Chakana Copper Early Results Confirm Large Mineral System at Peru's Soledad Project

• Chakana Copper has released initial results from scout drilling at their Soledad project in Peru, focusing on the Mega-Gold target area.
• The company has confirmed the presence of a large hydrothermal system with extensive alteration and sulfide mineralization, including copper and gold.
• While initial grades were not as high as hoped, President & CEO David Kelley emphasizes they are collecting valuable data to vector towards higher-grade zones.
• Upcoming results from additional drill holes at Mega-Gold and La Joya are expected in August and September.
• The company is using advanced techniques like hyperspectral core scanning to better understand the mineral system and guide future targeting.

About Chakana Copper

Chakana Copper Corp is a Canadian-based minerals exploration company focused on advancing the Soledad Project in Peru's Ancash region. The project is known for its high-grade copper-gold-silver mineralization hosted in tourmaline breccia pipes. In Q1 2022, Chakana announced an initial inferred mineral resource estimate for seven breccia pipes, totaling 6.7 million tonnes of ore containing 191,000 ounces of gold, 11.7 million ounces of silver, and 130 million pounds of copper. The company has identified 154 exploration targets at Soledad, with only 18% tested by drilling so far, suggesting significant exploration potential. Chakana offers investors exposure to both copper and precious metals in a favorable mining jurisdiction with supportive communities.

The company recently released initial results from its scout drilling program at the Mega-Gold target, part of the larger Soledad property.

Interview with President & CEO, David Kelley

Understanding the Soledad Project

The Soledad project is characterized as a high-grade copper-gold-silver system, predominantly hosted in tourmaline breccia pipes. The property hosts numerous breccia pipes, with Chakana having identified 52 targets for testing. The company's recent focus has been on the Mega-Gold target, a large area spanning approximately 2.5 km² which is believed to be the intrusive center driving the entire mineral system.

Recent Drilling Results & Their Significance

Chakana recently published results from the first three holes of an eight-hole scout drilling program at Mega-Gold. While these initial results did not include the high grades investors may have hoped for, they provided valuable geological information. President & CEO David Kelley explained the significance of these findings:

"The encouraging thing for me is that we've confirmed our initial thesis. This is a big hydrothermal system. We've got hundreds of meters of pervasive alteration, we're seeing sulfide concentrations up to 10-15%, we're seeing disseminated pyrite and pyrite in multiple different types of veins. Every single hole that we've drilled so far has chalcopyrite and molybdenite."

This confirmation of a large mineral system is a crucial first step in the exploration process. The presence of chalcopyrite (a copper-bearing mineral) and molybdenite in every hole drilled so far is particularly encouraging, as it indicates the potential for significant copper mineralization within the system.

Interpreting Early-Stage Exploration Results

It's important for investors to understand the nature of early-stage exploration and the typical progression of a discovery. As Kelley noted:

"Exploration is a tricky business. It's very, very, very rare that you come out and just drill your first hole, slam dunk, world-class tier-one discovery, thank you very much. It just doesn't happen like that."

Instead, exploration typically involves a process of gathering and interpreting data to vector towards higher-grade zones within a mineral system. In the case of Soledad, the initial drilling has confirmed the presence of a large hydrothermal system and provided valuable information about its characteristics.

Kelley emphasized that there are typically three possible outcomes in a maiden scout drilling program:

1. Drilling "absolute dusters" with no encouraging results, effectively ending the exploration program.
2. Making a major new discovery on the first attempt (extremely rare).
3. Confirming the initial hypothesis and gathering information to guide further exploration.

Chakana's results fall into the third category, which is a common and often promising scenario in mineral exploration.

Advanced Exploration Techniques

To maximize the value of the drilling data, Chakana is employing advanced exploration techniques. One key tool is hyperspectral core scanning, which Kelley described as "a really state-of-the-art way of modeling your mineralization or your mineral assemblages in three dimensions." This technology allows the company to better understand the distribution of minerals within the system and helps guide future drilling towards potentially higher-grade zones.

The company also integrates geophysical data with drilling results to map sulfide concentrations across the Mega-Gold target area. This approach helps identify "pyrite halos," which are common features in porphyry systems and can indicate proximity to higher-grade mineralization.

Upcoming Catalysts & Next Steps

Investors can look forward to several potential catalysts in the coming months:

1. Results from the remaining five holes of the Mega-Gold drilling program.
2. Results from three holes drilled at the La Joya target.
3. Ongoing analysis and interpretation of data, including hyperspectral core scanning results.

