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0:36 And as always, this summit is being recorded and will be available afterwards on SIX.com. And as well, a copy of the presentation is available to download under the handouts tab on the right-hand side of your screen. So without any further ado, I'll hand it over to you, Carlos, to get things started. Thank you very much, Dasha. And welcome, everybody. Thank you for joining us today on this summit organized by SICS. The idea of today's presentation is to, mainly to give you an update on San Jose project. We, as you know, we have 3 projects and most of the presentations will be focused on San Jose. So I'm gonna just go through the initial slides, forward looking statements, and just a quick summary for the people who are not very familiar with Monarca.
1:27 We are a T6V company listed on Toronto with assets in Mexico, gold and silver assets in Mexico. We have 2 assets in the state of Durango, Tejamen and San Jose, I mean in San Lucas, and 1 project in the state of Chihuahua, which is San Jose. Today, Michael Smith, our QP, is joining us for the presentation because it's very important for us to provide all the right technical information. Mike has over 40 years experience in mining, all the way from exploration to production and he has been a great asset to the company working with us for several years now and he's really the key component on the technical side for the company.
2:18 Just a quick overview, our share is currently trading around 11 cents. We have 120 million shares trading and market cap around $13 million. We did our private placement last year on the summer, and we still have enough cash for this program and to continue working. From the board, I don't wanna spend too much time talking about every member of the board. We have very good members and well experienced with different skills from legal, financial, technical aspects, social. I just want to highlight a couple of key members from the management.
3:06 Carlos Pacheco, who is our country manager in Mexico, a Mexican fellow with 25 or more years experience doing mining only in Mexico. So he knows very well the country. He knows how to do mining in Mexico. And he has been also a key component for the team, helping us to find good assets such as San Jose. And the other member I want to mention, it's Monica Espina, who joined the company as a director last summer. And she's an expert on CSR. So she's helping us to build a strong foundation in terms of community relations in San Jose and the rest of the point. So we are having a very good balance team that is helping us moving forward on our project.
4:01 I'm gonna stop here. I'm gonna pass the mic to Michael to start talking in more detail about our 3 assets. Great. Thank you, Carlos. Yeah, so we see here a map that shows the location of our projects. The project we're primarily focused on right now is the San Jose project, which is very close to the border with New Mexico, only about 25 kilometers south of the border with New Mexico. It's very easy to get to. It's located about an hour and a half drive west of Juarez, which is across the Colorado River. I'm sorry, not the Colorado River, the Rio Gravel, as they say in Mexico, south across the river from El Paso, Texas.
4:46 So it's very easy to get to. There's paved road access right to the property driving from Juarez. We very critically, one of the key aspects of the project that makes it important besides easy access is that we have a significant geophysical anomalies that were determined a couple of years ago and so we have potential there for scarring projects, carbonate replacement, mineralization and scarns that are visible at the surface. We also have 2 projects down in Durango, Mexico. The Tehamin project is a project that's got a 43-101 resource of about 29 million ounces of silver at an average rate of 45 grams per ton. It was primarily put together with very shallow drilling, and they were looking at it at the time for open pit mineable mineralization. The mineralization is right to outcrops, but we have discovered that there are very high-grade feeder veins underneath it after we re-logged and re-analyzed the information that we had a couple of years ago. We also have, very close to the Tahoma Project, the San Lucas Project.
5:58 It's easy to get to. Also, a paved road goes right through the project area next to the town that Sarah called San Lucas. And we have some very significant vein shear zones that are mineralized with gold, silver, and base metal mineralization. The mineralized structures are about 3 kilometers long, so it's a significant large area of mineralization. Next slide, please, Carlos. This is a little more detail on the San Jose project. It's about 5,850 hectares, so it's a large land package. As I mentioned, the access is very good.
6:45 One of the key things is that it's very close to the Bismarck mine, which has been in production. Then you always have had it in production since the 1990s, underground silver and base metal mineralization, scarn mineralization, very similar to what we see at the surface in the San Jose project. And the Bismarck mine is only about 50 kilometers southeastern, so it's kind of an exploration model for us. There are some differences between what we see at the San Jose project and Bismarck, and that's the Bismarck mine, and that's primarily that we have much higher precious metal grades associated with the mineralization. It's a project that we signed an option agreement on in 2019 to acquire 100 percent interest for a total of cash payments of $150,000.
