Historic Utah Copper District Gets New Life with Fresh Approach

• Hawk Resources is exploring for medium-tonnage, high-grade copper deposits at the Cactus project in Utah, with historical grades of 2% copper and gold/silver credits.
• The company is using advanced geophysical techniques, soil sampling, and structural analysis to identify promising targets that resemble the historical Cactus mine deposit.
• Recent drilling at the New Years prospect yielded significant copper intercepts, including 30m at 0.8% copper and 26m at 1.3% copper, both near surface oxide deposits.
• The company has identified 12 magnetic anomalies with similar signatures to the Cactus deposit, which they believe could form a cluster of economically viable deposits.
• Hawk Resources plans to complete electromagnetic surveys and soil sampling by the end of March 2025, with target selection by mid-May and drilling in the middle of the year.

In a recent interview, Scott Caithness, Managing Director of Hawk Resources, provided an update on the company's copper-gold exploration activities at the Cactus project in Utah. He explained Hawk's exploration model, recent findings, and future plans for developing what could be a cluster of medium-tonnage, high-grade copper deposits.

New Exploration Model

Hawk Resources has developed a fresh approach to exploring the Cactus project, differentiating itself from previous exploration efforts. Unlike past operators such as Rio Tinto, who searched for very large-scale, low-grade porphyry copper deposits without success, Hawk is targeting medium-tonnage, higher-grade copper deposits with gold and silver credits.

"What we believe is that there's opportunity for medium tonnage, higher grade copper deposits. The sort of grades that have been mined in the past at Cactus are 2%. Historically it mined about 1.3 million tons of 2% copper with a 0.3 - 0.4% gold credit and also a small silver credit."

This strategic pivot is based on the historical production at Cactus and other deposits in the district. The company sees potential for a cluster of smaller, high-grade deposits rather than a single massive porphyry system, which could collectively represent a significant copper resource.

Historical Context & District Potential

The Cactus district hosts several historical mines and prospects beyond the main Cactus deposit. These include the Comet mine, which was gold-rich with copper credits, and the New Years prospect which Hawk recently drilled. These deposits are distributed along a structural zone with approximately 1 kilometer of strike length.

Importantly, Hawk believes that the Cactus deposit itself contains more mineralisation than was historically extracted. The company has conducted 3D modeling of the deposit and determined that significant mineralisation likely remains in the ground. This assessment is supported by post-mining drill results, including a Rio Tinto hole that intersected 42 meters at 1.9% copper and 0.6 g/t gold.

Recent Drilling Success

Hawk's October 2024 drilling at the New Years prospect, located 300-400 meters from Cactus, yielded impressive results that validate their exploration approach:

• 26 meters at 1.3% copper from the top of one hole
• 30 meters at 0.8% copper from the top of a second hole

Both intercepts represent oxide mineralisation, which is significant because oxide copper deposits can potentially be processed through heap leaching, a relatively inexpensive method that could enhance project economics.

Interview with Managing Director, Scott Caithness

Advanced Targeting Methodology

The company is applying multiple advanced exploration techniques to refine its targeting strategy:

• Magnetic surveys: Using high-quality drone magnetic data originally collected by Rio Tinto, Hawk has identified Cactus as a magnetic low anomaly and found 12 additional magnetic anomalies with similar signatures.
• Induced Polarisation (IP): The company has reprocessed existing IP data, confirming that Cactus appears as a resistivity low anomaly.
• Structural analysis: Hawk has identified that Cactus sits at the intersection of two major structures, with most of the newly identified magnetic anomalies also occurring along structures and structural intersections.
• Soil geochemistry: The company has conducted extensive soil sampling, identifying copper anomalies up to 0.1% (1,000 ppm) against a background of about 30 ppm.
• Electromagnetic (EM) survey: Currently underway, this survey aims to identify conductive bodies associated with previously defined anomalies.

