Chesapeake Announces Proprietary Heap Oxidation Technology Updates

0:00 Hello everyone and thank you for joining this live event. Today we're joined by CEO John Paul Sosso and CMO Justin Black of Chesapeake Gold. We're here to hear their commentary on last week's news regarding Chesapeake's proprietary heat oxidation technology update. They will go over a presentation and then there will be a Q&A at the end. So do submit your questions using the chat feature located at the bottom of your screen. As always this event is being recorded and will be available for replay shortly after we conclude. With that, welcome gentlemen and I'll pass it

0:30 over to you, Jean-Paul, to kick things off. Yeah, thank you very much, Kyle. So for many of you that have been following our story, you may have noticed we had a press release last week on Tuesday during Beaver Creek with several updates on the metallurgical technology that we own. Before we jump in, just a reminder, we have some cautionary notes. We will be making forward-looking statements in this presentation. So take the time to take a look at those notes. They're also in our main corporate presentation on our website. As many of you know, the story is really a story of 3 assets within Chesapeake Gold. The first is Metates, it's a world class deposit. The second is the Lucy project, I'm sorry, the technology, which we believe will transform the precious metal space.

1:23 And then finally, our Lucy project, which is a high grade discovery, just about 60 kilometers west of Atates, that is very early stage, but we continue to see success and when we spend money in exploration on the property. We're still well-funded, we have 25 million in the bank. And as many of you know, that follow us, We have very supportive shareholders. We have Eric Sprott, our largest shareholder. We have Sun Valley and Peter Palmetto. And then Randy Reifel, as well as the rest of our board and management. When you combine all of that, that's over 35% of the equities tied up with that close-knit group. So right into Metates, why is it first class? Well, you know, it's the single largest deposit of silver globally.

2:13 It's also number 18 when it comes to Gold. So when you combine the 2, it's probably getting close to the top 10 precious metal endowment globally. The really the most important thing is, you know, this was discovered in the late 70s. Metates is unique in that, you know, most oxide, most deposits over 100M years get turned into oxide deposits. Unfortunately, Metates did not have that same experience. Metates remains a sulphide deposit and It's one of the reasons why Metatis has not been developed. In the 80s, we had British Petroleum, as well as Minofrisco tried development, also looking for high-grade veins.

3:00 In the process, they ended up moving on. And then the 90s, there was Cambior and Lewisman, who you'll probably recognize as Newmont now. They tried to advance it. They actually went down, at the time it was novel, Pox Autoclave pathway for the project. But as you'll see when we did the same thing, the economics are quite challenging. So let's dive right into those economics. So in 2016, we took that same path. We went down a POX autoclave. Pox AutoClave has very thin margins to it. And so what ends up happening is you have to increase the scale of the project in order to get that return of investment that you're looking for. In the case of our 2016 PFS, that ended up being a 90,000 tonne per day operation.

3:49 Over in the Pacific, we had a desalination plant pumping water up into the Sierra Madre for the project, a dedicated power plant, an oxygen plant, a whole bunch of flotation cells, a tailings dam. And all of that together ended up making it a 3.5 billion dollar CAPEX project.

4:07 That's a very challenging project for small companies and big companies to develop. But if you look at the economics It does look interesting. I would note that it's not showing here, but the IR was sub 10%. And so that's obviously not ideal. Most project you want 15% or greater. Fast forward in 2020, we merged with a company that had a license for a technology. That's the heap oxidation technology. And so that technology was applied to the 2021 PEA that you see on the right hand side there. The margins are much better, You can already tell by the 15,000t per day starter project that we could then expand later on.

4:54 And that ended up being a $360M capex, 0.1 of what it would be for a Pox Auto Clive, still a 31-year mine life, but only looking actually at about a quarter of the deposit, so not the full 17Moz of Gold and over 400Moz of Silver measured and indicated. But you can see here 147,000oz Gold equivalent, Just the Gold on a standalone basis, 112,000oz. That's actually a number 11 project for mining according to 2025 numbers for production numbers. So it's a meaningful project in Mexico. And then on the silver side, it would be about 2.5Moz of silver. So very exciting. More details, obviously, on this side, you can see that

5:43 the assumptions for metal prices here, $1600 gold and $22 silver back in 2021, gave us a $1.1 billion NPV at a 5% discount and an IRR 35%, so really good return. And as I talk about the cost, you can look at the all in sustaining cost life of mine, it's about $750 per ounce. So that's a first quartile. So very cost effective operation.

