Earnings Call - SEABRIDGE GOLD INC

Good afternoon and thank you for joining us today. My name is Ian Parkinson, Managing Director in the research team at Red Cloud Securities. Delighted to host a Red Cloud webinar on copper and gold exploration in Brazil today. Today we'll be hearing from Prospectiva Resources CEO Dan James. During today's webinar, they'll provide an overview of the company and outlook. They will also be taking some questions. You can type your questions into the chat box at any time and we'll get to as many as we can. Before we kick things off, first, I'd like to discuss the fine print. During the webinar, forward-looking statements will be made. I would direct listeners to its forward- looking statements outlined on page two of the Prospectiva Resources corporate presentation. That can be found in the company's corporate website, prospectiva-resources.com. For Red Cloud Securities, Inc., we would like to highlight that webinar is for information purposes only it should not be considered a solicitation or recommendation to buy or sell securities we note that this call does not does not consider the particular situation or needs of individual investors participation participants should rely on their own investigation and seek their own professional advice before investing please see our most recent research disclosures located on the red cloud website for specific disclosures on prospectiva resources with that i now turn it over to dan to update our audience on the company good evening good morning good afternoon thank you everybody for joining um so it's my pleasure to introduce the company prospectiva sources so we are a brand new company uh we were formed only a couple of years ago and we we completed our ipo process onto the Toronto Venture Exchange, under the ticker symbol PSVA. So we're now trading. We're midway through our maiden drill program in Brazil. So I will walk you through. So, I'm Dan James. I am the CEO of Prospectiva, and I'll walk you though several parts of the presentation, including the people, the geology, and we'll take some questions at the end. And my presentation should be about 15 minutes probably less than less than 20 so bear with me for your attention i'll gladly walk you through the next stages so prospectiva resources some of the key highlights are that we have a large land package the package is located up in northeast in brazil in the states of pernambuco and paraiba it's a 300 or 300 plus square kilometers of ground we've got our flagship copper project which is the south francisco copper vms and i'll go through the vms story very shortly and it's situated in the borba emma belt and we are now looking at a potential new discovery coming through from this part of the part ofthe world so it's not a brand new project it's been drilled by yamana yamano were a mid-tier gold producer they were a global company and then they were acquired by pan-american silver which is now a multi-billion dollar mining company globally. So Yamana back in 2020 to 2020 and 2022 they completed 5,900 meters of diamond drilling and the deposit was previously discovered in 2019. So the highlights as you may have seen in our news that came out yesterday we've now intersected just in the first three holes mineralization in every hole the third hole of which we've intersected some very high grade copper mineralization so that is that 7.15 meters of 4.78 percent copper and that comes with some gold and some silver as well. So I'll go through the geology on the project but we've now situated it within a three kilometer geological and geophysical corridor. Outboard from the main copper target we've got three additional gold targets as well, Tibera, Destero and Pica de Diabo. These are high grade gold projects with grades up to 400 grams per ton on on the surface and i think what we're seeing in brazil it's a mature mining jurisdiction you know this is a well-established infrastructure well-established mining code and there's a clear permitting pathway through the various stages of development of the of the company and it's run by an experienced management team supported by an excellent technical advisory and we've got a full operating team on the ground so what i will go through throughout the presentation I'll refer to the three points which I'm calling like these pillars of progress for exploration and I think that the context around that is that we have to be in the right jurisdiction to find deposits in the first base which is an obvious statement but we have to be an area where this where the geology permits significant deposits to be formed secondly if those deposits are there we need the team we need people to be able to find them and then thirdly once we found a deposit we need to take it through not just drilling but we need be able identify that permit pathway to get it through to a production story. So they are the three points that I'll refer to throughout the presentation. So the people that are delivering on Prospectiva resources, there's myself, an exploration geologist, nearly 30 years experience in the industry, sitting in the position of CEO and co-founded the company with Jeremy Martin. He's our executive chairman. He's also an explorationgeologist, over 25 years experience, 15 of which or the last 15 of which was in Brazil running a company called Horizonte