Hycroft Expands Vortex High-Grade Silver System

0:04 I will say good morning, good afternoon or good evening, depending on where in the world you're shining in from. I've got with me today, Ms. Diane R. Garrett, CEO of Highcroft Mining and Alex Davidson, the company's chief geologist. Folks, how are we doing today? Good. Excellent. Awesome. Better than good. That's perfect. So I've got some questions about your most recent news release because I think it's so exciting. Alex, I'll start with you, but Diane, I'm eager to hear your take on each of these questions too. But Alex, Hole H25D6070 returned 30.8 meters at 438 grams per ton of silver, which is crazy to me. Your team is calling these the highest grades with the best continuity we've seen at Vortex over 2 years of drilling and one of the coolest returns I've ever seen. So what does the intercept like this tell you about the system you're dealing with and how does it change your understanding of Vortex's potential?

0:56 You know, I'll tell you, we were all very, very surprised to see this whole come out. We were expecting similar grades. You know, Vortex normally runs about 200 to 250 when we're in the good high-grade zone grams per tonne Silver. And then to pull this out, we recognised right away when we could see it. Of course, very visible silver, very pretty to look at. So we were quite excited to see what that was going to turn out. And then we were really blown away by seeing the grades. And I think what's kind of stunning for us is Vortex is a little more spread out, so you have a good high grade, a little bit of low grade, a little high grade, a little low grade. This is a nice tight package of high grade all together.

1:50 It is telling us that we believe that what's going on is this high grade is associated with a structural zone, an intersection of a high angle fault with our low angle vortex and it's blowing out. So what we're seeing is more structural prep and it's open enough territory, down dip and a long strike of this structural intersection. And what's really exciting about it is the next hole we drilled after that and offset to that, again, looks quite visually promising. So we're really excited to get the assays back on that one too. So the zone is opening up and I can't wait to see what we get to here in a little bit.

2:45 This is a nice one, Yeah. No doubt. Diana, I'll throw it to you if you've got brief thoughts on that whole... Well, I think Alex summarized it excellent. I mean, I was just at site last week. I looked through all the core, talked to the whole team, and Alex's enthusiasm is certainly spread throughout the department. This is really exciting stuff at Vortex, and it just says that this story is far from over. You know, Vortex has always been lower grade than Brimstone, but we see this high grade system as expanding significantly in the future and also that we don't think it's just confined to Vortex and Brimstone. And the team's doing a lot of work looking outside those systems for other similar type areas that have structures that look very much like this. And the team has really unraveled, you know, what is controlling this mineralization. So We just couldn't be more excited about this year's program building on the back of last year. So it's great news. No, awesome. And I know this whole extended mineralization, 75 meters down to the west and open up targets to the north and south that have not been drilled, which is exciting.

4:02 So Alex, I'll throw it to you. When you look at Vortex's current geometry, a kilometer down dip and 500 meters east to west, how much running room do you see in the system and where are you most eager to drill next? I think that's a fun question people wanna know. Right, yeah. So Vortex, we know mineralization is coming from the west. It's going up dip and traveling to the east. So, the driver for us is to continue to the west. We have to look at the structural intersections of these high angle faults that we've known about for a long time. They're been a big part of the high crop system.

4:49 Looking at those and continuing down the trend, that's the goal for Vortex. What's really interesting about this is there's still opportunity north to south along these structures that we weren't really sure of. So this is opening up a little bit of new territory for us. So a lot of work to do here. This is still early days, still going through, learning what the next holes looks like and how to target those intersections. Sure. Yeah. Now I know you're running 2 rigs simultaneously at Vortex and Brimstone.

5:37 At Brimstone, you've drilled into a potential feeder system identified by geophysics with over 600 meters of strike length. That's significantly under drilled, in my opinion. Your team mentioned seeing mineralized veins visually in those holes. So without getting ahead of assays, which I don't want to do, what has you, I know your audience loves to see you excited, Alex. What has you excited about what you're seeing in the core? When we drilled the anomaly, we really weren't sure how it was going to go. We're really excited. We knew that there was something big there. The geophysics is showing us there's an obvious thing that you absolutely must drill, but we didn't know what we were going to get into.

6:25 When we drilled across it, there's loads and loads of pyrite at the top of the hole, And the anomaly indicates there's a chargeable feature there that lights up, and that's pyrite. And we crossed gobs of pyrite. I think it's important to note that at Highcroft, you don't get gold without pyrite. You can have pyrite without gold, but at Highcroft, you don't have gold without pyrite. So that's an encouraging thing for us to see. And it's an obvious visual thing to look at in the core. So we're really quite interested to see what comes out of those assays.

7:13 When we got down to the target area, we crossed good alteration. We see veins. We're seeing veins that are mineralized with silver, so that's encouraging for us that tells us we're still in a system that has mineralizing fluids going up dip. So that we know that we're not through the boiling zone. We know that there's been multiple mineralizing events at Highcroft. As the water table went up and down, our boiling zone moved up and down as well. So what we know that we're still in the mineralizing zone.

8:06 We still have mineral below us and we still don't fully understand the breadth of it. We only have a couple of holes into the system, and there's just loads to learn yet. We have the full team is engaged. We're doing new things. We're running our core through hyperspectral. We're doing directional drilling. We're doing everything we can to get back into the target as fast as we can to try to understand what's going on. Sure. Yeah, it is really exciting to see that there's still lots of high fluid flow moving along that's got mineral on it. Sure. One thing I want to talk about is the directional drilling technique that you're using, you know, wedging off a mother hole at 300 meters to access multiple targets.