6:12 So as I mentioned, the technology is to address this trapped precious metals and sulfides, in our case, most of it's in pyrite. In nature, as I mentioned, takes 100 million years to unlock. And we've been able to determine what chemistry of the nature is to do that, and we've been able to scale it to within a few months. And so the real test of the technology has been on Metates over the last 5 years, but we also identified that there are numerous projects globally that are the technology could be used. And we did our own internal list of over 200 names, which we're looking at to do test work on. And just to give everyone an understanding of how big this market is for this technology, if we were to commercialize it, There was a report out by McKinsey and Company back in 2021.

7:07 There's 2.6 billion ounces of gold in safe reserves and resources. a quarter of that, 580 million ounces. If you run it on $3,000 gold price, that's a $1.7 trillion market. So it's quite a large market. And because of that, we have made efforts to consolidate the technology, which was done in 2024. The whole technology is 100% owned by us. All the IP, the full entire patent portfolio. We actually have continuously been filing new patents to further protect all the innovative developments that we're doing. On the team-wise, we have Randy Buffington, who was the original inventor. He's the chief technical officer, sorry, chief,

7:52 the chief of the technical committee. Then we have Justin Black, our chief metallurgical officer. And then we also have Art Labrado, who is the QP on the technology for the past 10 years, and he's obviously working with us too as our QP. And so we have everyone that is an authority in the technology working for Chesapeake, which gives us the position to continue to advance it and to execute on our plan to tap that 1.7 trillion dollar market.

8:21 So I'll drop it to Justin Black to go over some of the results from 2 years ago and the results that we've had just 2 weeks ago. Yeah, So to explain how we've achieved those improvements in economics, you really need to just look at the recoveries of the ore coming out of the ground. So when we look at Matates, just mined in it, treated in a heap leaching environment, We're really only getting about a third of the gold and silver. And our results from 2004 show that as we oxidize, we're able to continuously improve those to, in 126 days, 50% gold recovery,

8:56 146, almost 60%. And then after a full 204-day oxidation, we're at nearly 75% recovery. This is the basis of moving from an autoclave system to a heat, being able to improve the recovery that much while keeping the capital down.

9:14 It's substantial for Mitates and then some of the other projects that JP mentioned on the list, we know that we'll be able to do similar things. But for this graph, it shows that we still were at about 50% silver recovery, which for a deposit as large as Metates on the silver side is something we really need to improve. So we'll talk about our recent results where we do make some important headway there.

9:42 So what you can see here is a depiction of the Mitates deposit on the bottom left. And on the right are 2 graphs that represent the domains shown in that depiction. So the top is our massive intrusive domain. It makes up about 85 percent of what we expect to mine. It compares to the previous graph from 24. And then the bottom is the other 15% that we plan to use the heat oxidation on. It's our intrusive regimen. Each set of bars is 1 phase of testing that was conducted over the last 5 years. Phase 1 is the far left. That's kind of our first blush at applying technology to metates where we saw some potential, but a lot of improvement needed. Then in phase 2, we extended the oxidation time from 180 days you saw in phase 1 up to 240 days in phase 2.

10:32 And part of that, you know, there were process changes and an extended duration of oxidation, but we really did see improved recoveries, and we knew we had more to build on. So, what we've just talked about in our press release from last week is our phase 3 results. They cut the oxidation time down significantly in our initial columns down to 90 days and still maintained the improved recoveries, even pushing silver past what we've been able to achieve in previous rounds. Silver, JP will get into this more, is a very big part of Mitati, so every percent recovery is a pretty significant improvement to our bottom line. But really, the oxidation kinetics improving, cut in 0.5, essentially, takes our working capital, our operating costs, and our initial capital all down because it shrinks the size of the oxidation pad we need to build. It reduces the time you wait to get that first bar of gold or dore out.

11:31 And when you're running the pumps less, you consume less reagents over the course of this. And all in all, it's just an improvement. Mitates costs every way. And the recovery improvement obviously doesn't hurt. Yeah. So just one more thing on the intrusive pressure, even though it represents a small 15% of the material that would go through the process, we continue to work to improve the recoveries. And you can see with each successive phase, the recoveries have improved.