Minerals so he has a very deep knowledge into the country we're supported by Jenny Lee Toronto based CFO and then on the ground we've got key members of the team Robert Selwyn who's our QP and been working with me for nearly 12 years now across different countries, different jurisdictions our country manager is Mario Gula, he's been working with Jeremy for over 15 years, very well rounded in the operations on the ground, and supported by Luciana Lima, our operations manager. On our board, we've got Rolf Fuchs. Rolf Fuchs is Brazil-based, a Brazilian national, been working in the environmental and social parts of Brazil for the last 40 years, running a company called Intergracio. We're joined on the board also by Kate De Silva, a UK-based corporate lawyer. And then our advisory team, we're joined by Kate de Silva, we've got dr richard zillito uh very well globally world renowned he is uh you know behind many copper discoveries globally he's been involved in just about every project i've worked on in the last 20 years and he was involved in the in the targeting for san francisco as well and similarly we've Got michael skeed mike skeed i've Worked with who's my first boss in fact back in 1998 and he is an industry veteran has been going for nearly 40 years in the industry has numerous large-scale gold discoveries to his name and a well-rounded exploration operator. I think one of the fundamental backdrops which I'm sure we're all well aware of is the copper fundamentals. Now the copper supply gap is ever-growing depending on which research you read you can see that there is an ever- Growing supply gap driven by electrification needs and I think compounded by the fact that exploration has been so poorly funded for so long that we now have a very thin development pipeline coming through. And then with the permitting pathway, as I talked about earlier, many countries, it's very difficult, it is very timely to get a project into production and therefore supply that copper to market. So therefore, what we're presenting here is a very well leveraged situation where we've got a jurisdiction where we can see a clear permitting pathway, a team to deliver it, and we have the geology in which we can host it. So in that jurisdiction of Brazil, you can see on the right, the map of South America, we are sitting up in the northeast corner of brazil in the in the states of pernambuco and paraiba this is not an early stage jurisdiction this is a mature mining jurisdiction so we've got a well endowment on the on the mineral side of it there's a skilled workforce through throughout strong esg commitments and it's a mature money mining framework with with excellent infrastructure throughout the country i think when we talk about the permitting pathway this is this is one of the key slides really so we're seeing in brazil that there is a very clear way forward with these projects so finding a drilling intersection is one thing finding a deposit is another but putting it into production is a Very different scenario so we are very lucky in brazile that we can see companies in front of us like meridian mining for example this is now a billion dollar company these have gone through exploration you know through their discovery phase and they're now moving into development with a definitive feasibility study. Other companies like Cabral, Cabral located in northern Brazil as well, they're going forward under a trial mining license. So they're producing gold, which is basically creating cash flow, which is then helping them move into the full development cycle. And then you've got the big boys up front. So you've Got the likes of G Mining Ventures. Now, these guys are obviously a multi-billion dollar company operating mines in Tocantinsinho. So the key here is that you can see where we sit right at the beginning of the exploration development phase through the meridian minings into the likes of Cabral and then off into the distance with the G mining ventures. So the next few slides, we talk about the geology. So we have to be in the right part of the world to define these deposits. So we are sitting in the Borborema belt. It's an east-west belt. It's extensive all the way from Recife at the coast, all theway to the state of Palau on the on the western side. On the north and the south of the belt, we've got two operating mines. We've got Ora Mining's mine, which is the Borbarama project. That is about a three million ounce gold deposit. It's a very similar, in fact, to our gold orogenic system, same structure, same controls. and then to the south you've got the Cerote de Laje now this is an iron oxide copper gold deposit so this is large open pit mining operation it was sold by Appian early this year for about a quarter of a billion US dollars and it's now in operation by a Chinese group on that part of the belt. Summary is that we have numerous deposit styles numerous deposit sizes throughout the majority of this belt so we're still considering this being to be an underexplored part of of the of the world so moving into our license package all of our licenses this entire license package 343 square kilometers of it is 100 owned so these were the licenses that we acquired from pan-american silver closing the transaction earlier this year so we now hold 100 of these san francisco is our flagship this is a volcanogenic massive sulfide system