7:32 The owners do retain a 2% NSR of which we can buy half of that for a $100,000 cash payment in the future as timing indicates for us. So as I mentioned, we have primarily precious metal grades associated and base metal grades associated with intrusive rocks that are intruding into the limestone section. We see mineralization at the surface. Historically, there are some reports of production from the surface. There are only 2 shallow shafts and about a dozen prospect pits at the surface of the area. No drilling has ever been done. The people that did this minor production in the past indicated silver grades between 50 and 1,000 grams per ton, 1 to 5 grams per ton gold, and base metals between 5 and 8%.
8:24 Again, no drilling has ever been done, so this is a virgin prospect from that point of view. And so the mineralization that we see at the surface gave us the idea and the style of mineralization, along with the grades that we see at the surface, to do a geophysical survey, including IP work and magnetic work. And we'll get to a little bit more detail on that. The upshot of it at the end is that we have put together a drilling program to drill about 5,000 meters of drilling at the surface. Right now, we've got about 10 drill holes planned, targeting primarily the IT anomalies, the chargeability anomalies, and looking at the magnetics that's been done. Next slide, please.
9:16 This slide is primarily to give you an idea of our exploration model. If you look at the image on the right, that's a cross section through the Bismarck mine. It had very minor manifestations of mineralization at the surface. You can see at depth, there are much larger dimension areas where they're mining underground right now, but at the surface, it's very thin zones of mineralization. And one of the key things we see here is The purple on the right in that image is a mineralizing intrusive and the green and blue rocks to the left is a limestone section. So there's scarn mineralization as well as carbonate replacement mineralization along the contact between the mineralizing intrusive and the limestone.
10:03 1 significant difference that we see at the San Jose project is rather than seeing a high concentration of mineralization along the contact with an intrusive, we're seeing
16:28 of new roads, and that's what the environmental permitting is about. If you go to the next slide. This is intended just to give you an idea of the anomalies. You can see a stripped geological map on the upper portion of this slide with the drill holes that have been proposed. In red we've got a vertical drill hole proposed and then you can see below in the uppermost of the 2 images at the bottom there's a indicated in cross-section a very large IP anomaly. And so we're specifically targeting the large IP anomaly, again, expecting to see sulfide mineralization directly underneath that hat-shaped area of reds and pinks. That's where the IP anomaly is, is that buried northernmost intrusive that's indicated by the magnetic sourcing. The classic picture of a mineralizing intrusive with above it and around the margins of it sulfide mineralization that we expect to indicate to result in star mineralization and maybe carbonate replacement mineralization. There's also another IP anomaly further to the east. Depending on the results of the first drill hole, the first pass, we would be drilling that other IP anomaly to the east also.
17:51 And then below that the bottom most image is the resistivity. The primary thing that we're using though is the IP response that we see from the geophysics, which is giving us the targeting. The only exception to targeting specifically IP is that the very south end of the area of mineralization that we've mapped and sampled at the surface, we have a Guadalupana mine. And it's a mine that's on a scar vein about 2 meters thick. It's sub-vertical. And that's where we got the sample of almost 10 grams per ton gold and 250 parts per million silver. So we see mineralization directly related to and spatially located very close to where we have the strong IP and the geophysical response. So in combination we've got the classic setup here of mineralizing intrusives with the limestones and mineralization clearly indicated by the geophysical work.
18:49 Next slide. So, as I mentioned briefly, we have now signed a surface rights agreement with the Colonia, which has been ratified by the Mexican Republic, and now that document is going to the reform of the run in order to get them to certify that everything is valid. They register that document and with that in hand as well as the environmental assessment which has been completed, which basically is indicating where we're drilling and any roads that we might need to fill, we then apply for an environmental permit. And the environmental permit typically takes about a month to get that approved.
19:37 So we're hoping that we have seen some significant delays with the COVID. There's been a very general lack of access to government offices in Mexico who have been able to push this through. And so now we're going to be filing for the environmental permit, which gives us the okay to do the drilling. We have contracted Lane to do the drilling. We're going to do RC drilling primarily. We'll see what kind of depth we can get with the RC drilling, which is basically a function of how much water we encounter. We're hoping we can do all of this first pass drilling with RC. If necessary, we may just go ahead and leave that hole open. If we get watered out, if we just can't get the depth that we want on the RC drilling, and we're targeting these holes to be about 500 meters deep. We'll finish the hole with core as might be necessary on a hole-by-hole basis.