This multi-faceted approach enables Hawk to systematically rank and prioritise targets for drilling, maximising the chances of success despite the constraints of a junior exploration budget.

Near-Term Plans & Timeline

Hawk Resources has laid out a clear timeline for advancing the Cactus project:

• Complete electromagnetic surveys and supplementary soil sampling by the end of March 2025
• Receive and interpret soil sample assays (including new gold assays) and EM results by late April/early May
• Finalise target selection and drill program design by mid-May
• Commence drilling toward the end of the second quarter (mid-2025)

Given the nature of the targets, Caithness indicated a preference for diamond drilling and angled holes, as the suspected breccia pipe deposits are likely subvertical in orientation. This approach would differ from historical vertical drilling that may not have properly tested these targets.

Economic Considerations

The economic model Hawk is pursuing focuses on grade rather than massive scale. While major mining companies typically require enormous deposits with grades as low as 0.3-0.4% copper, Hawk's targets of 1.5-2% copper would compensate for their more modest size (estimated at 5-10 million tons per deposit).

"We're looking at something that's got a much higher grade, and that's where we believe that the economics will come in because obviously grade is particularly fundamental. We won't necessarily have the same scale of operation, but we'll have really good grades."

The presence of near-surface oxide mineralisation introduces the possibility of heap leach processing, which Caithness described as "a very cheap and economic operation to have." This could serve as a "sweetener" to the project economics, potentially enabling earlier and less capital-intensive production.

Target Delineation & Resource Development

If drilling proves successful at identifying one or more of these high-grade deposits, the company believes they could move quickly to resource definition. Unlike massive porphyry systems that require extensive drilling programs over many years, these more discrete targets could be delineated within 6-12 months according to Caithness.

This accelerated timeline would be contingent on market support, funding, and regulatory approvals. In the United States, drilling permits require archaeological surveys to ensure that historical mining remains or cultural artifacts are not disturbed.

The Investment Thesis for Hawk Resources

• High-Grade Focus: Targeting copper deposits with grades of 1.5-2%, significantly higher than many producing mines (0.3-0.4%), providing potential for strong economics despite smaller tonnage.
• District-Scale Potential: Evidence suggests a cluster of high-grade breccia pipe deposits across the property, with 12 magnetic anomalies identified with signatures similar to the known Cactus deposit.
• Proven Mineralisation: Historical production of 1.3 million tons at 2% copper plus gold/silver credits, with post-mining drilling indicating additional mineralisation remains (e.g., 42m at 1.9% copper).
• Systematic Exploration Approach: Multi-layered targeting combining magnetics, IP, EM, soil geochemistry, and structural analysis increases probability of discovery success.
• Accelerated Timeline: If successful, the discrete nature of these deposits could allow for relatively quick resource definition (6-12 months) compared to traditional porphyry targets.
• Strategic Timing: Positioned to deliver copper discoveries as global demand increases from electrification and green energy transition, with shrinking project pipelines worldwide.

Macro Thematic Analysis

The copper market faces a significant structural deficit over the coming decade driven by accelerating demand from electrification, renewable energy, and the global energy transition. Electric vehicles require 2.5x more copper than internal combustion vehicles, while renewable energy infrastructure demands 5-10x more copper per MW than traditional power generation. Meanwhile, copper supply growth is constrained by declining ore grades at existing mines, limited new discoveries, and lengthening permitting and development timelines.

This imbalance creates a compelling opportunity for advanced exploration companies with high-grade deposits in mining-friendly jurisdictions like Utah. While major producers focus on billion-ton porphyry deposits, companies like Hawk Resources are strategically targeting higher-grade, medium-tonnage deposits that can potentially be developed more quickly and with less capital.

The oxide component at Cactus is particularly significant, as it could enable shorter-term production through heap leaching while deeper sulfide resources are developed. As Scott Caithness notes:

"Grade is particularly fundamental... we won't necessarily have the same scale of operation, but we'll have really good grades."