Welcome everybody. We're just populating the room here. As everybody comes in, we'll start the webinar in a few seconds here. Okay, that's probably good. Welcome everybody to the American Pacific webinar on July 30th. Appreciate everybody taking the time to come in and join us. Today you've got myself, Warwick Smith, and Eric Sederholm. We've also got Korbon McCall, who may be new for some of you, but has worked for us for 18 months or so now. Korbon, that's about right, isn't it?
That's right.
Korbon's an exceptional geologist who's been working alongside Eric down at Madison for us. Joness Lang, President of American Pacific. Christina is online, although off camera as well. I'm going to share my screen. We'll show a few different things today, and we'll all take turns talking here, but we'll start here just to show a lay of the land here to begin with. Just to give you guys a corporate snapshot, there is about a $56 million market cap for American Pacific. $13 million in cash presently. Two flagship assets, the Madison, which we'll talk mostly about today, and then Palmer, which we'll touch on at the end as well, as well as a portfolio of really high-grade gold and silver projects down in Nevada. Michael Gentile is our largest shareholder, owns about 14% of the company.
Okay, so in terms of the key takeaways and highlights from phase one this year, this year and last year, we've continued to see those near mine extension drill results yield significant gold and copper mineralization well beyond the areas that were historically mined. Today's news highlighted a really key step-out hole, 175 m away from Broadway, northwest towards Madison. This builds on a past Rio hole that also hit very high grade. The hole released today, 10.2 g over 7.6 m, and that included up to 41 gr gold. That's one of the biggest takeaways from this drilling as we're now seeing these two historical mine areas connect for the first time in project history.
Another takeaway we won't spend too much time on, it's not a near-term focus, but we did do some sampling and drilling in waste material areas at the project, again yielding very good results, highlighting a potential opportunity for cash flow in the not-so-distant future. Lastly, kind of the cherry on top or the icing on the cake, if you will, is the geochemical signatures, potassic alteration, everything we're seeing pointing to a buried porphyry system here at Madison. We view the skarn here at Madison as having significant merit on its own and working towards a resource estimate likely next year there for the skarn. On top of that, we'll be taking a deep porphyry shot or two later this year. This is one of the figures from the press release today. You can see holes one and two there.
Those were previously released, showing significant mineralization extending beyond Broadway, up to 23 and 11 g gold in hole two there, within a 19.8 m interval averaging 2 g . Those holes, along with several others in this pinkish shaded corridor you're looking at, also have geochemical signatures indicative of a porphyry down plunge. Hole eight we touched on with the significant mineralization. You can see some of the contouring there now as we look at how these two systems could connect at depth. Hole five, again, increasing that copper envelope with 0.5% copper over 27 m as well. Warwick, I'm not sure if you want to add anything there.
No, that's great. We're going to see that figure a couple of times here as we go through a few different things. What I'm going to key up for you now is we're going to show you guys two 3D models that we're going to speak to. One that focuses initially on the drill results of today that's going to focus more in on that figure that we just showed. We're going to highlight the porphyry target that we're incredibly excited about as well. Eric and Korbon are going to walk you guys through that. We'll kind of do that as a one-two punch with a couple of slides in between. Let me start on the video here and get this shared full screen here. This is the claim block that you're seeing at Madison. It's 2,500 acres.
I think one of the things that we want to focus on here is when you're looking at these old mines, the vast bulk, 95% of the drilling has been done at Madison, which you're seeing on screen now. There's your Madison portal coming up to where the surface is here. You're going to see our crushing facility there. You're going to see our core storage sheds just ahead in camera view. That house that you see there is actually what we use for our office. The other thing I'll point out is you'll see those power lines. There is power directly to site. What you're seeing now is the old Broadway mill. This is a mine that we haven't talked that much about, but it's coming into prevalence now. This was in production from the late 1800s till about World War II.
