Pilot North Tungsten Project Acquired via Staking

0:04 So good morning, good afternoon, depending on when you're watching. I'm joined today by Oliver Friesen, CEO of Guardian Metal Resources for a conversation about the company's recent news. Oliver, how are you today?

0:12 I'm doing well. We spoke recently, but Guardian's pretty active, so there's lots of news and looking forward to catching up on today's. That's better when I can talk to people week after week, means you got a lot going on. It's always nice to see. So let's dive right into the protein actually for today's event. So, Oliver, you guys moved pretty quickly to stake these 59 new claims of Pilot North, just 15 kilometers from your flagship mountain project. So 1, what made you act so decisively? And then how does this fit into your broader expansion strategy in Walker Lane? Yeah, I mean, the reason we move quickly is we know there's a lot of other groups that are in the area and in Nevada looking for ground.

0:49 So it's key that when we find something good, we move quickly, because if you don't, then you could lose it, right?

0:55 And the key thing here really is the proximity to pilot, right? We're not looking for new standalone projects that are 100 miles away, but we're looking for projects that could have synergies ongoing with our main assets as we push them forward. That makes sense. And I know Pilot North project encompasses those 3 World War II era tungsten mines that actually produced during America's last period of tungsten dependence. So it has been quite some time. So how significant is it to acquire proven historical producers? And what does this tell you? What does tell investors about

1:27 the deposits potential? Yeah, I think I think what it tells you, and we've been saying this before, is the system that we have at Pilot and at Templite are much bigger than the currently known footprint. One of the key things in that press release is the fact that we're seeing the exact same geology at Pilot North that we're seeing at our main pilot project. So that tells you there's an extension, it tells you there's multiple probably porphyries that are feeding this whole belt, and it probably just tells you there's a lot more to find at Pilot Mountain, but also at Pilot North and potentially elsewhere.

2:04 And the key thing here, once again, are looking at sort of bolt-on assets that could be very complimentary to the main core assets that we're pushing forward right now. Okay. Now I know you've confirmed the same geological setting at Pilot North as Pilot Mountain, that's scar and mineralization with the granitic intrusions, saluting formation, limestone. So does this mean we could potentially see similar resource estimates to Pilot Mountains, 12.5 million tons? And what does that mean really for your total tungsten inventory?

2:33 Yeah, I mean, it's too early to kind of get into potential kind of size of resources. We're just not quite there yet. But the key thing is, you know, we move quickly. The you know, The claims that we stake now, we own 100%. And also those are royalty free, right? That's one of the great things about staking your own claims is you own 100% and you don't owe anyone anything. So where do we go from here? And I think the way that we look at this is,

3:02 the main deposit that exists right now at Pilot Mountain is Desert Sheetlight. That's open pittable. We know the resource there. We know the grade. That's the resource and the area that we're pushing forward through to PFS. And we strongly believe that deposit alone justifies the capex for the buildout and for commercial production. And that deposit alone can solve a pretty significant portion of the United States annual tungsten supply needs. That's the real reason we're all here. But what we do as a company is, as that development and that PFS work is on rails, my background is as an exploration geologist. I'm always looking to find new discoveries in areas that could be really complimentary.

3:50 Before we get to Pilot North, we have the other deposits that are known about at Pilot Mountain. About a mile, mile and a half away from Desert She Light is the Garnet Zone. And there we believe there's potentially open pitable resources, higher grade than what we have at Desert SheLight. And the reality is if we can prove those resources up, that could serve as another satellite deposit or pit feeding tungsten rich material to the central processing facility mill and mill site that we would be building to support Desert Shelight. It's funny, we have a model for what this project could look like. If you add a bit of tonnage from other areas at higher grades, You can imagine your payback obviously shortens quite significantly.

4:37 Your NPV, some of your project economics can scale quite significantly, especially at current tungsten prices. Garnet is looking really interesting. We're on hole 18 now, so we're almost done the first phase of drilling there. Looking really positive, so we'll want to do some more work there for sure. We have gun metal, we have good hope. That's just on pilot mount. If you have a mine that you're going to build, then a processing facility and a mill site, you're then looking at, okay, well we could add another 1, 2, 3X amount of years of production from this zone or from this zone or from this zone. And then what we do is we step out from there and we go, okay, well wait a second, clearly this whole mineralising belt is very prospective. Why don't we look for other tungsten, potential tungsten satellite areas that could also support the same sort of model? So sure enough, same access road, you know, we had some reports that indicated some World War II era tungsten copper mines and sure enough we sent a geologist up there and he's sending me photos going look what I just found I'm going that's incredible perfect let's take it right because the reality is if we can continue to work those areas up and it's early stages but we have some very strong indications at surface right now and visible she light, which tells you there's tungsten there and the reports tell us that as well. So the next stage is if we can continue to prove up what is there at Pilot North and if we can show there's some something of size there, we can then potentially that could be a feeder area for material back to Pilot Mountain,

6:08 where we're going to have our main mine and mill site built.

