Latest / Kitco MINING / Gran Pilar Gold Project Moves Toward Pilot Production | Brodie Sutherland

Transcript

Gran Pilar Gold Project Moves Toward Pilot Production | Brodie Sutherland · Kitco MINING

• 0:07
  SPEAKER_00: Hello and welcome to Kitco Mining with me, Paul Harris, at the 2026 PDAC in Toronto and Canada.
• 0:13
  SPEAKER_00: Today we're talking about gold and silver exploration in Mexico.
• 0:16
  SPEAKER_00: A great pleasure to be joined by Brody Sutherland, CEO of TocBan, which trades on the CSE under the ticket TOC.
• 0:23
  SPEAKER_00: Brody, welcome to Kitco.
• 0:25
  SPEAKER_01: Thanks for having me, Paul.
• 0:26
  SPEAKER_00: You're exploring for gold and silver in Sonora in northern Mexico, which is one of the country's biggest mining states.
• 0:32
  SPEAKER_00: Your main project there is the Gran Pila project.
• 0:35
  SPEAKER_00: Maybe we could start by talking about what Gran Pila is and how it came into the company.
• 0:40
  SPEAKER_01: Yeah, interesting history.
• 0:42
  SPEAKER_01: Discovered by the Londines in 1996.
• 0:45
  SPEAKER_01: They drilled some incredible holes back then.
• 0:48
  SPEAKER_01: Gold was$300 an ounce.
• 0:50
  SPEAKER_01: Obviously, different market today.
• 0:53
  SPEAKER_01: They had walked away from the project in 1997, was held by prospectors for the better part of 25 years.
• 1:01
  SPEAKER_01: We came across it.
• 1:02
  SPEAKER_01: We liked the potential, but it was a small area that they held.
• 1:06
  SPEAKER_01: We knew we needed to consolidate more ground to make it attractive to bigger investment.
• 1:12
  SPEAKER_01: And it took us three years to build a relationship with a local private owner.
• 1:17
  SPEAKER_01: And we negotiated a deal to expand that property to 22 square kilometers.
• 1:22
  SPEAKER_01: And just this past year, we permitted to be able to drill across that entire area.
• 1:28
  SPEAKER_01: This is an epithermal system or systems that we have.
• 1:32
  SPEAKER_01: We've got two key target areas.
• 1:34
  SPEAKER_01: And we also permitted a pilot mine facility that uh has a 10-year life to it.
• 1:40
  SPEAKER_01: So we're looking to build that out this year while we keep drilling.
• 1:43
  SPEAKER_00: Okay, I want to talk about the uh the pilot mining operation in just a moment, but uh uh let's talk about sort of the lead up to get there in terms of uh if you're gonna be doing sort of pilot mining, you're gonna have to have resources and things like that.
• 1:55
  SPEAKER_00: So, what have you done in terms of the exploration program so far?
• 1:59
  SPEAKER_01: So, for the last five years, we've drilled ourselves uh close to 18,000 meters now.
• 2:05
  SPEAKER_01: We're planning to do another 20,000 meters this year.
• 2:08
  SPEAKER_01: Uh we did a bulk sample of 1,500 tons in 2023.
• 2:12
  SPEAKER_01: Uh that had a head grade of 1.9 grams per ton gold from material rate at surface on our main zone.
• 2:19
  SPEAKER_01: And uh we've been advancing the metallurgy, doing now step-out drilling, expanding the broader system that exists there and preparing it for what we see the next step in that we want to now establish how big the resource can be across Grand Pilar and advance the pilot to further showcase the proof of concept uh that this is a very cost-effective, cost-effective jurisdiction to be in.
• 2:45
  SPEAKER_00: And now are you planning on advance, continuing to advance the exploration and the pilot simultaneously?
• 2:50
  SPEAKER_00: Exactly, yeah.
• 2:51
  SPEAKER_00: Okay, and the pilot will be the ultimate test that the metallurgy works.
• 2:54
  SPEAKER_01: Yeah, we've done extensive tests so far, they've all been extremely encouraging.