that's located in the bottom left of that map the other three targets tabira pico de yabre and destero these are all orogenic gold systems so these are a different system but they've all been deformed they've got very similar structural controls and they all form under the same project umbrella so focusing in on on our flagship project now so this is san francisco copper gold project so this was discovered by yamana the mid-tier gold producer acquired by pan-american silver back in 2019 they undertook an extensive regional program of rock chips of soils and were very successful in the region and highlighted this project as one of their key projects in the Borborema Belt. They then went on to complete two phases for a total of 5,900 meters of drilling, completing that in 2021. And then at the end, they went over it with an IP survey. So an IP is an induced polarization survey, which is very good at defining very broad zones of anomalism. So typically, it's an indirect tool for identifying gold and copper mineralization generally by identifying the minerals that host those those metals they were very successful with their drilling they had some very good drilling intersections and you can see the drilling intersections on the left there the best one that Yamana identified was the seven and a half meters at six and a half percent and then the second best drilling intersection is our hole three that we reported yesterday in the markets that's at 7.15 at 4.78 percent copper so that is a very high grade you know seeing copper grades like that over widths like that is quite unusual in in this market so these are quite exceptional high grade results. The program at the moment is ongoing so it's a two and a half thousand meter diamond drilling program we're drilling 10 holes this is underway we started this back in August immediately following the IPO it's taken time to drill the first holes get the assays back from the laboratory and then we've announce them so the first batch of results are now in the market and that came out yesterday so what we've managed to do already with our drilling program is confirm the correlation between the geophysics we used a fixed loop em so it is an electromagnetic survey this basically puts a charge of electricity into the ground and zones where you see this massive sulfide mineralization like you can see in that figure has an electrical charge so meaning that the charge passes through it really well so it takes a long time to decay and it's that time for that signal to decay gives the indication of where there's the sulfides so we've been using this fixed loop em survey and it's been working really well and the first drill holes already confirm that the fixed loop survey the geophysics is directly correlating with the mineralization so we have a very good tried and tested now exploration model where we go from geochemistry looking at the surface samples through this phase of geoph physics and then we can drill test very specifically these targets coming out from these electrical responses. So we're continuing to do more of this geophysics but we're using it as in a downhole survey. So when we put a drill hole down we then put a probe down the open drill hole and then we survey what's down the hole and if there's any electrical response off the hole, i.e. away or underneath, we can then reprogram our next drill hole to try and hit that high zone of conductivity. A geological map of the South francisco area i think the key point to make now is to talk about vmss so vms is a volcanogenic massive sulfide these are known as like black smokers in in modern day analogs so under the sea floor they reach the sea floor and they throw out these big clouds of black smoke which are heavily pregnant with metals be it copper lead zinc silver these are generally polymetallic you know multiple metals sitting in a in a single system what we're starting to identify here is that our system is a VMS it was not recognized as a VMs before we think that that's significant because obviously now we know what it is we can explore for it better once we know now we know that what it ist and we've done this through a series of thin section and petrological studies we can now see that there's been a Vms these systems tend to cluster and I've got some analogs in the presentation that I'll show you that quite often you get get one main zone and then further along strike in the same rock units, you get another one. So you can get multiples of these zones, almost pearls on a necklace as they emanate away from a main zone. So what we're seeing here on the map, I'm not sure if you can see my cursor, but in that lime green colour, this is now what we've identified as our favourable schist horizon. So this contains the mineralisation at the main zone at San Francisco. The EM conductors, those electrical responses, are all within this main horizon and the mineralization that we've seen are within the same horizon so we're now starting to see that where we've got these zones of copper enrichment in surface you can see these targets coming through here and down through here through soil anomalism where we are consistent with both the soil geochemistry and the lithology we will then put the geophysics over the top and that's our exploration program and then we drill drill each of those targets so we are basically