Kelley indicated that these results are expected to be released in August and September. The company will use this information to refine its geological model and determine the best targets for follow-up drilling.

The Broader Soledad Opportunity

While recent attention has centered on the Mega-Gold target, investors should consider Soledad's broader scope of opportunities. The project encompasses a diverse range of promising targets beyond Mega-Gold. These include a recently discovered high-grade breccia pipe, the untested Compañero breccia complex featuring multiple high-grade surface breccias, and an additional 52 breccia targets identified across the property.

This extensive portfolio of targets provides Chakana with numerous avenues for potential discoveries, effectively diversifying risk and enhancing the Soledad project's overall prospectus.

Industry Partner Perspective

It's worth noting that Chakana's exploration approach has received support from its partner, Gold Fields, a major gold mining company. According to Kelley, Gold Fields is encouraged by the results and understands the process of working towards a discovery. Their continued support validates Chakana's exploration strategy and the potential of the Soledad project.

Chakana Copper's Soledad project represents an intriguing early-stage exploration opportunity in a prospective copper-gold district. While initial drilling results from the Mega-Gold target did not deliver immediate high grades, they have confirmed the presence of a large mineral system with characteristics consistent with the company's geological model.

As CEO David Kelley summarized:

"It's very, very early in this exciting exploration stage and I couldn't be more excited. Don't forget, the first news release we put out - new high-grade breccia pipe discovery, needs to be drilled out. We haven't even touched the Compañero breccia complex yet, multiple high-grade breccias at surface. We still have 52 breccia targets to test in addition to these tier-one targets that we're testing now."

For investors with a high-risk tolerance and an understanding of the mineral exploration process, Chakana offers exposure to a potentially significant copper-gold discovery. Multiple catalysts on the horizon in the coming months could prove pivotal in determining the Soledad project's ultimate potential.

The Investment Thesis for Chakana Copper

• Large-scale potential: Soledad project hosts a confirmed large hydrothermal system with multiple exploration targets.
• Early-stage opportunity: Current market valuation may not reflect the full potential of the project.
• Multiple catalysts: Upcoming drill results and ongoing data analysis provide near-term potential for value creation.
• Technical approach: Use of advanced exploration techniques may increase the likelihood of exploration success.
• Strategic partnership: Support from Gold Fields validates the project's potential and exploration approach.
• Commodity exposure: Project offers exposure to copper and gold, both of which have positive long-term demand outlooks.
• Risk mitigation: Multiple targets across the property provide numerous opportunities for discovery.

Chakana Copper's Soledad project represents a high-risk, high-reward opportunity in mineral exploration. The company has confirmed the presence of a large mineral system at the Mega-Gold target, providing a solid foundation for ongoing exploration. While initial results did not deliver immediate high grades, they have provided valuable data to guide future targeting.

Investors should recognize that early-stage exploration is an iterative process, often requiring patience and a long-term perspective. The coming months will be critical for Chakana as they analyze data from the scout drilling program and determine the best path forward. The company's use of advanced exploration techniques and support from a major industry partner are positive factors that may increase the likelihood of eventual success.

However, it's crucial to remember that mineral exploration is inherently risky, and economic discovery is not guaranteed. Investors considering a position in Chakana should carefully assess their risk tolerance and consider it as part of a diversified portfolio of mineral exploration investments.

Macro Thematic Analysis

Copper is experiencing strong long-term demand drivers due to its critical role in the global transition to renewable energy and electric vehicles. The International Energy Agency projects that copper demand for clean energy technologies could increase by up to 50% by 2040.

Peru, as the world's second-largest copper producer, plays a crucial role in meeting this growing demand. However, the country has faced political instability and social unrest in recent years, which has impacted mining investment and operations. Despite these challenges, Peru remains an attractive destination for mineral exploration due to its rich geological endowment and established mining industry.

While more cyclical, the gold market plays an important role in the global financial system as a store of value and hedge against economic uncertainty. Chakana's Soledad project's dual commodity exposure (copper-gold) provides some natural hedging against fluctuations in individual metal prices.

"Don't Panic. This is very typical exploration as it unfolds, and you know, we're trying to bring people along and put as much information as we can as we go through this process."

This statement from President & CEO David Kelley encapsulates both the potential and the patience required in early-stage mineral exploration. Chakana Copper's exploration activities at the Soledad project in Peru are set against a backdrop of increasing global demand for copper and gold. In the broader context of the mining industry, there is growing concern about the lack of new major discoveries, particularly for copper. This scarcity of new projects enhances the potential value of early-stage exploration projects like Soledad, assuming exploration success.