20:34 We've also done some additional consultation with the geophysical company, Matrix Geotechnologies, to give us better resolution on targeting the IP anomalies and the chargeability anomalies. So we're moving forward then with being able to do the drilling that was indicated in the previous slides. And we're in the process now of starting to do the discussions with the Ajito. Most of the drilling that we had planned to do is on the community land. In the Ajido land, there's some mineralization, but most of it appears to be under the colonial land. So we're moving forward then with discussions with the Ajido in order to be able to get, do drilling on the western side of that boundary. So we're hoping that we can be drilling in 6 weeks or so. As I mentioned, typically it takes about a month to get the environmental permit. In order to get the environmental permit, you have to have a contract with the surface occupation with the colonia, which we have. It's been ratified and being registered with the Reforma Engadia along with the environmental report. And with those things in hand, that gives you the ability to apply for the environmental permit. So we're getting very close now. As I mentioned, we have seen some significant delays with COVID, but we've been able to push things through.
22:00 And so we're excited to be close to drilling. I'm expecting to go to site and get things set up with Carlos Pacheco towards the end of May and get the drilling program going. Depending on what the penetration rate actually turns out to be, you're looking at 2 to 3 months of drilling in order to drill the footage, the meterage that we're targeting right now, which is about 5,000 meters. Next slide. We also have the Tahaman Project. As I mentioned, it's a project that has a resource that was completed a couple of years ago, about 28,700,000 ounces of contained silver and average grade of 45 grams per ton. One of the things that's really important to understand about this deposit is it outcrops at the surface.
22:58 And there's silver mineralization at significant grades right at the surface. So when the drilling was done on this particular property in the early 2000s, all of the drilling was very shallow, but only in the depths went to about 200 meters. They were targeting the surface minimal resource. The grade may seem fairly low, 45 grams per ton, but what they were targeting was basically open-pittable silver mineralization. And the mineralogy of the mineralization that was drilled is such that it's recoverable with cyanidation, direct cyanidation. The silver is not associated with base metals close to the surface. In terms of this larger resource that you see here, it's a significant size of land package. Only a small portion of it has been explored.
23:47 It's almost 1,700 hectares. And one of the key things that we saw was very high-grade mineralization and feeder veins that are striking northeasterly. And we have grades, intercepts up to 6 meters of 1,400 gram per tonne silver with about 5% combined lead zinc. So these high-grade feeder veins in place the manto-style mineralization, this deposit is all hosted in volcanic rocks at the surface. And as those high-grade feeder veins went into the volcanic rocks, they bled out and formed mantle-like deposits, which is what the current resource is. But those high-grade feeder veins have never been followed up on. So we're hoping that we can work things out with the community towards the end of this year to be able to get in there and do additional drilling. And the drilling would be both confirming the extent resource as well as following up on these high-grade feeder veins. One of the things that we think we may have here is that at the base of the volcanic rocks where these high-grade feeder veins come into the base of the volcanic rocks, we have significant potential, we think, for Monto-style mineralization along the base of the volcanic rock. So we want to drill back down the road and be able to indicate and follow up on these high-green feeder veins.
25:10 And in the case of the high-green feeder veins, they do tend to be associated with more base metals. And so, as we move along, we'll have to do more testing, but it's more likely than anything that we would have kind of the typical Mexican base metal silver mineralization in the high-grade feeder veins at that. Next slide, please. This is a bit of more detail on the Tahoma project. You can see the table on the left that indicates some of these very high-grade intercepts. Many of those very high-grade intercepts are these high-grade feeder veins. We've identified In the Los Montos portion of the deposit, based on the drilling that's been done, you can see the upper right-hand map and all those points are drill holes that were historically done.
25:57 The Los Montos mineralization is open to the east and to the south. We have drilling that's been completed. We want to get in there or do additional drilling. And again, all of the drilling was very shallow, so we'd be looking at drilling with depths up to about 500 meters. We also have the ceropoieto portion of the deposit, which is a very thick vein system with very high grades. We have a primary vein and the cerro prehecto portion of the deposit. It's about 10 to 20 meters thick and sub-vertical. We've identified at least 1 and probably 3 high-grade feeder veins in the Los Montos portion. As I mentioned, the drilling that was done historically was focused on open pit mineralization.
26:43 And the results of the testing is on the right. You can see significant recovery in bottle roll tests as well as column leach tests. And the deposit in the style of mineralization is very similar to Kerr's Rochester mine, which is an open pit silver and Heat Leach mine in central Nevada. We have the same kind of mineralogy that they do. And importantly, as I mentioned, our average grade is 45 grams per tonne silver, but the average grade of the ore they're putting on the leach pad at Rochester is about 0.5 that. And so we see significant potential with direct cyanide leaching as well as the high-grade veins that are feeding that the silver mineralization we see into the volcanic pond.