looking at a multiple targeted VMS system in a brand new or newly identified VMS system in in a large large-scale belt. Zooming into the main zone so yesterday we announced our results this is the map for of those results so going from left to right of the image on the far left you can see the discovery outcrop so this is where Yamana came through they identified a gossan mineralization which is basically rusty rocks where the sulfides have been weathered and they have oxidized and they created a brown rusty outcrop that is highly anomalous with with copper so their outcrops they had samples anything from two to five percent from that one discovery outcroit they then stepped away and put some drill holes into this main zone and then our drill holes as you can see on the map here holes one two and three that we've announced again very high grade and sitting in that hole three so we have got some drilling from Yamana that was pre-existing so we're able to correlate the historical drilling with with our drilling and it links very nicely and then the red planes on here these are those geophysical responses so that's what's charging obviously they're below the surface and they're about anything from 30 to 60 meters below the service but that is what's giving us our electrical response which is now what we're drill testing so once again those very high grade drainage sections are shown on the on the figure here you can still see also see where our program is progressing to. So it's very exciting for us. We're now midway through. We are now stepping out more and more into the unknown. So these first three drill holes, part of the story was confirmationary. Part of it was infill. And the other part of it, was to check that our exploration methodology is correct. And so far, we've ticked all those three boxes. So now with increasing encouragement and confidence, we're now stepping out to the east. And you can see our drill plan as we start moving along that electrical response, that electrical EM conductor. So putting this into a cross-sectional view, so this is a long section, so this starts on the left of the map from the discovery outcrop at surface, and you can see the plunge of the mineralization. So it's basically a shape of a surfboard, and we've taken a long cut through the length of the surfboard. And you can see the consistency of that mineralization running all the way from the discovery outcrop through the historical work confirmed by our first three holes of drilling and then will be tested further by our the next seven holes that we'll be announcing over the the next couple of months and I think you can see running through the middle here the key point is this is this red unit in here so this is our modelled mineralization zone so this ist dominantly chalcopyrite and pyrrhotite mineralization so again those high-grade intersections you can see on the map there. So the mineralization, as I just mentioned, is predominantly chalcopyrite. Now, chalcopyrite is a sulfide mineral, meaning that the copper component of that mineral is about 30%. So when you see 10% chalcolpirite, you're going to get about a 3% copper assay value. So in here, you can see the amount of chalcalpirite which is that bronzy, almost golden color mineral. That's the dominant mineral in here. So when your getting 30, 40% of chocopyrte, you are going to to be getting plus 10% copper in that specific interval. You can see also these clasts. I think this is probably more of a geological interesting point that you can see that it has been broken. It has had some deformation. And what we're seeing, which has worked in our favor, that this local deformation, which is squeezed the sulfides, it has squeezed them and it has controlled them into a fold hinge. So we're now seeing that we've got fold hinge parallel mineralization. All of this is eastward continuing, but it's worked in our favour that it's now concentrated those sulphides into that fold hinge. Just to give you a sense of the lay of the land of the project, the discovery outcrop which you remember from the cross-section was on the far left, that's now in the middle of the image in that scrubby undergrowth, that's where it was found in there in 2019. The rest of the mineralisation comes towards us and this is a demonstration of the envelope in that dotted line. And in the mid ground, you're seeing that the mineralization below surface is about 30, 35 meters. And, in the foreground, it's somewhere around that 60, 60 meter level. You can see it's scrubby vegetation. It's not heavily forested. This isn't the Amazon. This is a semi-arid area. Land access is excellent. There's dirt, gravel roads across the entire property. We've got permissions with all the landholders in the area for access. we enumerate them a small amount for each drill hole and each access road so so far we've been very warmly welcomed with with our work in the area. I think the final point on this image is how it lends itself towards an open pit scenario you can you can imagine if that's the outline of the mineralization daylighting outcropping at one end and then gently plunging you know along the length of the system it lenders itself very well to open pit and given those grades and that close to surface, it has a potential to become a very exciting project. So just taking a couple of slides, just to change