• 2:59
  SPEAKER_01: Heap leach is the standard in Sonora.
• 3:02
  SPEAKER_01: Uh, we've shown that that works.
• 3:04
  SPEAKER_01: We've also done lab-scale studies of gravity and agitated leach.
• 3:08
  SPEAKER_01: We're getting over 95% recovery of gold.
• 3:10
  SPEAKER_01: And uh we'll further explore that with our pilot facility as we expand it.
• 3:15
  SPEAKER_01: Uh, but it's an exciting time, and and now we can fully step out and see how big this system truly is.
• 3:22
  SPEAKER_00: So uh again, I think it's quite unusual to have that sort of permitted pilot mining operation.
• 3:28
  SPEAKER_00: How did that bit come about?
• 3:30
  SPEAKER_01: You know, as looking at the market through the tough cycle we've been in the last few years, obviously that's changing now.
• 3:37
  SPEAKER_01: Uh, but again, we wanted to showcase the benefit of being in Sonora, and that's the fact that you've got great infrastructure, very low capex for a lot of these heap bleach projects, and the opportunity was there to permit that pilot facility quickly.
• 3:51
  SPEAKER_01: And uh, we also wanted to showcase that there has been a lot of uncertainty of permitting in Mexico of late.
• 3:57
  SPEAKER_01: Uh, that's also that cloud is lifting, and this was a key piece in that is getting this pilot permitted.
• 4:04
  SPEAKER_01: So uh we felt like it's an appropriate shift, and it also separates us in that we now have a dynamic approach of not only exploration upside, but the pilot facility and what we can do with that.
• 4:16
  SPEAKER_01: Okay, so what are you actually permitted to do?
• 4:20
  SPEAKER_01: We can process on the the first pass 50,000 tons in a heap leach setup.
• 4:25
  SPEAKER_01: There's a six-hectare area that uh you know we we call our playground.
• 4:30
  SPEAKER_01: We can use uh for disturbance for that whole facility.
• 4:33
  SPEAKER_01: Uh we can amend that permit, it's valid for a 10-year span.
• 4:37
  SPEAKER_01: We can continue to amend that to do future passes of uh processing a material there.
• 4:43
  SPEAKER_01: And uh what we plan to do is the first pass heap leach this year, uh also do some on-site studies with the gravity and agitated leach and then see where that takes us.
• 4:53
  SPEAKER_00: So that 50,000 tons you'll be doing this year?
• 4:56
  SPEAKER_00: Yes.
• 4:56
  SPEAKER_00: Okay, and do you have an idea of what the potential gold production from that could be?
• 5:00
  SPEAKER_01: We estimate, you know, we're targeting one to 1.2 gram per ton uh gold material, uh, 70% recovery that we're targeting, uh, that 50,000 tons, we think we can recover approximately a thousand ounces of gold.
• 5:13
  SPEAKER_01: Uh there'll be somewhere between five and eight thousand ounces of silver, depending on recoveries there, and a great starting point.
• 5:21
  SPEAKER_01: Uh, overall cost that we're estimating, you know, targeting approximately 1.8 million US for the full build and processing of that.
• 5:29
  SPEAKER_01: And you know, obviously with today's commodity prices, that that'll generate capital for us as well.
• 5:34
  SPEAKER_00: So you get a bit some cash from that, but you also get some greater clarity on what the actual metallurgy is, how the heat bleach works, how efficient it is.
• 5:42
  SPEAKER_00: Exactly.
• 5:42
  SPEAKER_00: Yeah, and it's uh exciting thing that we were able to do that.
• 5:46
  SPEAKER_00: Okay.
• 5:47
  SPEAKER_00: In terms of the work plan for 2026, obviously the uh the pilot mining operation is part of that.
• 5:52
  SPEAKER_00: Um let's get back to the exploration.
• 5:54
  SPEAKER_00: What's the exploration work plan for this year?
• 5:56
  SPEAKER_01: So, again, uh we've now been able to unlock the broader property, and uh it's never been systematically explored.