9:00 What I think is so cool is that it's saving you 2 weeks per hole and cutting pad prep and asset costs. So how much does this efficiency gain, stretch your exploration budget? Is this approach being standard practice at Highcroft or What are you guys up to? Yeah, this was a new thing that came to us this year. It's the first time that myself or any of the rest of our team have dealt with directional drilling. This was an opportunity that we wanted to jump into just to see. And we did knock off several days of drilling. The top parts of the holes can be challenging to drill through.

9:47 So stepping through that and being able to get into good solid rock and drill to your target at a much quicker rate was something that was very appealing to us. And it was successful for our very first hole. Doing this, it was brilliant. So we're definitely going to look to do this again in the future. We do think that it can knock off as much as a week to 10 days of drilling time in challenging ground that will really reduce our costs. The big part of it is that's 300 meters of sampling that we don't have to do.

10:38 I don't know what our cost per sample is, but it's significant. It's going to be a big run that'll allow us to do other testing on this core at a lot less expense than what we've been doing. So I think this could potentially add another couple of holes to the program. No, it's exciting. Yeah. I'll say one thing I wanted to talk about while I've got you on the line. You got that manganese target in the Brimstone High Wall, the oxide gold silver target that could factor into a heap leach restart, which obviously is sexy and fun. But how does this fit into your broader development thinking as you advance both the milling pathway and the high-grade discoveries?

11:28 What's up next there? So manganese is a really interesting target. We have 1 hole in it that we drilled in 2024. It has significant mineralization along structure. We need to develop that target. So our plan this year is to get an RC rig up there. We're going to pepper that with 8 to 10 holes, potentially 12 holes, to try and develop that a little bit more. We need to understand the geochemistry. We need to define the structural intersections. There's a heap of work to do there.

12:17 The idea for us right now, manganese originally was in, it is in the resource for mining. It's not a resource, it was waste. If we can turn this into an oxide ore, that can have profound implications to the economics of our project. It could really be a big thing to turn what we had considered waste and into ore. Yeah, that goes a long way and at surface. Sure. That has a profound effect on economics for us. Yeah, right on. Yeah, and I just add a comment on that if I may, Romeo, when we talk about the heap leach opportunity, we're looking at that right now. We do have an RC rig on site and it's drilling up in the Bay area.

13:13 Bay was the highest grade of the deposits at Highcroft historically, and that's where all the mining began. We do have some good leachable material up in Bay, but there's been some gaps. And so we're coming in and filling in that drilling. So Bay itself will drive the decision to restart the heap leach, depending on the size and how much we have there. And then the manganese target, it does have other work, but it can also provide an extension of that heap leach life. So we don't need all the manganese target results to make that decision. We're hoping to have all of the heat leach analysis completed and kind of end of first quarter next year somewhere thereabouts. We're doing some quick metallurgy on it because we are in an area where we have fresh oxides, but we also start to get into transition. So we need to understand the difference between those 2 because they each recover differently on a pad. So we're real excited about that opportunity. And manganese is an excellent target, but it is, you know, it would add to that heap leach scenario. We're not waiting on that to make that determination.

14:24 It would be determined through what we have at bay and Campbell and even some in Brimstone. Awesome. No, Like I said, sexy and cool. I love it. But stepping back, and Diane, I'll throw this one to you first. You now have 2 really significant high-grade silver systems in Brimstone and Vortex, both still open and expanding, which is really exciting. Plus the 43101 resource of over 15 million ounces of gold, 1600, or sorry, 600 million ounces of silver, which really is crazy. So how do these high grade zones ultimately integrate with larger deposit? And what's the path here to your PEA, PFS later next year? Sure. So we are working on the technical report as we've just disclosed.

15:13 It's not gonna be completed by the end of the year. It's gonna push into the first quarter. A lot of firms, labs, drillers, engineering firms, they all take off for the holidays around the 19th of December. And in Canada, you can put out your results and then 45 days later, you can file the report. In the US, you can't do that. You have to file the news with the report at the same time. So it's the buttoning up of the final report that we're working on. So we will get that out in the new year. As far as how we integrate that into the new mine plan, our view is in these higher commodity price environments. You really want to go after your best grade because that's going to bring the best economic value in. So this, when we put out our report, we will have our also we're going to do an updated resource early in the first quarter.

16:03 And that I think is gonna be very impressive to the market because it's gonna include all of this drilling we've done over the last year on the high grade, which has not been included in the resource that you just quoted. That was 2023, that was before we discovered them. So when we go to, we'll put that out in the new year, it will incorporate the high grade and we will be separating out that high grade so the market can understand that even just after 14 months of drilling in the past, we have a very significant system there and that will be, that will be shown early in the first quarter. From a mining perspective, the decision for us now is, do we want to start with the large project, which will be somewhere in the 50, 60,000 tons a day, because the low-grade nature of the predominance of the ore body, or do we want to start on this high grade and get underground? And the other thing we're looking at, and we've talked about before, is putting in a underground development from the bottom of the brimstone pits so that we can drill from underground. And that would be ideal for the team because then they're looking at the structure, seeing it, and it would be far more efficient in our drilling to be able to do that from underground. And you see that happen a lot. So a lot of things that we'll be deciding over the coming months and quarters and all leading up to production, because that's, you know, we're all miners and we're all operators. And that's really our goal is to start generating some good

17:34 cash flow in these markets. Awesome. And Alex, I'll leave it to you for kind of last words on how you feel about this most recent news release. I on that 6070 hole is man, that's crazy. It's super exciting. The whole team is just buzzing about it. Yeah, it's kind of mind-blowing. Yeah, it kind of revives my excitement around Vortex. We've been kind of more, a little more focused on the very high grade Brimstone. This reinvigorates Vortex and kind of solidifies in my mind that there's still a lot to learn here. Yeah, it's pretty exciting. Awesome. Alex, Diane, I appreciate so much you giving us this update. And I'll talk to you