12:04 And then we had the similar effect between the 2nd and 3rd phase that we're able to decrease the number of days of oxidation required. So that's a significant movement as well. And all these were accomplished in the first few rounds or the first few columns out of phase 3. We cut some of the columns short because we knew that we'd done something to improve kinetics. And in order to prove that, we had to have some columns that weren't run for the full 180 days. And so even in that shorter duration of oxidation, we matched the recoveries,

12:33 which shows kinetics improvements are part of it. And then we will be releasing in the near future results for columns that did run 180 days to see how far they push recoveries. The other thing we did in phase 3 was we approached metathases not just from a how does deoxidation work and development of technology, but also on the whole, how do we improve metathases. And one of the important things we did was take a look at HPGR crushers as the option for generating our crush material for the heat. And just from going from a jaw crusher to an HPGR, we saw a 16% improvement in gold recovery and a 23% improvement in silver recovery, which are really a great starting point for what we're going to see on the heap.

13:22 And it leads us to the obvious optimization phase, which will be probably our last big round of metallurgical work, where we will combine the HPGR results that we've got here with an oxidation step afterwards and see, what are the limits, how far can we push recovery at Matantes and in general, what's the optimized heap look like? Yeah, I guess the one other key point would be that the size of the actual crush is actually the same in both techniques. We haven't changed that. And the benefit that we're seeing is that HPGR is taking into consideration the imperfections in the actual crystals. And those imperfections are where the precious metals are actually lying within the pyrites. And so they're actually fracturing on those points to allow the actual chemistry. In this case, it was just a cyanide heat bleach that was done on it to access those metals.

14:17 So when we oxidize it, then that we expect what we see here to improve significantly. That's right. The last piece on this slide is kind of important to point out are those 6 little circles at the bottom that are really just used to represent the third-party projects that we have in the lab already. Some of them, 3 of them, in fact, we've been working on testing and amenability for over a year now. The columns are complete. We're really just in the data validation phase, and we're just really near the end of that part of it. So we'll be able to talk soon about how those tests went, which is an exciting thing for me. And in addition to that, we've added 3 more projects to the lab within this last year, 2026, that have started. And we think we'll continue to add more to that pipeline over the coming months and years. And it should be something that's kind of exciting for people familiar with the industry to know about the sulfide deposits that are out there, been sitting idle. And when we can start to talk about what we think will be a pathway forward to them, you know, I'm really excited to have those conversations.

15:32 So just a reminder for our audience how this all fits together in the big scheme. So you'll see, you know, this is the Metates PEA project layout. And you can see the pit here, which is that concentric circle area. And then the large green area was a three-stage crush to get it down to the size that we require. And then the material moves along the conveyor over to the heap oxidation pad. As a reminder, just envision it as being a pad that has 10 cells on it. The first cell, the material, fills it up 20 days. Then we go to cell number 2, we fill it up 20 days. Once we get to cell 10, we fill it up 20 days. That first cell has been sitting there for 200 days receiving the special chemistry and oxidizing.

16:24 And then we go back with a rotary shovel, pick up the material back onto the conveyor, and then that material would then be conveyed over to the heat bleach pads where it'd be placed for the rest of its life. And then at the bottom, in our case, because of the silver content, we have Merrill Crow and then a foundry to capture all those precious metals that have been oxidized and easily available.

16:47 The one thing about the first 3 parties that we have in the lab, we specifically chose those 3 because they're all either an existing mine that's running out of oxide or a mine that has run out of oxide that's been care and maintenance, or then the third one is a mine that had been abandoned, but a group of investors has come together, saw that there's still some oxide there. They want to restart the oxide, but then there's a much larger sulfide deposit

17:18 that the technology be applied to. So all of the cases that we're looking at in this phase, the key thing is here, they have the pit, they have the crushing, they have the heap leach, they have the Merrill Crow or ADR plant and a foundry. The only thing that would be required is this heap oxidation plant. And then that would be a much lower cost to install than in the case of Metates where we have to build everything from scratch. The other part of it is they have permits in place. So to expedite the technology for any of those 3 sites would be much quicker. So the other thing we'd like to highlight is the ESG aspect of the technology.

18:04 Again, these are BEREC's numbers from their 2024 sustainability report. And so you can see here I've done a comparison between Pueblo Veo, which is an autoclave system in the Dominican Republic versus Veradero, which is a heap leach system in Argentina. Barrick does a wonderful job of, when they measure ESG characteristics, they do it the same at every site. So you know that when you look at these 2, it's comparing apples to apples. The only difference between the 2 is the actual technology that's being used to recover the precious metals. So you can see here, Pueblo Valle, the water consumption is much higher than Veradero. It's 10 times. So in the case of our technology, we would require the tenth of the amount of water to run our operation.

