Collective's Apollo Starts at 5.4Moz—and Ari Sussman Says It Will Get Bigger

0:00All right, everybody. Welcome back in to mining stock daily kicking off this Thursday's corporate updates with the big one. Much anticipated made in resource estimate for the Apollo deposit from collective mining did hit the tape yesterday. And so we're going to get a corporate update here from executive chairman mr. re assessment are you. It's always nice to do actually appreciate doing these updates after big news release big numbers 24 hours after the fact gets you know everybody can have a day to digest everything see what the initial market reaction was. But need us to say 5.4 million ounces gold equivalent you know let's take that 30,000 foot view of this resource with your comments first and then we'll kind of dive into the niche.

1:05Well look so separately because I'm obliged to follow 43101 rules we announced 2.5 million gold equivalent ounces in the indicated category at 2.17 grams per ton overall and 2.83 million ounces gold equivalent at 1.83 grams per ton in the inferred category. Okay, you the takeaways of what was an RV amazing about this this estimate is is a couple fold. One is there is a far more robust open pit than we ever envisioned ourselves. Okay, so there were 2.2 million ounces of gold in the open pit and all categories of that 1.5 million ounces approximately in the indicated category at 2.3 million.

2:05So that's 2.06 grams per ton and then the balance of that 700 is 1000 ounces in the inferred category at a lower grade. We're talking the pit. Okay, so the big surprise besides how good the grade is well I guess that this is the high grade of the pit isn't a surprise and this was done at a point 3 grams per ton gold equivalent cut off is the strip ratio. Very low came in 3.4 to 1 and I will iterate a key point okay we announced in the press release something called the shallow halo zone so this is the zone of rock surrounding the bracha shallow okay and I can tell you that that strip ratio although low. If we keep the open pit dimensions the same in future resource updates that will be the highest strip ratio we will ever report. Because we have hit in drilling holes subsequent to the resource that have been announced in that outer halo of the pit that have grade and we showed image with a whole series of visuals that we're expecting assays for in that outer halo that appear visually to have enough grade that I suspect all of those visual intercepts will be above a point 3 cut off so the pits going to grow and it's strips going to reduce and the key.

3:31And the key metric for people to look at an open pits what seems to be a forgotten order in our industry is the residual grade which is you take the grade of a pit divided by the stripping ratio and that remaining grade is what the actual grade is of your pit. This seems to be forgotten because remember you need to mine all of that pit right you don't just mine the areas with gold or with whatever metal you have so we look really good on a residual grade basis and it's going to get better okay and that's good for your audience to remember look at the strip ratio and divide the grade by the strip to get the actual residual grade. Okay that's section one section two is removing down vertically with this resource is the area that is below the pit so underground mining but above ramp so doesn't include the high grade ramp zone and that also came in nicely you know it's kind of our lower grade section of the deposit but we still announced in indicated 2.1 grams per ton for 700 thousand.

4:46And in inferred 2.06 grams per ton gold equivalent for just under a million additional ounces you might say well that's just over 2 grams is that low for underground right and and the answer is depends on how you plan on mining this okay so in a resource you put a mind plan on it would would we would they call RP triple a reasonable prospect for economic extraction. Okay that's a rule under 43 101 and we designed for sub level open stoping so that is a bulk underground mining method lots of those types of mines out there most recently in the news was elder auto announced they started producing at scurrious and Greece right just by just just as a comp the cut off grade for sub level open stoping underground in Greece for them is 0.7 grams per ton so at over 2 grams grade you have a very wide margin and then the next well the big surprise outside of the pit I would say was ramp okay so I'm going to be honest when we went through this exercise I didn't know how much ramp we would get into this resource because of the lack of drilling like ramp is a relatively new discovery as you know and your listeners know and we announced mainly in inferred obviously it's deeper right to access it from surface with drilling but we announced over a million ounces just over a million

6:13ounces in inferred at 5.37 grams per ton and a couple hundred thousand ounces and indicated a 4.74 grams per ton so that is a really really good start okay so in total as you mentioned I won't say the number but there was north of 5 million ounces of metal in the estimate and as we were talking before the call started I will iterate this point show me another company with a structurally controlled system that announced a maiden resource at north of 5 million ounces gold equivalent or gold I don't think you can find one this is a really big start and as I'm sure we'll talk about the upside in a minute yeah you know there's I think the the open pit surprise me as a shareholder if I might say the open pit size surprise me because for the last couple maybe year or two are you and I've talked about excuse me a small open pit I don't know 22 million tons of indicated a small maybe the size now that's a surprise I also was also surprise with the numbers within ramp I didn't actually think ramp would hit that much into this resource I was kind of thinking we'd see more drilling maybe in another iteration of an updated resource would