gears slightly, just walk you through a couple of the gold projects that we've got. So coming back to this first slide that I showed on our license package, again this is our 100% owned license package. You can see San Francisco's in the bottom left-hand corner of the map that we've just been talking about. We've now got three other projects which are wholly owned part of our our license package tabira pico de yabre and destero so at tabira this is very high grade gold in veins these are outcropping on surface all of the pink squares on that map on the left are greater than 20 grams per ton gold which is incredibly high grade and you can see how many there are some of those samples exceed 400 grams per tone and many of exceed 100 grams a ton so when you find these veins they are incredibly high grade so they are generally quite narrow anything from you know 10 to 20 to 30 centimeters wide so these aren't huge wide veins but where they occur they occur there's a few of them occurring together and what's the objective of the work to do here is to see where these veins coalesce if they coalesCE or where they coaleCE you're likely to get much thicker zones of mineralization so this is the objective of what we need to do on this project. So DeStero is the last bit of geology I'll talk to you about so this is a brand new very early stage project we are getting a little bit excited about this we put some news in into the market a little while ago we had some high grade rock chips coming out of this project so up to about six grams per ton and interestingly it comes with a very strong bismuth association now that's not just an academic point it is a it's a practical point in the sense that where you start seeing these bismuth and associated other elements it can mean it's more of an intrusion related system which basically means that rather than looking for small veins we're now looking for a much bigger target that we can be you know a much higher vein density and also the rock around it can also be mineralized as well so this is a brand new brand new target that will be working up in the in the coming weeks. So I talked at the beginning about the development pathway this is a slide talking about our peers so it's comparing some VMS deposits globally and just to give a sense of where we sit as Prospectiva with our current valuation with the current stage of exploration what does that mean when we compare ourselves to others so for example when we look at Meridian Mining which we talked about earlier in the permitting pathway also located in Brazil and is a VMS a volcanogenic massive sulfide system that is a 63 million ton system so it's getting quite large it's managed to grow really nicely but it was an exploration project gone through the phases of exploration and multiple drilling and it's now identified as a as a 63 3 million ton but but those grades at 0.44 copper grades and it comes with a 0.6 gold grade so the grade is is the gold grade is good the copper grade is is i'll say it's fairly average but it's it's working and those grades can make it work at that sort of tonnage level so that's now at a definitive feasibility study and that's now a billion dollar gold copper company so just a couple of other analog so if you when we talk about VMSs being clustered one of the best examples are the Cygnus metals Cygnус metals located in Quebec recently sold to Camel to Central Asian Metals for 230 million now the tonnages of this was about 15 million ton system really good grade 2% plus copper grades and comes with a good gold credit as well but but for a 15 million ton you know the the value that's associated with the deposit of that size is really interesting similarly when you look at new world resources you know their antler project in arizona that too was sold that was subject to a bidding war between central asian metals and cantera sold to cantera for just under 200 million canadian similarly about 15 million tons at a similar sort of grade so it demonstrates the value of these of these projects in the market and what we're trying to do and what weird that trying to demonstrate now is firstly the demonstration that we are a high-grade copper system at san francisco and then secondly with the increasing drilling that we want to start increasing the the tonnages and leading it from five to ten and then beyond that in a you know in the tonnege scenario and these vms's it's very rarely you start off with the we don't very rarely do you start and end with the same tonnage as these systems grow you find more they cluster so this is exactly what we're trying to do in this part of the world in San Francisco is grow out the number of deposits the tonnage of the deposits but maintain that that high grade as we as we move it through so just looking to summarize I think the first point here is the grade this is a high grade it's not only high grade it's near surface so that is quite exceptional to be having those sorts of grades that near to the surface seven meters at nearly five percent copper with a gold credit as well and a zinc credit and it comes with a little bit of silver in there the first target is that three kilometer geophysical and geological corridor so this is now that we're stepping out through and drill testing our way through that and similarly we've got these three gold projects as well the tabira