18:55 In the case of energy use, the chemistry is actually putting the energy in the system. So it's a third of the amount of energy that's required and everyone knows that energy is a scarce resource. And then finally, GHG emissions, we're always trying to reduce that. In the case, the technology would be 0.2 of the GHG emissions as would an autoclave system. And then finally, because there's no flotation, there'll obviously be no tailings facility at Metates or any of the projects that run it. And so that's another environmentally friendly option. So this is why we've considered our technology to be green gold.

19:37 And I'd like to say that if you look at other technologies that are out there, whether that's a roaster or biox, All of those technologies all require some form of flotation. Even if you were going to do a flotation and ship that con overseas to some refiner smelter, in the case of ours, we don't need flotation. So the water use is much lower. Because we're not running a roaster, an autoclave, or some refiner smelter, the GHG emissions are much lower and the energy is much lower. And in the case of biox, obviously, you still need to flow to concentrate. And then you're reliant wholly on a set of bacteria to do all the work. And as, you know, some people would testify, if something is off, whether it's the pH or another parameter, and you lose that colony of bacteria, then it's very difficult to re-impregnate it and get it going. So in our case, it's all chemical. So the risk has been removed in that case.

20:42 So it's a much more robust way to extract the precious metals. Jesse? Yep, the last thing here, we talked about how we really only have the first piece of the phase 3 data out there in public and What we have out are a few of the smaller columns on the right. They were the ones we cut short on oxidation time to prove kinetics. All the other columns you see pictured have been completed since then. They ran for the full oxidation time we scheduled, And the results are data validation coming soon. We also have the large columns on the left. They were stacked to the full height we intend to use for the actual operation, 20 feet. They were run for the full 180 to 200 days that we scheduled.

21:32 And those results are coming soon. There's a lot of material in those columns. So from a lab perspective, a lot more time to turn it around and get the assays, but we're making sure that everything is absolute perfect quality, you know, no questions by anyone so that when we come out to talk about the results, we have full confidence in what we're discussing.

21:53 So this is just kind of a summary of all the projects that we have. Obviously, Justin highlighted the upcoming updates for the remaining columns for the third phase. We also have the third party test work. Those results were in the validation stages well for those. And so a lot of that work will be, you know, updated to the market shortly. We didn't talk about Lucy. Lucy is that high-grade deposit. We had the team out in the field over the last year doing soil geochem samples because we realized that it's a good way to identify the surface footprint.

22:33 That work is nearly completed and we'll likely give an update on Lucy shortly. On the pre-feasibility study, a lot of the work that Justin and the team have been doing with the phase 3 test work, the large diameter columns, that's all feeding in to the pre-feasibility study work and workflows with regards to it have been advancing. We're trying to make sure we have all our ducks aligned for the pre-feasibility study. Again, the one thing that we're waiting for that's contingent would be the San Vicente III concession, which remains in the court system at this stage. And then alongside that, once we move things forward, we'll be pushing towards permitting the Tates and advancing it to feasibility study as well as construction in the future. So those are kind of the high level updates.

23:28 We're happy to open the room to questions.

23:32 Great, thank you gentlemen for the thorough presentation. As a reminder for anyone who's on the call, this is a Q&A session now, so please feel free to submit your questions. I see there have been quite a few already. I would like to just kick off, and maybe Justin, you can answer first, but I'd love to hear both of your opinions. As this is the week after Beaver Creek and this news came out right around Beaver Creek time. So what were your own takeaways from phase 3 and how did they land with the people you met at Beaver Creek? Yeah, sure. So obviously I'm very excited about the results from phase 3, and I think it was probably palpable for most of the people I talked to. The ones who were familiar with the story really understood the importance of what we'd done, especially with the oxidation time. And then for the people that were new to this story, it was really nice to be able to talk about that 90 days rather than 180 as the initial potential oxidation period.

24:30 It's a little less of a sticker shock, I'd say, when you think about 0.25 instead of 0.5 a year. So having that recovery improvement, everyone understands that that's something that's part of every mind development is figuring out how to take what you got and get better and better results out of it. So the progression that we were able to talk about in our metallurgical results landed pretty well, I'd say.