6:12 Bigger picture, how do we scale this project? We know roughly what the economics look like of Desert Sheila right now at current prices. Obviously, we believe it's going to be attractive, which is why we're pushing that forward. But at the end of the day, we want our investors to know that we're looking to leave no stone unturned. Because If we don't go do it, someone else is going to do it. These are 3 new areas. It's all covered under Pilot North. We're going to continue to work that alongside all of the work we're doing at Pilot Mountain. It's just ways to really start to scale this business, looking at ways where we

6:46 can produce more Tungsten, looking at ways where we can produce more tungsten, looking at ways where we can produce tungsten for longer. And by having as many different areas within the vicinity of kind of the main mill and mill site, that allows us to do that. So that's really what we're doing here with this staking. Awesome, And talking about the synergies there, with Pilot North sharing the same road access as Pilot Mountain, obviously, this is going to reduce your development costs and presumably your timeline. Are we maybe looking at a scenario where you could potentially develop both projects simultaneously, or is it still going to be kind of in order?

7:19 Yeah, so it kind of feeds into the last question and kind of my answer there, which is, we're building something that is standalone for Desert SheLight, right? However, once again, if we can prove up other resources around the area, then we can supplement that to the main economic model in the main deposit area at the right time. So Garnet is the most advanced next to Desert Sheila. So we have a...

7:49 ...18 there. So what we can do is we continue to prove that area up. And then as we kind of start to know what's there, we can start to better model that as part of a broader system. So what we'll have is sort of a series of different target areas that are moving forward, but at different stages of activity and development. So obviously Pilot North is the least advanced right now. It's new, It's grassroots, but we're going to push forward the drilling at Garnet. We're going to push forward the development of Pilot Mountain at Desert Sheelight. And then in the background, we have now, hey, here's Pilot North. And if that continues to prove what we want it to prove, then it all eventually gets folded into the main story. And you see this all the time, you know, a project will go into production.

8:36 And then within 2, 3 years, they found an extra X amount of years of production from this zone, and then this zone, and then this zone. And then that's how these companies can grow from a market cap of X to something much bigger because they've shown, hey, we're still looking for more material and we want to supplement and really scale this business. So we have multiple

8:55 low hanging fruit targets, you know, at Garnet and Gunmetal and Good Hope. But now we have some others, more satellite targets that are close enough where if they prove and you can show that there's enough tonnage there and at the right grade, you can easily justify mining that material, shipping it or not shipping it, trucking it along the same access road. And within 20, 30 minutes, you're at the mine and mill site that we intend to build at

9:22 to support Desert SheLight. Awesome. Let's talk about the macro picture for tungsten for a second. I know prices have surged obviously over 40% since China imposed those export restrictions in February. And with the US Department of Defense planning to ban tungsten imports from China and Russia by as early as 2027, how does Guardian Metal Resources total resource, how are you positioned really to capture the supply shortage opportunity? Yeah, I mean, that's really what we're trying to move into here, right? Just knowing what the current supply-demand outlook looks like for, well, really globally, but also specifically in the US. I mean, there's no domestic mine production of tungsten. And you look at some of the big consumers, And we're approaching the point now, Romeo, where companies are gonna have to put up their hands and say, we're shutting down because we don't have these raw materials. And I don't know, rare earths is the one that's kind of talked about most often, but tungsten is certainly in the same scope right now.

10:18 And I think potentially sooner than people realize we're gonna start to see manufacturing have to shut down because they don't have the tungsten they need. So what we're trying to do is, we're trying to focus on the assets we have at hand and assets that can be complementary. We believe we have the pole position when it comes to US tungsten in terms of the exploration and development potential. We have acquired, we believe, the 2 most significant assets in the US at a time before China banned any exports. So, you know, at a time when really no one was looking. And so now we have we're in a really unique position where we can we can push really hard here and we believe we can deliver tungsten to the US market. And our goal is to have commercial production for both of our deposits before Trump leaves office. Right. And we see the tailwinds from the current administration. We see the desire to have Mines in America, defence metals, tungsten being near the top of that list.