the pico and the and then the distiro there are very clear near-term drive value drivers in the company we're still very lowly valued in my opinion and i think that with the delivery of these high-grade near-surface results and the continuation of those results, that will demonstrate, you know, a very clear high-graded system. And then when we move in through another phase, you Know, we'll be then targeting into resources into mid-next year. So there's some very clear near-term value drivers. I think the backdrop that we're looking at is the jurisdiction is excellent. Brazil is an excellent jurisdiction in which to operate. It's clear, is transparent and you see a very clear permitting pathway whether you take the trial mining route like Cabral or you go the meridian route and grow it through exploration through to definitive studies but there is a clear pathway through and the number one point here is that copper is critical you know there is no getting away from the fact that there is not enough of it being found the mines is now finding difficulty in keeping up with production the demand is continuing to grow so there is a very clear fundamental uh demand for for copper so just wrapping up with the share structure uh cash on hand we've got about three million uh cash in hand currently uh that was of three days ago uh market cap we're sitting about 12 and a half half million with the share price uh just about 50 cents so total fully diluted shares that we have out is a is 32 million The company is owned 50% by management board and the founders. And then we've got institutions sitting around that 26% with retail sitting at around 25%. So that's the end of the presentation. Thank you very much for your time. You can see the link to the website on the page here. And we are Prospectiva Resources listed on the Toronto Venture Exchange under the PSVA ticker. Thank you. Dan, thanks very much for a very informative presentation. We're going to start the Q&A portion of the webinar. Reminder to everybody on the line, you can type your questions into the comment box in front of you. We've already seen a few questions come in. Maybe I'll kick one off at a high level, then we'll go into some more project-specific questions. But Dan, what initially attracted Prospectiva into San Francisco and how has that view evolved now you've had boots on the ground for a while? Well, I think the initial attraction was the work that Yamana did. Yamana were a well-respected gold exploration company. They were also looking for copper at the time. So the work they did was really very good. They collected thousands of rocks, thousands of soils and obviously completed the diamond drilling program. So the standout highlight was the grade. You know, we walked onto this and saw that there was significant grade intersected. The program was truncated and terminated through the acquisition to Pan American Silver. So there was clear low hanging fruit left on the table. And I think they also completed an IP geophysical survey over the top. So they left a number of questions unanswered. You know the work, while some of it was excellent, there were still parts of it that were unanswerED at the time. They weren't calling it a VMS, for example. So that part of it is now new. That's the work that we've done. So that's where we start bringing in the story about clusters. So that Part of it was really attracting. And if we can see those sorts of grades that close to surface and have any sense of scale, then this is the making of a very good exploration project. So that is where we were about 18 months ago. We fought very hard to acquire the project and now sit with 100% of it. And this maiden drill program, it's kind of short. what's it designed to establish and what would you characterize would be a successful outcome from this first phase? Well, I think there's a few things we wanted to test. And I think the first three drill holes that we've put to the market demonstrate that. The first thing was that we wanted to check on the model. We wanted to cheque that our targeting tools are correct. And as I said about these three pillars, we found the geology. Now, can we as explorers find the actual deposit you know i have have we got our our science correct and are we going about this in the right way and obviously in a way that's that's um you know that that's cashed reasonable as well so we have tested that the geophysical anomaly is there and we tested thatthe mineralization and the geofysics are almost one to one that is that is brilliant so we're really happy with that part so that is a resounding success just in the first three holes then we want to check the continuity of the mineralization uh these first three hole three holes were largely infill and confirmationary we didn't do any twinning so there was no you know um you know sort of easy wins by just repeating a hole these were bona fide infill holes and there were gaps up to about 200 meters so so there was a clear infill need that we've done and i think that what we wanted to work out and i think one of the questions i've seen seen in the chat there is is the mineralisation is it does thing thin and thicken this is this is natural but what we have you kind of draw the metaphor that this is kind of like a a sandwich the jam and the sandwich is is the mineralization and if you squeeze