27:32 Next slide. The San Lucas project is the other project that we have. It's a small property, 80 hectares, where it have been in discussions with the owner of this additional concessions at the surface to see if we can expand that land package. Importantly, it's located only about 4 kilometers from Argonaut Gold's San Agustin mine, which has been in construction. And so you can see it from the ridgeline where we have mineralization at San Lucas. We did some test work, some additional assay work sampling at the surface a couple of years ago and We are seeing significant grades in the old Dr. Vane area.
28:20 We took about 70 samples at the surface and we had grades up to 110 grams per ton gold at the surface, and 168 grams per ton silver at the surface, along with some lead and zinc. The average grade of the samples, it was 89 samples that we took, The average grade of the 89 samples, excluding that very high grade gold intercept, was 3.2 grams per ton gold right at surface. So there's significant mineralization there. It's volcanic-hosted, And very much like the Tehamin Project, all of the drilling was shallow. We have these veins that need to be followed up on with additional drilling. We see about a kilometer to the south there are outcrops of limestone that are altered.
29:14 And what we're thinking is we may have more limestone at depth underneath the volcanic rock. So again, if we can follow those hydrate veins and there are significant thicknesses up to about 5 to 10 meters of thickness with the kind of grades you're seeing here. 1 drill hole that we have, there were 12 historical drill holes, and the 80 hectares that we have there, that drill 2 liters of 147 gram per ton silver along with 1.7% zinc and 0.4% lead. And so there's significant mineralization, And at the base of the volcanics, hopefully finding limestones that will have significant potential for Monto style and carbonate replacement mineralization in the limestones at that. And the next slide is for Carlos, and then we can add questions.
30:06 Thank you very much, Mike. I just want to make some comments here on this slide. We prepared this comparable analysis because Monarcha is still undervalued. We compare Monarcha with other mining, exploration, and developing companies in the Americas, in silver. And as you could see, Monarka is on the far right, almost at the very end, because it's really undervaluated. As I mentioned earlier today, we're today trading around 11 cents, which is equivalent of 45 cents per ounce of silver equivalent, which is almost 60% discount on the average of the peers.
30:59 So In other words, or in simple words, we are still undervalued company that are growing. So for investors who are looking for opportunities in a company that has room to grow, a Monarcha is a great opportunity. And I mean, it's not just based on the training that we have today, but combining with the potential of the approach we have and the team we have built over time, We are creating a good story. And also I want to go to the next slide to talk a little bit more about CSR. We talked earlier about Monika Spina joining the board, but also we engage her company as an advisor for the whole program and we are building and creating a solid foundation for the CSR and the company. We have an excellent relationship with the community in San Jose and we are working really, really hard to continue creating this open channel communication with the community and building this relationship as you know, if the people can trust you, they'll support you. So we are working really hard with them. We are working with the community in Tejamen as well and San Lucas on a different levels Today
32:30 we have most of the activity on San Jose. So a line with the geological program, the CSR program is working on the same level on each of the properties. And Just to summarize, why companies or why people invest in Monarca? One of the key components today, and we really appreciate the support for investors that have been with us all this time, is this upcoming drilling program that I mentioned. It's almost ready to start. We are really, really excited about the potential of this property in San Jose. So it's a great opportunity to be part of this story.
33:17 Generally speaking, we have a portfolio of good assets in Mexico. You hear about the Tejano, San Jose and San Lucas. So we are excited about that. And we are always exploring new investment opportunities, mainly in Mexico with all the team that we have in Mexico and experience we have in Mexico. So it's something that we are continuing working and reviewing new opportunities. And, and the last point that I already mentioned, it's still undervaluated company. So it's a lot of room to grow. And we want to invite you guys to join us on this growth. So I'm going to stop here and open the floor for Q&A. There is our contact information, and we are always happy to have a further discussion with investors anytime they are interested in an update or so on.
34:11 Great, well thank you so much Michael and Carlos. So yeah, like Carlos said, we're going to jump into Q&A here. The first question that we have is, is the mineralization observed at the surface spatially associated with the geophysical anomalies? Yeah, that was something that I noticed the first time I visited the property almost 5 years ago was a large area of mineralization at the surface with prospectives. We took a few samples and got significant grades and the alteration that we see at the surface clearly indicates potential at depth for large scarn style mineralization associated with the intrusives. So we went in and did a sampling in these old mine workings.
