Pinnacle Samples up to 12.2 g/t Gold Equivalent and Commences Field Work

0:04 Bob, great to see you today. I got a couple of questions based on your latest release. Looking forward to chatting. Yeah, absolutely, Romeo. Great to be back. Awesome. So looking at your last release, to me, the sampling results show honestly pretty impressive high-grade gold and silver values. I'd love if you could explain how these grades compare to similar projects in the Sierra Madre region and what you think that means for the potential economics of El Pochero. Well, I mean one of the things that I've always loved about the Sierra Madre is the great. Throughout my career, I've grown up with that adage that great is king. And I've spent time in the Abitibi of Canada, and Thames, and Kirkenlake, all these places. And so yeah, That's one of the things that draws me back. I know that this particular area is a very high-grade area.

0:55 I'm obviously very familiar with the Topia mine, which was the first one we acquired with Great Panther. That's a very high-grade mine. It's polymetallic, but we had years where the average Silver grade was 500g, plus Gold-based metals and everything else. It's Just seeing these grades, what it did for us really was confirm what we had been told by the vendors because the lack of any real work on the property has meant that there's not a lot in terms of records and documentation that we've been able to rely on. And so that's why the due diligence for us was quite crucial. And so to be able to repeat those grades was extremely important.

1:46 But yeah, it's a high-grade district, and I think it bodes well for the future of the project. Now, I did notice in the little about section at the bottom of the PR, you mentioned that you'll earn an initial 50% interest upon commencing production. So just curious for the investors watching, what timeline are you targeting for potential production? Well, you know, obviously we'll like to get a bit more involved with the project to get a better handle on that. But given that the basic infrastructure for the plant is there and you know, it shouldn't take too much in terms of time or money to upgrade that and get it back on stream if you like. And then similarly with the underground workings, we can rehabilitate those and get them back operational again. So right now we're looking at about 2 years roughly to do that work and we will be drilling at the same time. So all of that can work in parallel. And so we will be building the resource as we're refurbishing the plant in the underground as well.

2:51 So yeah, somewhere in that 2 to 3 year timeframe, I think is what we're considering at the moment. Now, things might change going down the road. The nice thing as far as permitting goes, number 1, it's an underground mine. So, you know, all the talk in Mexico about open banning, open pits and all this kind of stuff, I don't think that they'll ultimately do that. But nonetheless, there's still that uncertainty, right? Whereas underground mines are much easier to permit, faster to permit, and they have a smaller footprint. And, you know, starting at 100 tonnes a day, you know, we hope to be able to incrementally build that over time. But it is just a starting point. And as such, I think the initial permitting process should be fairly straightforward and hopefully within that same 2 to 3 year timeframe.

3:43 But we're gonna start doing some baseline work on that almost immediately. I mean, there's no reason why we can't start to do some of the environmental work that needs to be done anyway. Yeah, do it in tandem. I mean, that makes sense for sure. Yeah. Speaking of, you mentioned existing infrastructure. I do have a couple of follow-ons for that. So I know there is a, as you mentioned, the 100 TPD processing plant that's already on site. I'm curious just for your perspective on why having that, what advantages does that bestow on Pinnacle compared to Greenfield's projects where you gotta build everything from scratch? Well, the biggest thing really is that if we are successful in doing what we want to do and getting to that production stage, then start with metal prices the way they are right now. I mean, we should be able to generate some cash flow from that operation.

4:32 And even having, I can't put any numbers to it at this point in time, but having a bit of cash flow would mean that we're not having to constantly go back to the markets. So really what it means for shareholders is that it's non-dilutive financing. And that's ultimately what we're trying to achieve. We did that successfully when we built Great Panther and other companies like Endeavor Silver, First Majestic, they've all done the same sort of thing. So it is a business model that we know can be successful and we hope to do it again. That's great. I know investors love an approach that designed to minimize dilution. People tell me that's possible. That's great. Another question, back to the geology a little bit, you noted that the veins appear to display a long strike with several parallel veins existing on the property and the neighboring ground.

