early to talk about water. What is desalination infrastructure there right now? Why are you considering it right now and where potential would water come from for Karazap? So it's not necessarily that we're considering building it. It's more, it's got to be on your mind when you look at Chile and think about the fact that they're bringing water all the way up to the high Andes at 5 ,000 meters and what that must take and what that cost is to build that mine and that infrastructure. It's wild. So it's a huge benefit in our property that being in the coastal Cordillera, we're 20 kilometers away from the ocean.

9:12We have already seen several desal plants developed along this coast to support the mining industry specifically. So we sort of look at it as this isn't going to be a major roadblock for us. We have enough water on the property that we can buy right now to support the activities that we're doing. But we know that if it gets to a development stage, we will have to look at desalination. Chile is a leader in desalination plans for the mining industry. There have been huge advancements. They had built seven, I think, already. Probably they've developed more now. When I first started looking at it, they had already built seven specifically for the mining industry.

9:52And they're still building more. They're still permitting more. They're getting better at it. So it's mostly to bring attention to the fact that water shouldn't be as scary as you might think, even though we're in a desert environment. Lastly, Caitlin, milestones over the next 12 months as you look towards that Q1 2027 expiration drill results or starting the drilling campaign, rather. The milestones are definitely going to be, we've been talking a lot about generating drill targets. We've been doing some of the quote unquote boring scientific work. The milestone will definitely be the holes in the ground that start.

10:26And the second one, we'll be watching these miners ramp up to see what they're getting underground because they are proof of concept for anything that we're doing in the exploration side. Caitlin, thanks for speaking with Mining Stock Daily. Thank you very much, Michael.

10:39Caitlin Jeffs: The information presented should not be considered investment advice. Mining Stock Daily Yance 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.