• 6:04
  SPEAKER_01: And I that's a rare thing, obviously, in in today's world is having something that you have surface mineralization that hasn't been tested.
• 6:11
  SPEAKER_01: Uh, the property is riddled with our artisanal workings, underground shafts that were obviously chasing higher grade mineralization in the past.
• 6:19
  SPEAKER_01: Uh, we're now fully permitted to test all of that.
• 6:22
  SPEAKER_01: We've got 47 pads in our south block uh that we have access to.
• 6:26
  SPEAKER_01: We've got four target areas in our north block.
• 6:29
  SPEAKER_01: Uh, we've drilled two of those an initial test uh late last year, and from there we'll continue to expand.
• 6:36
  SPEAKER_01: Uh we can permit four drilling uh within a two-week span once we have a new application in place, and we can continue to grow from there.
• 6:45
  SPEAKER_01: So, what we're targeting now for this year is a minimum 20,000 meters of drilling.
• 6:50
  SPEAKER_01: And uh, if we're successful and seeing more capital come in through the warrants that we have, uh we'll expand that program.
• 6:58
  SPEAKER_00: Okay, 20,000 meters of drilling in 2026.
• 7:02
  SPEAKER_00: Where will that get to you?
• 7:03
  SPEAKER_00: With a with a bit of luck, where do you want to be once that's completed?
• 7:07
  SPEAKER_01: You know, we want to be in a place to put out a made and resource estimate.
• 7:10
  SPEAKER_01: Again, the focus has been in one area for decades, and now we can finally step out from that.
• 7:15
  SPEAKER_01: We've had success over the last year showing that things extend to the north, and now we can evaluate how things move to the east in that south block.
• 7:24
  SPEAKER_01: Uh, so we'll see where we're at near the end of the year.
• 7:27
  SPEAKER_01: Uh, if we're happy and feel like we've hit the outer extents of things, then we'll put that into a resource and then uh likely plug that straight into a PA to again showcase the economics and how favorable they are in Sonora.
• 7:40
  SPEAKER_00: What's the overall strategy for the company, Brody?
• 7:44
  SPEAKER_00: Um, with the with the pilot mining operating, it sounds like you're looking at you know sooner rather than later getting into production in in some way, shape, or form in the medium term.
• 7:53
  SPEAKER_00: In Mexico, we've got a number of uh small-scale producers.
• 7:56
  SPEAKER_00: Um, you know, I'm thinking Minera Alamos, Heliostar Metals, Luca Mining, they've done this successfully or they're doing it successfully.
• 8:02
  SPEAKER_00: They're showing that small companies can take that step to get into production and you know control their destiny.
• 8:07
  SPEAKER_00: Is that the tried and tested path you're looking to follow?
• 8:10
  SPEAKER_00: Absolutely.
• 8:11
  SPEAKER_01: Yeah, we see that as the biggest opportunity in Sonora is to showcase that potential.
• 8:15
  SPEAKER_01: Uh, we think as we expand on our resource size, uh there'll likely be other suitors out there looking to acquire something in the space, but uh we see the biggest opportunity for the shareholders is to unlock that re-rate as we go from you know, Monero went through the same progression, pilot took Santana online.
• 8:35
  SPEAKER_01: You know, it's a different company today with the other acquisitions, but that was the initial re-rate that they went through.
• 8:41
  SPEAKER_01: Luca, as you suggested, Heliostar taking on the old Argonaut assets.
• 8:46
  SPEAKER_01: Uh, we see big value upside there.
• 8:48
  SPEAKER_01: And, you know, if you can get quickly in the next you know, two to three years in a space where you've got a fully permitted mine that could process 40 to 50,000 ounces on an annual basis, uh, that's tremendous upside.
• 9:01
  SPEAKER_01: And uh that that's where we can really grow this company from where we are today uh to that next level.
• 9:08
  SPEAKER_00: Yeah, 40,000, 50,000 ounces yeah, that really starts to get quite interesting, doesn't it?