Produced 144,000 oz of gold at surface, all in oxides, at an average of 9.9 g per ton. Really high-grade oxide. Back then, of course, when they drilled into the sulfitic material, they stopped mining and just followed and took the oxide that they could get. I'm going to pass off to Eric and Korbon now to talk about how this, for the first time, we've got Broadway and Madison connecting. Eric and Korbon, let me pass off to you.
In the past, there's been evidence or some evidence that maybe they did link up, but really all the programs that have been done previously just haven't gotten to the stage that we have. We've taken data that has been sort of long lost, not that it's bad data, but it was not incorporated into our models. Drilling the holes that we drilled, especially eight this year on top of the hole, the high-grade hole that Rio terminated their program with five years ago, shows pretty compelling evidence that these two systems do link up and vector down to a source rock at depth, assuming it's igneous or a porphyry style of mineralization at depth.
Yeah, to piggyback off Eric there, what went into this model compilation was nearly 60,000 m of drilling and over 15,000 samples. It's helped build this robust model you're seeing now.
Yeah, to jump in on that, the gentlemen being Eric and Korbon, Zach as well, and then with the help of our 3D modelers have done an excellent job of putting together the very first geochemical 3D model. Guys, maybe you want to talk a bit about that for people, what this means. What are we seeing within this model before I show it? Just kind of the work that went into that, finding that IP survey and the potassium survey, all the different surveys that you did, because it's an awful lot of work to get to this point before you're going to go and drill for this big porphyry copper-gold target as well.
All right, Korbon.
Additional work that went into the geophysics was we found an IP survey that had been just gathering dust in an old shed. That saved us about $250,000 worth of effort. We also incorporated a gamma and mag drone surveys to help identify alteration at surface.
Excellent. I'm going to share here some of the slides as we get in now to talk about this porphyry copper-gold target that we're excited about. Korbon, I've got this up on screen here so you guys can walk through it for people.
Yeah, some of the pathfinders that we're looking for in terms of porphyry exploration, you'll see here the main ones being gold, silver, arsenic, bismuth, but we're also seeing very high levels of tellurium. Some numbers there, elevated moly up to 102 ppm, bismuth at 0.23%, and tellurium greater than 80 ppm. The alteration assemblages, historically were mined in the skarn themselves, and we're also seeing retrograde alteration to include epidote magnetite skarns. Potassic and phyllic alteration we're seeing at the termination of these historic drill holes, which never drilled beyond 400 m. Previously mentioned the magnetic low and IP surveys, and we're in the structural and tectonic setting that is called the Idaho-Montana Porphyry Belt that also houses the Butte deposit, which historically produced 21 billion lb of copper. We're seeing skarn-hosted gold-copper-silver mineralization with a copper tenor increasing at depth.
We believe that shows leakage from a concealed porphyry source.
Now, on top of the porphyry, which we're pretty excited about, the expansion of the skarns and the skarn mineralization and that type of alteration appears to move to the southeast. We have found up to 7% copper, 11 g gold in surface samples over the last year doing our field work. This indicates that we have potential to increase the skarn and increase that particular type of mineralization quite a bit as we move off to the southeast. If you look up and see that little yellow oval there, that's pretty much where 95% of the drilling has been done historically. There really hasn't been a lot of attention paid to the other deposit types and the other areas that are now showing up as being geochemically quite anomalous.
We're also seeing some CRD potential there, which is not a surprise when you see a skarn and you're chasing after a porphyry. The values up to 13 g silver, 7% lead, and 5% zinc are strongly indicative of a CRD presence.
One thing to mention here is the footprint that Eric spoke about, a historic mine site. It's maybe 0.5 km wide, but we've expanded the exploration footprint to four by 2 km .
Excellent.
As mentioned, we did some block modeling with some of the geochemical pathfinders. This first slide you'll see is bismuth. You'll notice there's a domain forming and plunging to the bottom left of your screen there. Same thing here with moly. Moly, in this case, is marking the edges of the intrusive body as it comes in contact with the carbonate sequence, also plunging in the same direction.