that sandwich that jam in places is going to thicken and it's going to thin so there's an unevenness to it as well there's a predictability to it in the sense that this is a fold hinge parallel system so all of that jam when you squeeze the edges of it it squeezes generally into that hinge, into the zone of maximum dilation. But there's also unevenness of that distribution through there. So there's thicknesses ranging from, you know, like 50 centimetres to seven metres. So we do see some variability in that grade. But the thing that is consistent is that that mineralisation or the German metaphor is consistent. It is consistent in every drill hole. We've identified that there is mineralisation and that is coincident with the geophysics. So I'll switch to a couple of questions that are coming from the audience. So is there any scope to test SF2 during this current 2500 meter program or is phase one strictly committed to locking in the initial SF1 resource footprint? Yeah, this has been a source of continuous discussion with the exploration team. We have to balance a couple of things. So, I think what we're leaning towards is that the model that we've got is working. So what we want to do is, is we've got the geophysics, we're using downhole EM, which is, which is working well. And then what we're trying to do now in the next, certainly in the next four holes up to hole nine, we'll be stepping out, you know, in, in quite large jumps, but with confidence following that geophysis in SF1, working our way towards SF2. We are looking to do some more geophysics over SF2, you know, maybe we're hoping we can do some downhole em on a, on a Yamana hole. And if we can do that then that might pave the way to do an sf hold sf2 hole it's deeper sf2 as you saw in that long section you can see the thing is plunging by the time we get to sf2 it's about 250 meters below surface so it's going to have to be a deeper drill hole so with a two and a half thousand meter drill budget we would love to i'm not going to commit to whether we say we will or not i think it depends on the success of the next holes i think the reality is if we're seeing success in these next holes proving the model and we systematically step away and can confirm you know say a thousand meters twelve hundred meters of continuous mineralization from two and a half thousand meters of drilling i think that would be a real success so i'm going to sit on the fence a little bit on that question i think i'm gonna wait and see how successful the next holes are if we're successful and we continue to hit then i would like to just keep progressively stepping out and do it systematically rather than jumping for for another prize uh two kilometers away and drilling a 300 meter hole on a bit of a hidden hidden uh hidden hope so i think then not a hidden hope you know testing a conductor at a deeper depth so yeah i think i think that's that would be my my position on that we can maybe leave that for a topic for our next webinar a few months down the road so i thank you you touched on this next question but just a few more details so how how high is your confidence that conductive fixed loop em plates directly equal high gray calcopyrite along this horizon and do you need to see full assay batch from this campaign to confirm sure there's always going to be variabilities now i think the point that lewis is making is if um you can get false positive anomalies with with em you know that that's that's uh just an occupational hazard using electromagnetics graphite for example can charge very nicely and we don't see any graphite in this system this is quite high grade metamorphism as well we're up to amphibolite grade metomorphism secondly um we don'T see um pyrrhotite on its own pyrrotite is obviously a very conductive mineral more conductive than chalcopyrite so if we were to see like a pure pyrotite horizon then that would have a very strong conductance as well but we DON'T every time we see sulfides looking at the historical drilling and looking at our drilling, it's always this mix of chalcopyrite and pyrotite so far. So therefore, whenever we have a high conductor, wherever we've intersected mineralization, it is coincident with a conductor. Now, that's not to say it would always be like that, but so far from the drilling that we've done and the geophysics that we've down and looking against the historical drilling, it is a one-to-one relationship at the moment. Okay. So this next question, you may or may not be able to answer, but looking at the tenement map sf1 and sf2 lie close to your southern license boundary is the company actively seeking to consolidate land to the south or do your current claims claims fully cover the down plunge extension yeah it's a really good question and the the ground to the South has the Brazilian process is that when licenses are relinquished they are relinguished back to the government and then they go into a phase of disponibilidad which basically means that they're almost sort of suspended pending public tender so what we will be looking to do is when the next public tender comes about is obviously we'll be we'll bidding on the licenses so it is a public auction so there's no guarantees that we'll get it but we do have a favor with the government that we have obviously the adjoining licenses and an active exploration program at the