5:25 So geologically speaking, what does that setting suggest about the mineral potential of the system to you? So whenever you have a system like this, these systems are always structurally controlled. And maybe the easiest way to think about it for the average investor is if you were to look down from the air at a river system, especially as it gets close to a delta, flying out into the ocean or something like that, what you see is not just 1 channel, but it starts to sort of deviate out and it has what's called a braided sort of pattern where the veins, or what the veins, where the river will diverge and then come together again. And so you get this big pattern. And that's exactly what this type of a vein system would look like, if we were able to look down from above.

6:23 And what that does is that it adds other veins that you don't necessarily see right away. And this is where the drilling is gonna be key because the previous miners would just have gone underground and just followed a vein typically. And unless they see something underground that leads them to think that there's another one going off at an angle one direction or another, they would just stay on that one main vein and just keep going. Whereas when you drill it, you're drilling across all of these structures and you very often find parallel veins which when you follow them out they you know they meet up with the original one and you know this is where so many vein systems in Mexico in particular are called the Veda Madre, the mother load basically, the mother vein.

7:24 That's kind of the principal vein and then the other splays go off from there. One of the key things is that where 2 veins come together, you get a thickening of the veins and often you can get better grades in areas like that as well. Those areas are particularly important from a production standpoint. So it's really, really key to understand the structural controls on these systems as early as possible because it does become critical going forward. Awesome. I appreciate all that extra context. I think that's very helpful. With the upcoming LIDAR survey, what do you think that will do to enhance your understanding of the properties potentially? What are you hoping is an end result of that survey?

8:13 So what the LIDAR does is basically sees through all the vegetation and the overburden and everything and gets you right down to the rock surface. And so it gives you a map that can actually see those structures that I've just been talking about. And so to be able to follow those in areas that are covered with, you know, tell us off the side of the mountain or just overburden or trees or cactus or whatever it might be and to be able to follow those really helps a lot in terms of planning your drill program and just being able to follow the mode. You can sometimes see those splays and where the veins deviate from 1 another and come together again, and you might have a completely separate parallel 1 that's not very far away.

9:05 And I've often seen that in the past working on these types of systems. And sometimes, yeah, I mean, we've been underground at times where even our mine manager, instead of drilling, he's just put a little crosscut out from the underground workings, and 10 meters away, he's found another vein. And being very high grade, and that can support the mind for the next year in some cases. It's just things like that, that when you're underground, you're totally confined by rock. And until you start to either drill through it or explore laterally outwards, You just don't know what's there.

9:51 And so that's where it becomes critical to get that three-dimensional idea of what you're dealing with. That's great. Looking forward to talking to you when those results come out. That should be fun. So last thing I'll ask you, just for the investors that are in the room, what should people be on the watch out for Pinnacle this year? What are you most excited about? Well, I mean, we're going to try to fast track this project as much as we can. So, you know, I'll try to get regular updates out to people just about what we're doing, the different phases of the program. And, you know, it's going to be a few weeks now, certainly before we can get any more assay results because the guys have to get underground and do the sampling and then get the samples into the lab and get everything assayed and so on. So it'll be a little while before we get any more assays, but I'll try to keep people updated with what's going on. And we are gonna be cleaning the plants and getting that back ready again and the campsites and the workings, the LiDAR survey when we fly that, and then planning for drilling.

11:00 I would like to be drilling maybe within about 6 months' time, something like that. So end of the summer, early fall. And that's going to be key. So I think looking forward, That's going to be one of the most exciting things, I think, once we can start the drilling program. Because underground sampling is great, to give you an idea, but you're still sometimes limited, Because of that confinement that I was talking about, you can't see what's beyond the walls of the workings. So being able to get in there and start drilling is something I'm really looking forward to. Awesome. Well, Bob, appreciate it so much.

11:47 Looking forward to seeing you on the next updates. Okay, thanks a lot, Romeo. Take care. Cheers.