24:53 I would say also the execution on the third-party test work. You know, there's always a question whether there's actual interest in it. I would say half of our meetings were with companies that had the update, you know, realize now there's 6 companies in the lab testing the technology and so we're looking to continue to grow that pipeline, adding you know, companies of various sizes. We do have some larger companies and smaller companies in there right now, but continuing to grow that pipeline as being an actual other pathway through the commercialization to bring value to our shareholders. Yeah, to JP's point, there was definitely more discussion in the industry and amongst the attendees about our technology than there had been in previous years, just because it's been out there for a little bit longer. And I think the message is, it's not saturating, but it's circulating. It's something where we have a good foot in the door when we start a conversation.

25:51 Now I have a question for you, Justin, and it may sound silly just because it is proprietary, but what changed in the test procedures to make that possible, the reduction from 180 to 90 days? Sure. You know, obviously we're continuously refining the technology to execute it in the best way we can. And without getting into too much detail, I think the 2 biggest things are, 1, we've got a cure phase at the start of oxidation now. That's obviously been very effective in keeping solution and oxygen and all the required elements at the surface of the pyrite phases to get that oxidation done. But we've seen probably 75-80 percent of our oxidation progress happen in that first cure period. That's a huge contributor to the kinetics. The other part is we've kind of refined our solution management to match what we think we'll see in the heap. And in so doing, we've seen just better continued oxidation because we've got the reagent conditions where they need to be and then the conditions in the column, I guess, matching, which is somewhere we've seen a lot of success in previous iterations of the technology where the bigger scale and the clean solutions continue to show results for a longer period.

27:13 Yeah, so there's been a few questions upon registration. I'll ask a few of those as well. The one individual writes, 2 issues known about the deposit to me, open pit ban in Mexico and accuracy of economic estimates for cost of oxidation processing of refractory or I'll leave it open to you to provide. I'll let JP talk about the Mexico environment, but just real quickly, you know, part of the reason we do all these metallurgical tests is cost and recovery, that's what will feed the mine plan. And so we've developed a continuously improving model on what the costs are going to be. Part of the technology is a regeneration process on the reagents that we use to support the oxidation. And we've run a pilot on that in the last year, which obviously helps improve our confidence in the costs we're projecting.

28:05 And we're doing additional work. The engineering background work we're doing for the PFS, part of that is logistics on the reagents and the equipment and all that that supports what we'll do in the oxidation. So, you know, it's easy to say that the cost predicted in the lab 10 years ago may not be accurate, but at this point we've got almost 10 years of development of technology and for each project where we want to use it, years of looking into logistics and supply and actual consumptions. And so our confidence continues to grow in the cost. And the next time we publish that, which will probably be the PFS, I think it'll be a number that people can put some trust in. With regards to open pit mining in Mexico, I can understand there's some hesitancy.

28:53 I think the last mine that got permitted before this new administration was Camino Rojo, and that was a long time ago. There was very little projects that were permitted. Since this new government has come in, they had, you know, 260 plus projects that were in permitting limbo. Of those, 90% of them have actually been advanced and permits have been granted.

29:22 The first indications that the situation was changing in Mexico was actually within the first few days of Claudia's inauguration. The pledge to ban open pit mining was removed from our 100 pledges. The need to realize in Mexico that if you ban open pit mining, that means all aggregate mining would also be banned. Their Lithium resources are near surface and that's a really strategic resource for them. So I'd make it very difficult for low-grade Lithium to be mined without open pit mining. And then actual physical evidence of improvements. We can go back to November of last year, Silver Tiger got their open pit mining permit.

30:09 It was the first one since Camino Rojo, and that one starts as an open pit and then goes underground. Just in the summer, this past summer, Minerals Almos or Mining Americas, I believe what it's called now, they got the Cerro de Oro project permitted in Zacataccas. That's another open pit mine. And so that's another amazing move forward and a visible tangible example. And then Agnico and Tech, they've been trying to advance the San Nicolas deposit. Again, this is an open pit going underground and they as well got their permits just a month or 2 ago. So these are prime examples, very visible examples of open pit mining moving forward.

30:58 They've always said if it's a strategic asset that deserves to move forward and the team is doing everything it can, both on the social licensing side and the environmental side, that those projects would get permitted. And I would definitely argue that Metates as being the single largest silver deposit in the world and being 18th when it comes to gold. That puts us in a position where it's a strategic asset in Mexico. And so we're very hopeful that Metates would be permittable. Excellent. Thank you for that. Obviously, the technology is a very interesting spoke in this wheel. An individual wrote, I purchased the stock for the Matates assets. What options do you have to monetize the proprietary process for the benefit of shareholders? And how would you separate the value from the mining assets?