7:37ramp would really shine and maybe that's still the case so that surprised me as well but I do want to talk about the mineralization here within the resource out of that 5.4 million ounces gold equivalent it's a bit over 4 million ounces of gold and obviously we talked about the polymetonic nature the silver copper and tungsten and I think there's a lot of questions about can you hang your hat on potential payables of the copper and the tungsten in there with what you know now and wonder if you can kind of shine the lights on on that polymetonic nature and how it kind of dives into the equivalent factor of this resource it's a it's a it's a good question Trevor and the answer is resounding yes so so here's the interesting part if you take the indicated portion of the open pit okay so about a million and a half ounces roughly half is gold and the other half is a combination of silver tungsten and copper so with regards to the critical minerals especially tungsten and copper virtually all of it sits within the pit and will come out early

8:49metallurgically it's a cinch this this mine will have a dual circuit so when you have copper or tungsten let's start copper first above the cutoff grade that you believe you can produce an economic concentrate you will put that through flotation we have all chocolate pirate loves to float and I I know from test work that we will create a copper concentrate at up to 25% with very high precious metal credits along with it the tungsten is even easier because it's so coarse you run it through the gravity circuit up front you separate tungsten initially okay so it goes to its own pile just from gravity and then you run it through its own mini circuit right which involves flotation so we'll have a dedicated small inexpensive circuit to to to to produce tungsten trioxide from that she light and that will be relatively easy and again it's localized there are new zones we're finding we we showed in the in the you know in the conference call we hosted

9:53yesterday that there's hits within the pit deeper where there's where there's a couple of hits a tungsten with high grade that are not in the resource estimate including one hole that we hit 27 meters at almost 1.7% tungsten and over 11 grams gold not in the resource estimate was post that could be a new zone forming but the upper zone that will come out easily and we will get those payables there's no problem we're really blessed with good metallurgy here that that is the luck of the draw as you know and and just worked out fantastic for us. Yeah very good okay what's interesting about this MRE it's not just a resource update R.E. I mean you are kind of hinting and laying the groundwork for a potential mind plan strategy here it's not only through the pressure release but in the communications you had in the webinar you in the company hosted yesterday so you it's almost like you're continuing to add a little bit more than just the numbers

10:54but you also I think some of the blue sky potential here there was like what 40 kilometers of drilling not put into this resource that cutoff time can you kind of describe to us you know what that cutoff date was for these numbers that are represented today and you know if you can maybe editorialize a little bit were those numbers improve with the drill you do know between now and what was that cutoff and March. Okay so I'm going to answer your questions in your comments in backwards order let's start with with the upside so there was 114,500 meters of drilling that went into the Apollo mineral resource okay and the cutoff date was March 31st there has been north of 40,000 more meters drilled since then okay upside okay so the open pit I mentioned the shallow Halo zone okay we have three of our 13 diamond drill rigs focused on that now lots of news to come from that

11:56imminently the section above ramp but below the pit okay we we showed a plan view and a section view and where the indicated inferred is and within the breccia body there's tons of open space okay that just did not have enough drilling density to potentially qualify for inferred or a higher category of mineral resource that drilling is is starting to happen now we recently like last week I think it was Tuesday of a week ago announced at the what we call the northern breccia extension so that's in that mining zone that underground pit future mining zone above ramp where we found a hundred meter extension to the actual breccia body at about 1.1 kilometers below surface and the highlight intercept into that was 141 meters at almost five grams per ton with a significantly higher grade including within that so that's a huge difference within that so that's all growth not in the resource okay ramp is really the one that is has me the most excited and sure our shareholders so