This really shows clearly that there is a break in between the mineralization between Madison, off to the left there on the far left slide, and the Broadway. Traditionally, that's been thought of as you just drill in between it and these things will connect. What we've done with our geochemical surveys and with our mapping as well is show that this is more of a wishbone shape so that these things, as they move to the west, are merging clearly and becoming one feeding system.
You'll notice here that the Madison side of the deposit is tellurium dominant, which is highly exciting for us. That indicates that we have a tellurium overprint.
Once again, indicative of a possible porphyry source. This slide, once again, shows the work that we've done and the varying strikes of these two systems. They are chemically somewhat different, but apparently they are sharing the same conduit, the same vector into a deeper target.
Very good, gentlemen. I'm now going to share the 3D model that's going to take you through the porphyry target, which Eric and Korbon will speak to. You can find that both these videos that have both been narrated, you can find on our socials and on our website as well for anybody who wants to see these afterwards. We're also going to upload this webinar up onto the website. Before I show that video, you'll note below there's a chat. Anybody who wants to ask questions will answer questions at the end through the Q&A. You can type questions in there, and I'm happy to answer them at the end of this video, which I'll share now and let Eric and Korbon walk you through.
Give me one second here to un-gear this up. As mentioned at the top of the webinar, the work that's gone into this model includes nearly 60,000 m of drilling, greater than 15,000 samples. We've implemented principal component analysis and used domain targeting to help delineate lithologies and mineralization assemblages.
It's an amount of work that has never been attempted before. It's taken a little bit of work, a little bit of geological intuition, and I guess perseverance. What we're about to see, we're very proud of it, and we're also very encouraged by what it's showing us.
I think one of the interesting parts, Eric, is I mean we're sort of looking at this porphyry target as being much deeper than it's ever been drilled before. The deepest holes here have been 400 m. Our intention for this next drill program, which will start likely in September, is to drill some 900 m holes, which we think will then penetrate this porphyry. This is much similar in the way to which a Hercules came together that had 300 holes in it before they drilled that deeper hole. They saw that market cap go from $30 million -$ 300 million after that hole went in.
The major thing that the viewers will notice here is that regardless of the analysis that we ran, the indicators plunge all in the same direction. There's multiple coincident evidence here that shows where mineralization stems from.
Very detailed structural model, very detailed lithologic model, and very detailed geochemical model. As Korbon said, all vectors point the same way, so there's not one that's going some strange direction. These are all clearly pointing at what our data supports as a deep intrusive source, and that's very encouraging. You can see our porphyry target there. Not a traditional porphyry, and it's not directly underneath the system, but those are textbook type porphyries anyways. The porphyries in that area or in that belt generally do rake along these thrust faults, and the source of the porphyry doesn't necessarily have to be directly beneath your skarn.
As Warwick mentioned, the drill hole length is going to be about 900 m, but depth to surface will be about 720 m.
Yeah, it's worth pointing out too that along this belt, the porphyries that are really productive at the surface have largely been exploited, with Butte being a good example. The future of mining there is probably going to be block cave and underground. It's easier to permit. If you find the porphyry, with the copper necessities that the world is going to be experiencing here in the next 20 years, I think a lot of porphyry exploration and mining will be underground.
Excellent work, gentlemen. Quick recap. So $13 million in cash, $56 million market cap. Excellent work by both Eric and Korbon here on this drill campaign, showing for the very first time that Broadway and Madison are connecting with that wishbone shape that you saw on the screen. Good high grade, 7.6 m of 10 g, up to 40 g in that hole, up to 23 g in the other hole, 27 m of 0.5% copper. We're seeing good high grades connecting those two mines for the very first time. We will start this second drill program that we're referencing in September. We're going to lay out that program. We'll have a press release on that coming out in short order.
Basically from now until around September, call it middle of September, we'll have another five or six press releases in that time, laying out once we receive our permit, the drill program as it is laid out. We will have a press release on Palmer next week, giving an update on Palmer. Look forward to getting that out as well. Eric, or sorry, Joness, anything more from you?