31:55 Yeah, yeah. So, you know, the technology when we actually purchased it and brought it in-house, it was intertwined with Metates. The only way for Metates to move forward is with the technology. And we believe that that is the case. That's the only pathway to advance Metates in both a economic way, but also an environmentally friendly way. But along the path, we also realized that the technology has an application on those third parties. And so we've really been, we built out a strategy, we acquired the technology, brought it all in-house, brought the people because we wanted to really execute in that strategy. So you can already see the early days, we have 3 in the lab that have been there for, you know, over a year, we have 3 more that are lined up. We are in discussions for adding more to that pipeline.

32:45 With each project, you know, the way that we're looking to monetize is with any sort of technology, licensing agreement would be the likely pathway where we work with the team, we put the technology in the asset, we show the economic benefit, and then it's very similar to a royalty where we'll have a royalty. And then as we're operating the technology for them, there'll be a cost plus on that for operational costs. And then finally, we're looking at the Delta recovery and see if there's an opportunity there. There is the other pathway and technology companies in the copper space have been doing that. There's no overlap in what we're doing and they're doing. But in the copper space, they also, you know, in some cases, take an equity stake in the asset.

33:34 And that is another option that we'd be able to consider. So either pathway on either side of the spectrum or some hybrid in between. It depends both on the company that we're working with and what's the structure. It'll depend on the jurisdiction. Is it a mining friendly jurisdiction with a good rule of law, with strong property rights and social license? Then, you know, being a part owner or having a partnership with the actual company would be 1 pathway that would be ideal. If it's in a location where it doesn't have all of those characteristics and it's very challenging, I'd rather be a passive investor in those situations and take more of a licensing agreement, removing the operational risk.

34:20 Great, well said. Let's go into the live Q&A here. There's a few questions. We have Adam's two-part question, and I'll direct it to you, Justin. When will you start any pilot plan for technology?

34:34 And the second question, I believe you mentioned it in the presentation, 20 feet high, if I'm not mistaken, but how high can the oxidation pads be for the pilot plan? And can the IMPREZ Kinetics change the height? Yeah, okay. Those are good questions. So I'll start with the oxidation pad. So we're targeting 20 feet. It's just a familiar height. You know, when we ran this at the original property where the technology was developed, we were looking at 20 feet height and it worked very well. So we've stuck with that since. I think that there's certainly an opportunity to go taller. I probably wouldn't mind going shorter either because there's certainly more air that gets in the smaller your surface to volume ratio gets. But I think that what we'll do is stick with the 20 feet, and then as the kinetics improve, rather than getting a taller or shorter pad, we'll shrink the square footage, which will, of course, reduce the footprint on what's already a somewhat tight mine plant of operations.

35:37 And it also reduces the capital to build that initial pad so that we can essentially double the throughput if we want to scale up the throughput rate without taking up too much more real estate. So the key on the kinetics is that we can shrink the oxidation pad. The other part of that question, what was it Kyle? I'm getting to- The pilot plant. Yeah, the pilot plant. So that's an exciting thing for me. We'll make the pilot plant with the same heat pipe as the oxidation pad that we tend to use for production. So we'll go 20 feet. You know, if I were just throwing around numbers, Let's say we do something like 10,000 tons per month or something much smaller than the scale of the operation so that we could get it permitted under an accelerated pilot plant pathway.

36:27 But then we think would still be representative. You know, we'd build a heat that's something you could take people to, say this is what the technology looks like in practice, or here's a Dory bar that we've created using it at this scale, and it's something that we could run continuously. So we've already actually engaged an engineering company to help us develop the plans, seek out used equipment in the area in Mexico to get a cost effective build out. It's something that we're still in the planning stages, but I love, best case, we can break ground sometime in 27 or at the very least have a plan and permitting underway. Cause I think it's something that either at Matates will be very beneficial to do leading into the actual mine build out or with one of our partners where we're starting to show that the technology works very well.

37:17 We can, you know, as JP mentioned, their existing mines with infrastructure permits and all that, we can maybe get something going at one of their sites earlier even than we could in our own. Follow up question here from a fellow attendee. The oxidized material will be a sloppy mess filled with acid and oxidation precipitates. Have you done a heap leach permeability study? What are the line costs to neutralize each and every ton of ore?