• 9:11
  SPEAKER_00: In this market, yeah, absolutely.
• 9:13
  SPEAKER_00: Okay.
• 9:13
  SPEAKER_00: Now some of those companies you mentioned, that there hasn't necessarily always gone smoothly.
• 9:17
  SPEAKER_00: So um you're able to look at what they've done and perhaps are there some lessons learned or lessons that you can learn from them and how you potentially overcome some of the issues they've faced.
• 9:28
  SPEAKER_01: Yeah, you know, timing's everything, right?
• 9:30
  SPEAKER_01: And uh there's a few advantages we have today.
• 9:33
  SPEAKER_01: One is obviously commodity price.
• 9:35
  SPEAKER_01: Uh, a lot of them are moving through you know$2,000,$3,000 gold.
• 9:40
  SPEAKER_01: Uh that's a different space today.
• 9:42
  SPEAKER_01: There's been uncertainty around permitting in Mexico, and that's starting to clear.
• 9:46
  SPEAKER_01: And I think that's going to give us a big advantage for timelines.
• 9:49
  SPEAKER_01: And you know, we've we've constantly evaluated what they've done.
• 9:52
  SPEAKER_01: I think there's a you really wanted that initial scale when you go to uh to full-scale uh permitting, and you want to be able to get to that larger scale production, I think, quickly.
• 10:03
  SPEAKER_01: And maybe that's uh where some have failed in the past.
• 10:06
  SPEAKER_01: But uh we see a big opportunity here.
• 10:09
  SPEAKER_01: Um, you know, we're we're excited.
• 10:11
  SPEAKER_01: We've got a great share structure.
• 10:13
  SPEAKER_01: You know, we've been around five years with 78 million shares out, just raised 10 million with Stefan.
• 10:19
  SPEAKER_01: Um yeah, and we're excited to take uh the next leap.
• 10:22
  SPEAKER_00: In terms of being able to get there quickly, I mean, obviously, looking at a an oxide heap leach operation, that's about as simple as mining and you know mineral processing gets.
• 10:32
  SPEAKER_00: So with the pilot, you know, what lessons specifically you're looking to learn and to look at and to see to be able to you know subsequently execute without any any any hassle or hiccups?
• 10:43
  SPEAKER_01: Yeah, I mean what we've shown in past metallurgy is that the gold and silver are liberated, so there's a lot of different things you can do to extract it.
• 10:52
  SPEAKER_01: Uh what we want to show with the pilot is that you know, at surface, it's a very oxidized and fractured system.
• 10:58
  SPEAKER_01: Uh a lot of it would be run-of-mill, and there's a finer grain component there that I think we want to fully understand that might be more suited for gravity and agitated leech.
• 11:08
  SPEAKER_01: Uh, so really it's just about optimizing our metallurgy, the recovery of those metals, and uh and having that information in hand as we go towards full scale uh so we don't have any delays or hiccups as we go through that that uh process.
• 11:23
  SPEAKER_01: Okay.
• 11:23
  SPEAKER_00: You you mentioned opportunity and timing, and obviously at 5,000 uh US dollar per ounce gold price, um, it's a very good time to be sort of looking to bring in production.
• 11:33
  SPEAKER_00: You recently closed a 10 million ounce bought deal financing, and uh, I think it'd be fair to say bought deals for companies of your size or something you know, pre-resource or something of a rarity.
• 11:44
  SPEAKER_00: Um, what does that tell you about the the the market we're in and you know what investors have appetite for?
• 11:52
  SPEAKER_01: Yeah, you know, I think there's confidence there, obviously from Stiefle, that uh they like the jurisdiction, they like the opportunity.
• 11:59
  SPEAKER_01: And um, you know, for us, I mean, we've raised all the capital previous to that, non-brokered within our own networks.
• 12:06
  SPEAKER_01: Uh now it's a logical time, I think, to bring in more institutional uh ownership and uh yeah, perfect timing.
• 12:14
  SPEAKER_01: So I mean, obviously we're we're happy that Stefan's uh taken that uh that leap with us, and um you know we're we'll see where we can take it from here.
