A last-minute impulse to drill an intercept visible on the surface, but not included in its 2020 drill program at its flagship Carrizal project, produced a welcome surprise for Red Metal Resources Ltd. (RMES:CSE; RMESF:OTCBB).
“Copper is a very visual thing. If you have copper that you care about, you can see it in the rock,” Red Metal’s CEO, Caitlin Jeffs, told Streetwise Reports. “We had seen this intercept and, without any prep, decided to drill it as we were moving the rig off the property on the last day of our 2020 drill program at Carrizal.”
That hole, FAR-22-020, previously sampled on the surface in 2012, was a six-meter quartz vein with visible chalcopyrite and chalcocite mineralization. Jeffs said, “FAR-22-020—which we’ve named the Gordal vein—is a different host-rock type from our previous vein intercepts. We drilled just 150 meters and got this beautiful intersect.”
Upcoming geological mapping will focus on careful examination of the strike extents of the Gordal vein to develop future drill targets, along with detailed structure and alteration mapping across the entire Carrizal property to further delineate other veins and alteration corridors on the property.
The Carrizal project is in the prolific Candelaria iron oxide copper-gold belt of Chile's coastal Cordillera. Jeffs described the property as “pockmarked with holes from decades of artisanal mining that you can even see on Google Earth.” Equally important, the property is adjacent to a historical mine, and Red Metal can track its veins “right onto the historical mine site.”
As previously reported, the 2020 drill program included nine holes and 2,010 meters of drilling. It targeted down-dip extensions of known mineralized zones and tested new zones.
What Sets Red Metal and Chile Apart
Unlike other copper explorers working in the Chilean Andes, part of Red Metal’s property is at a low elevation in the coastal Cordillera. According to Jeffs, this has several advantages: First, the property is closer to infrastructure and can be mined during the winter months. “June and July are the two best months for us. Explorers at higher elevations are not working then, so everything is cheaper and easier to access.”
Second, Carrizal is only 23 kilometers from the Pacific Ocean. This is important for both logistical and resource reasons. Chile is in a long-term drought, with residents, agriculture, and industries of all sorts competing for a scarce resource. Increasingly, all sectors are looking to desalination to ease supply concerns. Some mines are building their own desalination plants or partnering with specialty firms. (One example is World Copper’s partnership with Desaladora Rosario SpA, recently explored in Streetwise Reports. Others are investigating the potential to use treated saltwater directly in their operations.
“Desalination technology is changing very quickly, and even though we are still early in the exploration process, we are keeping an eye on how technology and the law are changing in Chile,” Jeffs said. “But in any case, getting water from the ocean up to 5,000 meters elevation will be very challenging. In that respect, our low-elevation location is an advantage, and we still have a few years before we get to the advanced stage, when we will need to make water-supply decisions.”
On the topic of the changing legal landscape in Chile, Jeffs is optimistic. “A lot of people look at South America only as a continent, but these are very distinct countries. Some of the legal changes in Chile have been very beneficial to us.
“For example, it used to be that an owner could hold its mining properties forever without working the claim and pay a relatively cheap annual land tax. Now, the land tax is based on what—if any—work the owners are doing on the property. If you are not exploring or mining your land, taxes go up significantly. This has sparked a lot of mining companies to raise their hands and look for partners for their projects; others are selling claims. It is a kind of use-it-or-lose-it situation. This will be very good for foreign investment.”
There also will be changes to Chile’s mining act and stricter environmental laws. Jeffs points to similar changes and challenges being raised by governments and citizens in the U.S. and Canada. “A lot of people got their knickers in a twist about Chile’s constitutional convention putting forward the idea of nationalizing the mines. That has been voted down. Chile has had a stable government for 40 years, and mining contributes a lot to the national economy,” she said. “I don't think they will shoot themselves in the foot.”
Looking for a “Huge” Catalyst
Red Metal’s immediate goal is to drill 20,000 meters in the next year. “Behind those 20,000 meters is the real goal of putting together a maiden resource,” Jeffs said. “Of course, that depends on our finding a consistent enough deposit because that's what deposits are all about: consistency. We believe a resource estimate in the next 18 months will be a huge catalyst.”
Describing Red Metal as “long in the tooth at 15 years of age,” Jeffs said the explorer has a very low share count, at just under 52 million shares outstanding. Insiders own about 30%.
In 2021, Red Metal listed on the Canadian Securities Exchange, a move Jeffs noted is always a “bit risky,” but Red Metals won that bet. It raised CA$1 million at a CA$0.15 share price and has not strayed far from that range.
It is too soon to tell whether Red Metal will remain an explorer or move into developing a working mine. “I believe that there are explorers and there are developers. I’m attracted by the puzzle of figuring things out and building something new. So, if Red Metal decides to develop Carrizal, my job will be to add to or adapt the management team to find brilliant, qualified developers who believe in the project,” Jeffs concluded.
| Want to be the first to know about interesting Base Metals investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Disclosure:
1) Diane Fraser compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee. He/she or members of his/her household own securities of the following companies mentioned in the article: None. He/she or members of his/her household are paid by the following companies mentioned in this article: None. His/her company has a financial relationship with the following companies referred to in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Red Metal Resources Ltd. Click here for important disclosures about sponsor fees. Please click here for more information.
3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of the information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services, or securities of any company mentioned on Streetwise Reports.
4) From time to time, Streetwise Reports LLC and its directors, officers, employees, or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in the securities mentioned. Directors, officers, employees, or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Red Metal Resources Ltd., a company mentioned in this article.