37:45 That's a great question. The acid isn't actually a big problem. So, an important thing to remember about the technology is we're using the, we're doing the oxidation in an alkaline environment. We add a significant amount of alkaline reagent that's not lined with the calcium to do that neutralization as the oxidation takes place. You know, we maintain a high pH during the oxidation. So the acid production is obviously a big concern with sulfite leachant. A big part of the reason why ours works, obviously, oxidation is doing what it needs to to liberate the metal, but our chemistry is also doing what's needed to neutralize that acid generation potential in that material so that when we transfer it to a cyanide pad, we're not looking at a continuous drop in pH. Because It's very hard to have lime mixed into that material that actually activates over time as you need it. It usually passes and just sits there. We do add some amount of lime for that buffer effect, but not more than you would add on an oxide heap.

38:43 And that'll help maintain the cyanide conditions. The other part you asked was the precipitates. So because we're not adding that calcium in our oxidation, we don't have a problem in the oxidation heat of the precipitates that cause plugging. We deal with the byproducts that come out in the solution phase and our ponds and our regeneration, important part of the technology. And then we've removed those byproducts from the solution or rather we've kept it in a separate circuit, Oxidation circuits here distinct from cyanide circuit. So the acid, the byproducts all that we produce is kept away from the point where we add the lime, which is usually where you see your calcite, your gypsum, the other things that pass through the surfaces and really muck up a heap like you described. So those things have all been taken into consideration from the very core development of the technology.

39:36 Great, thank you for that. Jack's wondering, how long have you been working on developing this technology or approach? And his follow-up question, approximately how much has been invested and how was it funded? Yeah, so it's been over 10 years. This technology started in 2014. If you take the predecessor and you take us, I'd say 50 million has been invested in advancing this technology. So there's been a significant amount of money put into it. The predecessor did a lot of work on the technology. And then subsequently, we've done a lot of work as well over the last 5 years. So all of the work just so everyone's clear, it's not just in turning the dials at the lab.

40:22 We write up procedures, we give it to the third party lab. They follow those procedures. And then when we get those results, it goes to our QP, who then does the validation and verifies the results. And so Justin and our team is not actually touching anything, we provide what's outlined in our patents to the team and then they follow that and we get the results. And so it's only after we have results then we start to do some more innovative development and finding other solutions to advance and see this, you know, jump from 240 days down to 90 days. All of that stuff is all of the other work that comes into it.

41:04 And again, just for everyone's sake, all of this stuff is protected under our PAN portfolio. So we're very excited with all the work that we're doing and anyone that is deciding to invest in today gets the benefit of the 50 million that has been spent over the last 10 years. And right now we're at a spot where we're actually starting to show those results and all the hard work. And just to confirm, John's wondering, Do you own 100% of the technology? I seem to remember you made a payment to Highcroft for technology sometime last year. Yeah, so that was almost 2 years ago. You know, we paid 5 million. It was 2 million in cash and 3 million in Chesapeake shares. That's correct, We own 100% of it. We own all the technology, all the patents and everything. So it's fully within our wheelhouse.

41:55 And yeah. I can also say everyone who was involved with the development is involved with Chesapeake in some way directly. Myself, Randy Bovington, and as JP mentioned, Art Abbrado, we're the kind of surviving members of the team that developed technology and we're all here making it work. The Mitates were in our third-party projects. Great, thank you for that. One last question in the chat here. Will you wait for a combination of HPGR and technology for PEA, PFS? So like I said, we're underway on PFS and I think that the results from phase 3 are going to support a very good looking project economically and from execution. The combination of work, you know, I did talk about an improvement in 90 days, kinetics for oxidation, but when you layer on, you know, material prep and leaching and all that, you're looking at several months for that program still. So I don't think we're going to let that hold up what we've already got for the PFS, but certainly the feasibility, which I think

43:00 We'll be working on that in the background once we get the PFS out. We'll be supported by that combined work, which will really show the optimization. Now, I don't quite know what Jeffrey means by this one, but San Vicente seems like a hit job. Can you shed any light? Yeah, it's hard for me to say exactly what the thoughts were when they were evaluating the work we did. I guess it's over 4 years ago now. Just to be clear, I've said it on several of these events in the past, we always pay our taxes for all the property and we have to do that twice a year. And then subsequent to that, we have to file a report showing the work that was done on the property.