• 12:23
  SPEAKER_01: But we're excited obviously to have that support, and uh you know, I think it's a great sign for not only exploration but uh for Mexico.
• 12:32
  SPEAKER_00: Okay.
• 12:33
  SPEAKER_00: Now you're trading at about uh you know one dollar Canadian per share.
• 12:36
  SPEAKER_00: You've got a number of warrants and options out there that are in the money.
• 12:40
  SPEAKER_00: How much of that do you think you can uh realistically bring in?
• 12:43
  SPEAKER_01: You know, last year we saw you know we traded from you know 48 cents to a dollar.
• 12:49
  SPEAKER_01: Uh we saw about two and a half million dollars worth of those warrants come in, they're priced at 50 cents and 75.
• 12:55
  SPEAKER_01: Uh the majority of those that have come.
• 12:57
  SPEAKER_01: Uh, we think over the next year we can do something similar, perhaps even more.
• 13:03
  SPEAKER_01: Uh of warrants that are in the money, there's an additional eight million that can potentially come in this year.
• 13:10
  SPEAKER_01: And obviously, if that happens, that we'll expand our drilling and um our exploration efforts and keep growing.
• 13:17
  SPEAKER_00: Okay.
• 13:18
  SPEAKER_00: With the 10 million, the bought deal financing with Stifle, um, how much of that will fund this year's work program?
• 13:25
  SPEAKER_00: How much of that is perhaps let's say cash buffer on your balance sheet?
• 13:28
  SPEAKER_01: Yeah, that'll carry us for comfortably for a year and a half of being aggressive with drilling and the pilot operation.
• 13:35
  SPEAKER_01: Uh, you know, if we're successful with the pilot, that will generate a bit of capital that we can utilize if we do see warrants come in.
• 13:43
  SPEAKER_01: Obviously, that gives us more runway as well.
• 13:45
  SPEAKER_01: Uh, so we'll evaluate as we go from here.
• 13:48
  SPEAKER_01: Uh, but you know, we've we want to use this capital to grow the company, grow our size, and then yeah, see where we're at a year and a half from now.
• 13:57
  SPEAKER_01: Uh and and see what we need to do next to kind of get us to that uh construction decision essentially for Grampolar.
• 14:06
  SPEAKER_00: Okay, well let's uh wrap up, Brody, uh, by reminding our viewers of what some of the key catalysts they can expect to see from you this year are.
• 14:14
  SPEAKER_00: Yeah, we're gonna be drilling.
• 14:15
  SPEAKER_01: Um I'd expect consistent drill results.
• 14:19
  SPEAKER_01: Obviously, we've got one rig on site right now, a second's coming out in the next uh the following two weeks.
• 14:24
  SPEAKER_01: Uh, we've got a core rig that uh is gonna be freed up and available to us in the next month and a half.
• 14:30
  SPEAKER_01: And so with three rigs on site, we expect a lot of drill results coming out of that.
• 14:34
  SPEAKER_01: The buildup for the pilot, I think there's a lot of exciting pieces there with metallurgy and just showcasing that opportunity.
• 14:41
  SPEAKER_01: And then as we get into the later half of the year, it's evaluating not only additional exploration upside, uh, but looking at where we're at for resource potential, uh, building that out and then plugging that into a PA to showcase the economics at an early stage and uh yeah, see where this market's taking us as we go through it.
• 15:02
  SPEAKER_00: We wish you the best of luck with that.
• 15:04
  SPEAKER_00: And Toc Van Ventures trades on the CSE under TOC.
• 15:10
  SPEAKER_00: Brody Sutherland, thank you very much for joining me today.
• 15:12
  SPEAKER_01: Thank you, Paul.
• 15:13
  SPEAKER_01: Yeah.
• 15:14
  SPEAKER_00: And we have much more to come from the 2026 PDAC in Toronto and Canada, so stay tuned and hit that subscribe button.
• 15:20
  SPEAKER_00: I'm Paul Harris, and this is Kiko Mining.