13:05we showed a section a plan view I apologize of ramp where we project the size of the breccia body you know at the rap depth at about a couple hundred meters below the top of ramp okay and the and the circumference is roughly 1.5 kilometers or 1.5 meters okay the blocks that made the mineral resource estimate only covered 315 meters of that 1,500 meters circumference we have drill holes on the west side with assays that have been announced publicly that show it exists on the west side and what we showed everyone was that we have visual hits loosely almost enclosing that entire circumference with hits of the visible gold and other things of the like you know we're waiting assays so you know only 21% of the lateral circumference of the projection of the breccia qualified for resource then we look at ramp vertically the deepest hole from the top of ramp that qualified for the mineral resource was 350 meters below the top

14:16okay so that was the deepest single intercept to the bottom of the resource we have visual hit a PC 171-D3 drill hole that if there's a hit a visible gold deeper if it hits with when we get the assays it becomes back positive that will double the potential vertical extent of ramp with one single hole right we'll take it from 350 meters the bottom of the resource down to 700 meters so this thing's going to grow and grow rapidly you know we have a total 13 rigs three are doing shallow drilling to our on trap one is drilling new targets so that is six that means that seven rigs are focused on ramp as we speak I think this is going to grow and grow rapidly okay coming back to your early part of your question we I answered a lot of people called me on this gesture why did you come out with your resource so early you said originally was going to be H2 2027 why was it now the answer is simple let's take it from the bottom of the resource that we're going to be using is going to be a little bit more than we do now the answer is simple let's take advantage of the new government in Columbia which has been in power for approximately a month we announce we accelerated this maiden resource so that we can start the process to file for licensing for this mine we expect to submit those applications in the middle of 2027 so roughly approximately one year from today and the timeline to get an answer on that in Columbia is about one year

15:43so that means if all goes well we could be a permitted licensed my project for construction by the middle of 2028 there is no other company that I am aware of in our peer group or snack bracket that could deliver licensing in that timeline if we do deliver it in that timeline it means in theory that there could be a producing mine here sometime late 2030 or maybe early 2031 that is very fast and it's going to be a lot of time to get an answer on that very fast and that is why we've decided to accelerate the mineral resource this is a good resource there was a lot of disclosure in the release more than you see for most companies and the mine plan that was used to calculate RP Tripoli or reasonable prospective economic extraction was roughly in line with how we envision mining this right so we didn't cherry pick it by putting a selective mining method in so we could boost the grade we actually put together a mine plan that hopefully will represent the grade roughly of what a formal plan will look like in future economic studies

16:51Trevor the path going forward from here so licensing is a is a is a separate path from 43101 that gets submitted mid next year we will come out late 27 early 28 with another resource update and a PEA to follow that immediately and in 2028 late 2028 early 2029 will have a feasibility study with an additional resource update at that time done and that will be the basis with the licensing to go finance the bloody mine and build or sell or whatever it ends up turning into well you just about answered I think about three of my follow up questions but I think it is worthy to know for listeners maybe didn't listen to the call yesterday you did basically say that these numbers are foundationary they are not going to be the numbers that feed a PEA there will be an updated resource in the timeline you just described but that PEA you also anticipate will be to pfs level type of work

17:54right we're already starting to see I guess at the groundwork for a potential mine what a guiabalus and specifically Apollo looks like and part of that net net net came on yesterday and he talked about net julio I think is the last time pardon me if I if I'm mispronouncing that he talked about blending the pit and ramp to a three gram head grade and north of 400,000 ounces a year so there's really a lot of focus on ramp and I just want to maybe is that is the continued success at ramp with the drill bit and the added to ramp I mean that is a crucial point of development for Apollo going forward is that what if we look at one thing out of collective for the next 18 months is that continued exploration at ramp going to be the most critical yes it's an exploration added because we'll only be doing exploration from it now but when we get licensed we will make that larger and we will continue it to Apollo and the division is to build a 15,000

19:07ton per day mill and having it fed in the early mind life by a combination of the open pit and ramp okay so if Ned's projection of three grams per ton is correct at 15,000 tons per day put metallurgical recoveries on it okay on that grade or on what you get out and you're getting close to almost 500,000 ounces per year in the early mind life years obviously we need to find more mineral at ramp and that's what the drilling is focused on if that circumference of the breccia comes in which I believe it will I think how many ounces I don't know but a lot more than we have today a lot more and it grows vertically which I am confident it will visuals are showing that already you know that's going to be very very exciting for this mine it will be it will be a big one let's just put some comparison to it so our next door neighbor is Aris mining who is looks to be actually on schedule to cut the ribbon so to speak on their new mine later this year