43:49 In the case of the work back that year, 2022, 2021, the work that was done, there's ample amount of evidence of the work being done. We drilled a hole on there. We have the core, the photos. We had to do the site reclamation afterwards for that hole. There's many ways for you to see that the work had been done. And I'm not sure what exactly happened because I wasn't actually with Chesapeake at the time, but it is my understanding that for whatever reason they felt it was insufficient. We did invite this individual to attend a site visit to see everything. As well, we provided detailed receipts with all the work that was done, and they still believe that that was insufficient.

44:41 So what I can say is that right now in the legal process, we're right now at the collegiate court level. We filed an appeal just over a year and a half ago, and it's been a significant amount of time,

44:59 expect maybe a result from this appeal maybe before year end or early next year. And then, we have not been just waiting for the legal result to come through. We've made significant inroads at the various levels of government in Mexico. As you'll probably see last year, we announced that we extended our community agreement for expiration for another 5 years. Our community has been extremely supportive. We have social license. They've even written letters in support of what we're doing in the project. The municipality as well, they've always been very supportive. The state of Durango.

45:40 And recently we were invited back in August to give a presentation on metates and the technology at the Durango Mining Forum. That's a forum that happens every 2 years. So there's not many people that get selected to give presentations. And both Jess and I had the opportunity to explain the importance of metates, all the work that we've been doing in the local community, building schools, fixing roads, electrifying the local community that's around the project. And so all of those things, we got a chance to highlight and then the economic benefit, the number of jobs that will be provided, the taxes and royalties over the 30 year mine life that we have in the PA outlined. As well, we had a chance to talk about what the technology can do, not just for Metates, but Metates as an innovative hub for the technology.

46:35 And so companies all over the world would come to visit Metates to see the technology and operation when considering to put it into their own projects.

46:45 And that includes, you know, there's over 20 names that Justin and I have identified in Mexico that can apply the technology. Maybe some of those are in the third party test work we're doing right now, but all of those mean keeping operations online. So that's the continuation of jobs, taxes, local suppliers to those mines. It means that new mines can be built like Matates, but it also means that mines that have been closed, you know, 10 years or plus can be restarted. And so this is a significant opportunity as we continue to advance Metatase as well as the technology. And so we're getting a lot of support for the work that we're doing. And we're very hopeful that there'll be a way for us to solve San Francisco State 3.

47:33 Great, thank you. I think we'll wrap up here with a final question and take this as your closing remarks. So I'll pass it to you, Jean-Paul, but treat this as closing remarks because it is about timeline. So feel free to talk about any outcome on catalyst. But the specific question John has is, what is the timeline for PFS, DFS and FID? Yeah, yeah. So right now, we're still waiting for the final results for phase 3. So those are coming, we're just in the validation phase. We expect those to be out before year end. We're hoping much sooner. Over onto the pre-feasibility study, it's always been contingent on 2 things. One is the technology, which we believe is now going to be at pre-feasibility level. And then the second is San Vicente 3, which we continue to advance for the recovery.

48:25 Following that, once that's all in place, our team would be running towards the next step, which would be the feasibility study. We would likely try to push that out within a year and a half to 2 years. There's still some work to get the whole project to feasibility level, which would include some drilling and then additional work, which we've already started on the metallurgical side. And so all of those things will lead into that. And then alongside that, we'd be permitting the project and then looking for financial partners at the completion of the feasibility study. And so internally we're advancing as fast as we can, but alongside that, I would not forget that the third party test work, a lot of those opportunities might actually be closer to fruition just based on the stage of the projects that we're looking at. And so a lot of that work, I think that we have now this pipeline of news and updates and catalysts coming both on the third party test work, And just to plug in there about Lucy, because we don't talk about Lucy very much, but Lucy, we see that every dollar that we spend in Lucy, we get a great return for that. And we're going to continue to move Lucy forward.

49:45 But our capital priorities for allocation continue to be Metates and the technology.

49:50 And then Lucy is always a results-based investment. Great. John, thank you so much for the presentation. Congratulations on this update. And until we speak again, But for people that joined a little late, this is being recorded. I'll have our team get it ready for replay shortly after we conclude here. Give us a couple of hours. But thank you for your questions. It always makes these events a lot more enjoyable. Guys, thank you for the update. Really do appreciate it. Okay, have a good one everyone. Bye now.