Palmer shouldn't be forgotten here. That's a project that had $110 million U.S. spent on it. It's one that we think we can capture a lot of value from going forward. The amount spent on that project is about 3x our current market capitalization. It's a high-grade VMS, as well as Eric mentioned, the need for copper here going forward. Some incredible copper hits. That project has become more copper forward. One that we're also very excited to work on here going forward. More thorough update out next week on that. The last thing I'd say is we've got a number of projects that clearly have not been our focus, that still have a lot of merit. Some of the high-grade past-producing projects in Nevada. We are actively working on potential spinouts there and joint ventures. Another opportunity for additional news flow.
Excellent. I'll jump to the Q&A here. If anybody has any questions, feel free to type them into that question and answer box down below. First one, which I'll pass off to Eric and Korbon, is any plans to test for gold below the 9 g Broadway? They're calling it an open pit, but obviously it's an underground portion there. Plans to drill directly below Broadway, Eric.
The mineralization from the work we've done doesn't, it has a buffer or a barrier called the Reager Creek. It's an intrusive body. It vectors sort of in the same way that what we think when these two structures meet off to the west or the west-northwest. Yes, that will be a part of future drilling as we now understand what we think this is going where the high grade is actually vectoring us to. The deep hole has two real purposes. One is to hit the skarn, down dip, and then continue to chase towards the porphyry. Yes, there will be several holes that will be drilled. One, to expand upon the skarn potential to the south, and then two, to test it to that depth and its link up potentially with the intrusive body.
Yeah, this is going to be an interesting program because one of the things that we're going to do now as a team is step back and look at all the targets. There is a pretty good series of targets here. Eric, maybe you want to talk a bit about that as well. We've talked about there being seven intrusive bodies on the property. How do you go at this next? We know we're going to drill some of those deep holes, but also how do you go and step back now and prioritize these targets? Maybe you and Korbon could talk about that for a second.
Without the data that we've amassed over the last year, we would be shooting a little bit blind, and I think that's what other past workers there and past companies have done. They found something and they just drilled it at an assumption. With our 3D model now, the assumptions are pretty much gone. The targets are now just staring at us to be tested. I probably have never worked on a property that has so much, so many intrusive phases and so many styles of mineralization, which is good and bad. We have a lot of high-grade copper. We have a lot of high-grade gold. That's lore. Everyone knows that. It's been mined in the past. These other areas really have not been tested. There's the odd hole here, the odd hole there. American Pacific now has a very refined program and will drill this systematically, not only to hit the porphyry system that we think might be there, but to expand the close to mineralization oxide and high-grade sulfide mineralization, which has been the staple of the mining there in the past.
Yeah, very good. One of the questions is, please clarify the reason for drilling for the deep porphyry and how do you still feel about the skarn itself?
Pass that to Korbon.
Yeah.
I think Eric somewhat answered that. Drilling for the deep porphyry does, it's a dual-purpose type program. We're going to try to extend the skarn at depth, but also hit into the porphyry mineralization source. Not only are we excited about the depth of the skarn, we're excited about the lateral growth.
Maybe just to add on to that, Warwick, I mean, the skarn has been known. We've seen a lot of high-grade mineralization beyond the historically mined areas. That's a clear focus. That's what we've drilled to date mostly is these shallow holes. We'll continue to do that. Taking one or two deeper shots, given the risk-rewards, it is higher risk drilling. Again, if you're going through skarn mineralization en route down to that target, those types of targets have company-making potential, right? It makes all the sense in the world to take a shot.
Yeah, agreed.
Yeah, very good. I think I'll leave some of these other questions, but no, that was great. Thank you guys. Thank you very much for taking the time to come in and take part in this webinar. Reach out to any of us. You can get a hold of us via the website or via our socials and of course through Christina as well. We are very pleased with what we put out today and very excited to get drilling here aggressively in September. Another press release next week, as Joness mentioned, and a significant amount of news from here to kind of mid-September as we get into this next drill program as well. Both news on Madison, Palmer, and then some corporate news as well that's going to come through. Excited to get all of that out here in short order. We'll be busy. Thank you.
We appreciate it and look forward to being in touch again soon.