20:15this year and start ramping up from there they're built to 5,000 ton per day mill and they're projecting a couple hundred thousand ounces of production from a from a reserves that are roughly you know 2.6 grams per ton okay why did they not build 15,000 tons because their system isn't as bulky as ours so they are mining or proposing to mine underground with with a method called long hole a stoping right long hole open stoping we're doing sub level open stoping which is far bulkier so we plan to do it so we'll be able to feed a mill plus having a pit helps but feed a mill okay at 3 times the size okay as Aris mining so you get the point right there's going to be a big mine the other the other thing backing up to that exploration at it as it is right now is we're going to be drilling trap very soon I can't give anybody a projection of what I think will happen to trap for sure because it needs a lot of drilling it's early days but I do believe I think we have enough evidence that there's a legitimate chance

21:24that we will find another mining front of some sort at trap okay and that is not obviously in our thinking at this point but imagine if we do even if it's 50,000 ounces a year right could be 100,000 ounces I don't know add that to the capacity and you get the point of this is going to be a really really big project one of the better gold equivalent mines I guess we can call it out there with a nice critical mineral component that will come out right at the front you know of the mine life for the project last question here are the you know the market reaction was what the market reaction was yesterday just kind of curious what you heard from your institutions the big boys that have invested into the company any sort of words you know feedback from them that you gained or was it mainly a lot of retail that was really kind of pound in the table with commentary

22:29I think I think the comments were is that I had guided when the when the plan was to release the resource initially in the second half of 2027 and I guided to five to seven million ounces and so when it came out at the 5.4 that you that you mentioned that seen light but people aren't forgetting that we've come out a year earlier right I have all the confidence in the world and I think that's what we're going to be very difficult so that that disappointed people maybe the grade you know in the middle mining zone slightly disappointed people I heard that and then and then there was a little bit of confusion because if you take the global resource grade averages and you just say oh look at the copper grade and look at the tungsten grade it's too low right to extract but what's missing is the nuance that they sit in an area where the grade where it's localized and they'll have their own circuits from that much higher grade area the rest of the deposit won't have tungsten or copper

23:33so it's got blended because that's how you do resources versus separated out specifically and that may have confused people a little bit but look I think it was just simply buy on mystery sell on history my career I've always seen companies announce these are mineral resource estimates that meet expectations and the stock go down it becomes a selling event I think that's it but very soon I suspect that people will understand that of all our peer groups I don't know one that has better upside than this and tangible real upside with already drove holes into it and visuals and plus assays and so I think that will move well past this little mini correction and look forward to the aggressive growth curve that we're on in terms of resource growth how about you personally professionally do you learn anything in the last 24 hours are anything that may be surprised you that you didn't know before I sadly have enough experience that you know I didn't get surprised by the reaction I actually expected that reaction I warned my team about it about two months ago

24:39you know that you know I've always said to the team a mineral resource estimate the best case scenario is your neutral from a sheer price perspective on that day unless you're a company that's sandbagged the whole street for two years saying it's going to be two million ounces and then you come out five okay you'd repire but then that mean you all that time you were sandbagging your valuation would have been trading too cheaply and your financing dilution costs would have been too excessive in that in terms so that does not a good strategy so I warned the team you know what I expected you know I mean I didn't know I didn't have a percentage drop you know we've under perform but look I can tell I we know that there's going to be a bevy of positive drilling results coming out and fast and furious you know starting as soon as I hopefully next week and and so we'll rebuild and we'll people will get the view we'll understand the view again very quickly this thing is going to get a lot larger than the resource we announced yesterday which already is one of the bigger ones in the gold space

25:43that is out there right today yeah 13 drill rigs ongoing working there's going to be a lot of updates coming here for the rest of the year Ari thorough conversation but it needed to be a lot of questions out there thanks for sharing that insight with us in our listeners here at MSD always a pleasure to chat with you and yeah we'll do it again here in the next couple weeks looking forward to a Trevor and see you soon in Colorado I believe yep absolutely all right collective mining trades on the T.S.X. and the NASDAQ with the symbol C.N.L. we've got more updates coming your way so stay tuned the information presented should not be considered investment advice mining stock daily ins affiliates are not responsible for any loss arising from any investment decision any connection with the material presented herein please do your own research or speak with a license of financial representative before making any investment decisions