34:57 We got significant grades And my impression was that that was leakage from something much larger at depth, a much larger area of mineralization associated with scarms and carbonate replacement and the like. And so the sampling we did confirmed that we had mineralization. The alteration at the surface and the different intrusives that we have clearly indicated potential for significant scar mineralization and base metal and precious metal grades. So we did the geophysics, and lo and behold, just like you would hope it would occur, is we see significant magnetic response with intrusives right in the immediate area of the old mines that are in their location, as well as the IP work and the chargeability work clearly indicates significant mineralization at depth. So we see a very clear association that the area where the samples are we've taken at the surface with some very high grade results is directly above the geophysical anomalies. So there's a clear association which gives us the information to target the drilling at the IP anomalies and the chargeability anomalies.
36:06 Great, thank you. And what kind of mineralization are you expecting to encounter in this drilling? Well based on what we see at the surface, We see well-developed scarn mineralization at the surface as veins in the carbonate rocks as well as along the contact with some of the other intrusive masses we have in the area. And with the late precious metal overprint on things, a high-risk retrograde alteration of the scarns and some veins at the surface, We see that as leakage from larger areas, volumes of mineralization at depth. So what we expect to be seeing is a scar mineralization associated with sulfides, as well as the very good potential for carbonate replacement, because you may recall that there's a line of drill holes, not a line, but a trend of drill holes going northwesterly.
37:00 West of that trend are the carbonate rocks, and east of that trim is dominantly the intrusive rocks. And so we see a very clear association between the intrusives and the limestones and scar mineralization at the surface. So let alone scar mineralization, there's excellent potential for carbonate replacement mineralization. And also that larger magnetic anomaly to the south, with the alteration that I see in the surface, it may be a porphyry-style mineralization buried at depth there, giving us the star mineralization as well as the precious metal mineralization at the surface. Great, thank you. All right, we have a few more minutes here for some questions. Are you planning to raise money soon? Yes.
37:48 Well, the short answer is yes. Not really soon, but we have been very, very careful with the money we raised last year during the private placement in the summer. We have enough money to go through the drilling program. So what we are planning to do is to finish the drilling program, go to the market with the results, and plan for the next steps. As you can see in the presentation, we are just starting the first training program in an area for about 700 hectares. And we are starting with 5,000 meters. So this is just the beginning of a project with a huge potential. So after we finish the drilling and have the results, we come back to the market and present an opportunity for raising more equity as well.
38:42 Great, thank you. Well, so Daniel's asking, what is the water and power infrastructure at San Jose? Well, the infrastructure is actually excellent because 15 kilometers east of the San Jose project is an agricultural settlement, Guadalupe de Victoria, with paved roads entering into Guadalupe de Victoria. There's line power in Guadalupe de Victoria. There's a small workforce there. It's an agricultural community. We've actually rented 2 houses in the community, so we're presenting ourselves as neighbors to the community. We have an excellent relationship with the people, but there's a good knowledge in the community of the equipment because it's an agricultural area. So the infrastructure is good.
39:27 With success, we would have to run in about 15 kilometers of line power, but the line power already goes to Guadalupe Victoria. And another aspect, it's not exactly an infrastructure thing, but we're not in very steep mountainous terrain like up in the Sierra Madre. I mean, most of the area where we're drilling, planning this immediate drilling, is rolling hill country. So the access is very good. There are existing dirt roads going into the property. And so the infrastructure is good. We're not looking at, even with some foresight, we're not gonna have to run 50 or 100 kilometers of power into the property it's only 15 kilometers and a key thing again and Carlos touched on this was just the relationship of the community you know We have professionals helping us with that, but we had already established a great relationship with the community, great reception.
40:21 We have neighbors in the community, and so we have a place where we can stay. We have 2 houses rented. They all have electrical power, water, and so all aspects of the infrastructure are much better than you see in many projects scattered around Mexico. Great. Well, thank you so much. That's all the time that we have for today. Thank you, Carlos and Michael, for going through your presentation and answering our questions. If you didn't get a chance to ask a question and you think of 1 after the summit, we will be emailing out a short survey where you'll have the opportunity to leave your contact details and the Menarca Minerals team will be happy to follow up with you directly. You can also find more information on their website at monarchaminerals.com. So I'll hand it back to you Carlos for the final word.
41:08 Thank you very much Zesha and I just want to thank you everybody for joining us today and feel free to contact us if you have any questions.