11:15 So what we're trying to do is we have the team in hand now. We have a team that knows how to build mines in Nevada. We have the assets. You know, we think we can continue to garner support from the U.S. Government and tap into some of those tailwinds going forward here. And you look at even Trump's announcement 2 days ago, another round of tariffs, right? And some of those tariffs are on countries that either import tungsten right now or will look to import tungsten in the future. And I think once again, that really signals that it's mind in America over everything else, right? And those tariffs are really put in place to support the competitiveness of American industry. That's really Trump is an America first president. There's no 2 ways about it.

12:00 Right. So you look at a lot of other offerings globally, you know, it's, it's important, right? Cause anything X China, we need a lot of material to fill the gap, but us specific, that's where we're focused. We have the assets to do it. We have the team to do it. We have the timeline. We think that can really, you know, materially, you know, affect US national security and some of the demand profiles from some of these different industries going forward. So how does it affect what we're doing? We're just trying to go as quickly as we can. We have the team, we got the assets, We're pushing for a lot of exciting front, so we're just going to go go go. And obviously the news that we put out this week and last week and the week before that is certainly proving that we are going quite quickly here and that is not going to stop awesome. And speaking of going quickly, I know Doctor Lawrence Carter you mentioned

12:46 will be on site within 2 weeks to evaluate Pilot North. Now, given the UV light investigations showing that high she light concentrations and copper-rich zones you've identified, I'm going to ask you to crystal ball gaze here for a second, so bear with me. But what's your best case scenario for how this could transform the resource base?

13:03 Yeah, I mean, we need to get the results obviously, and that's the reason we got Dr. Carter headed out there to do some work on those areas, plus a lot of other things that he'll be doing when he's there. Visually, what we see there is what looks to be pretty high-grade sheelight in some of the samples.

13:23 You can guesstimate what those results are going to look like just based on how much white speckles are staring back at you in those photos. We have some pretty significant malachite surface as well, which is a copper oxide. So we know there's copper there. We know there's she light tungsten there. Once again, it's too early to say what the resource base will change. But once again, you're just looking for other areas that could support a

13:49 longer-term outlook mine at Pilot Mountain. Even if you found a couple hundred thousand tons at one of these zones, that could be material in the longer-term development profile and production profile of a project like Desert She Light. So we don't, you know, there's nothing too small for us. These areas look pretty significant just off the first look here. So we're going to go do more work on that. And then as we know more, we'll get that out to the market and then we can figure out how that's going to shape and play into

14:23 the development plans of Pilot Mountain. Awesome. So I got one last one for you here. For investors watching Guardian's share price appreciation since IPO, which obviously it's a lovely looking chart. I'm curious what these updated resource estimates for Pilot Mountain do the next quarter this year. Are we looking at a potential re-rating event? Does it prove up this world-class tungsten deposit right here in American soil? I mean, I don't want to comment on anything that could allow us to re-rate. We perform well. There are no 2 ways about that, which is great. We put some really good shareholders into the stock and done some really good capital raises. I think at the end of the day though, when we listed, we were an exploration company.

15:11 That's what we were valued at. Now the value is shifting a little bit. We're more considered a development company. But any investor can look at our projects and they can run their own models as to what they think these could produce and what the revenues and the cost could look like. And I know there's investors who have done that. So I think the key thing is, you know, what we're looking to do here is get both of these assets into production plus continue to prove up some of the satellite deposits

15:40 as well. So is there a potential re-rate? I can't comment on that. I think at the end of the day, though, if we continue to execute and deliver, and if we can, and more importantly, deliver mined tungsten material to the US market, and also with potential support and tying into the US government, you know, obviously being a very critical metal, You know, anyone can run the numbers and figure out what those models look like and say, hey, the revenues could look like this and we wanna put a multiple on it of that. And you can figure out what a market cap could look like. You know, do I think we're done here? Absolutely not.

16:15 We're gonna put, you know, I try not to focus too much on the share price. My job is to deliver the assets and that's our team's job as well. And we know if we do that, we should continue to have a lot of success. So we put our head down. It's obviously great to see the share price doing well, But what I've said before, and I'll say it again, is we really just do think we're getting started. We're still early days. We've got to deliver, and we have the team to do so. So we're going to focus on that. And if we do that, I believe there's a lot of value we could probably add here with this business. Oliver, thank you so much. I really appreciate

16:47 the extra context for this week's news. Yeah, thank you so much. Appreciate it.