time but yeah we will be definitely looking to pick up those licenses. Okay. And have there been any penalty elements or deleterious elements identified in the early stage work at this point? Well, we haven't done any metallurgy, so we can't answer that definitively. We've just got assay sheets. So what we see in the assays is pretty clean. So mineralogically, it's chalcopyrite pyrotype, so it will be a straightforward sulfide system. In addition to that uh we've got a bit of zinc so we assume that that would be a positive we we don't know that yet we assume there will be a credit and obviously we've put the precious metals a bit of golden golden silver coming through as well but the other elements so far we haven't seen uh any significant deleterious elements in the in the assay sheet so there's we don'T see any arsenopyrite you know in the core so we we we DON'T have anything like that that we've uh let's get concerned about at this stage but we'll be doing some met work so we'll we will be able to answer that definitively in the uh you know in the coming months okay another member of the audience uh states that they're bullish on brazil uh interested in what possible outcome the election runoff on october 25th and what or how it may affect the company and i know i'm asking a geologist to comment about politics yeah that can sometimes be a dangerous situation but uh dangerous dangerous politics yeah any any feedback from you on that yeah what it's well i think what we do see is you know even with the political changes the the government is run um you know through an organization called the a and m or the mice department is run through an organization called and that is consistent that is obviously irrespective of of the government so what i can comment on is that that over decades has been stable so through the different the different governments uh over the years so we are we have seen you know a good good stability in in the mining system whether there's going to be increasing uh you know investment coming in um i would tend to think that it probably would if the if the government changes that may increase spending but the current government as it stands is is effective it's been um you know it's still uh still a great place to be to be operating so i don't think i want to get too drawn on on on the politics but uh but yeah i think that would be my my opinion is that the point is it it's in the mines department is a very clear uh manager of the of the mines systems okay and before we wrap things up can you just outline for the audience catalysts technical milestones etc over the next six to twelve months just so we're all mindful as to what to look out for yeah i mean i think it's quite quite straightforward really we've we've obviously got this two and a half thousand program now uh that will finish probably in the next four weeks so mid-november we should be should be wrapping up the drilling and obviously drill results is going to take time to to release all of those but now that we've had that long lead period from ipo to now which was obviously a difficult time but nowthat we've have that time to mobilize the drill rigs start the drilling and get the assays that's we will now start seeing uh more regular updates and more regular assays coming through from the drilling so the key value drivers is going to be on this phase of drilling then next year we'll be looking to undertake a larger program so we'd like to undertake a 5,000 meter program next year so we think that that's probably around about the meters that we need to fully test the SF1 to SF2 zone that three kilometer zone and complete the drilling over that entire zone and then declare a mineral resource estimate after that so we kind of think that that will be mid next year as our as our best best estimate obviously subject to markets subject to financing forward-looking statement but that is our best guess at the moment so they will be the key value drivers on the copper side the gold projects we will also continue to do some exploration work on those that's actually ongoing at the momento with some soil sampling at the distiro target so there will be working in the background they're not going to be at the forefront of our exploration but they will receive some attention and our pipeline will receive a good bit of work as well and then behind the main copper story there's obviously those additional VMS systems as well that we'll be continuing to explore so they're the main value drivers so it's drilling now drilling more drilling in the in the new year and then moving forward to a resource middle of next year and dann we can see where see where that lands but given the value where we are today with those those grades in the ground i think it's uh yeah some some clear value drivers coming down the pipes great well maybe we'll leave it there dan thanks very much it's been a real pleasure chatting with you today uh just for the audience to remind you that red cloud will be back again hosting another webinar on november 3rd where we're hosting a skeleton coast uranium and please don't forget about our uh the red clouds fall mining showcase coming up next week, October 28th and 29th. Please reach out to your Red Cloud rep or go to redcloudfs.com. Have a great day and thank you for supporting Red Cloud's webinar series. Cheers. Thank you.