12.85m at 503 g/t AgEq: Collective Mining’s Silver Discovery in Colombia

Key Concepts

Greenfield Discovery: Exploration in an area with no prior exploration history.
Silver Equivalent Grade: A measure that combines the value of different metals (like silver and gold) into a single grade, based on their relative prices.
Porphyry Deposit: A type of large, low-grade copper and/or gold deposit associated with a magmatic intrusion.
Alteration Zone: The area around an ore deposit that has been chemically or physically changed by the hydrothermal fluids associated with mineralization.
Mineral Resource Estimate (MRE): A publicly reported estimate of the quantity and grade of mineralized material in a deposit.
Measured and Indicated Categories: Higher confidence categories for mineral resources, based on more detailed drilling and geological understanding.
Inferred Category: A lower confidence category for mineral resources, based on limited geological evidence.
Prefeasibility Study (PFS): A study that assesses the technical and economic viability of a mining project, typically following a Preliminary Economic Assessment (PEA).
ANLA (Agencia Nacional de Licencias Ambientales): The Colombian agency responsible for environmental permitting for mining projects.
Cadaster: A system for recording land ownership and rights, including mining titles.
Reduced Intrusion Related System: A type of porphyry deposit characterized by a lack of oxygen, leading to high-grade veins.
Sheelite: A tungsten mineral.
Tungsten Trioxide (WO3): A compound of tungsten, often used as a measure of tungsten content.

Exploration in Colombia: Collective Mining's Successes and Future Plans

This summary details the recent exploration successes and future strategies of Collective Mining, a company with a significant market capitalization and a strong year-on-year share price increase, driven by its discoveries in Colombia. The discussion highlights three key projects: Target X at Guis, San Antonio, and Apollo.

Target X at Guis: A Promising Greenfield Silver Discovery

Discovery: Collective Mining announced a greenfield discovery at Target X, an area with no prior exploration.
Drill Intercept: A significant drill intercept of 12.85 meters grading 503 grams per ton of silver equivalent was reported.
Geological Significance: The discovery hole encountered multiple veins with different orientations, suggesting a potential for a larger deposit. This is a positive indicator for a vein system that might "bulk out."
Future Plans: A rig is being moved to Target X, with drilling expected to commence in early October.

San Antonio: Porphyry Exploration with Strategic Advantages

Context: San Antonio is located approximately 3 km northeast of the proposed mill site for the Apollo system, making it a strategically advantageous location for porphyry exploration.
Drill Results: Recent drill results include 174 meters grading 1.4 g/t gold, 0.16% copper, and some molybdenum.
Discovery: The company has hit mineralization in three holes, all of which bottomed in strong mineralization.
Infrastructure: The project is situated on the Pan-American Highway with hydropower access, offering excellent logistical advantages.
Alteration Zone: An immense alteration zone, initially reported as 3x3 km, is expected to expand as exploration continues.
Mineralization Type: The drilling has identified both late-stage high-grade porphyry-related veins and a copper-gold porphyry system.
Gold-to-Copper Ratio: A high gold-to-copper ratio (3:1 to 4:1) in current intercepts is a positive indicator. If this ratio holds and the potassic core of the porphyry system is found, the company anticipates very high combined gold and copper grades.
Rig Deployment: The company has increased its drilling capacity at San Antonio, with three rigs now operating on the project.

Apollo: The Engine of Growth and Future Development

Significance: Apollo is identified as the primary driver of Collective Mining's share price growth and market capitalization.
Business Plan: A business plan has been developed to submit an environmental permit application to ANLA, the Colombian environmental permitting agency.
Permitting Timeline: The company aims to submit its permit application in the first half of 2027.
Mineral Resource Estimate (MRE): The first MRE for Apollo is expected in approximately one year. The plan is to categorize the top 1000 meters from surface into measured and indicated categories, with deeper mineralization classified as inferred.
Prefeasibility Study (PFS): Following the MRE, the company will convert resources to reserves and launch into a PFS, skipping the Preliminary Economic Assessment (PEA) phase due to existing internal work.
Production Timeline: If development proceeds linearly, production could commence around 2030.
Colombian Permitting: Colombia is noted as a relatively quick permitting jurisdiction, with an estimated 11-month timeline for permits as outlined in the mining law.
Construction and Production: Construction is anticipated to begin in early 2028, with production following approximately two years later.
Market Conditions: The current market is described as conducive for growth in the gold space, with gold prices near $3,700/oz and silver prices around $43/oz.

Financial Position and Capital Management

Funding: As of June 30th, Collective Mining had nearly $71 million USD in the treasury, fully funding operations for the current year.
Future Financing: The company anticipates needing to raise additional capital in the first half of next year, assuming buoyant market conditions.
Dilution Management: Collective Mining has a strategy to manage shareholder dilution, aiming to build value for existing shareholders, including themselves as significant shareholders.
Share Count: The company has approximately 85 million shares outstanding after five years of extensive drilling, with a goal to keep the share count at or below 100 million shares by the construction decision.

Tungsten Discovery: A Valuable Byproduct

Occurrence: Tungsten mineralization is found from approximately 30 meters from surface, below the oxide zone, down to about 120 meters.
Mineral Type: The tungsten mineral is sheelite, described as coarse and easily separable.
Extraction: The tungsten is expected to be extracted as tungsten trioxide (WO3) and will be a near-term byproduct at the beginning of a future mine.
Significance: This is the first evidence of tungsten in hard rock in Colombia.
Market: Tungsten is a critical mineral with a relatively small global market ($7 billion). The company believes that a byproduct tungsten stream makes significant economic sense.
Government Support: The company plans to engage with the US government, specifically the Department of Defense, for potential financial contributions towards tungsten recovery once a mineral resource estimate is available.

Historical Exploration and Interpretation Challenges

Lack of Historical Drilling: There has been minimal historical drilling in the Guis project area.
Focus on Small Mine: Previous exploration efforts were concentrated around a small mine called the Guis mine, which is not of primary interest to Collective Mining.
Interpretation Difficulty: The system at Guis is described as complex and was not easily interpreted initially. The company has since developed a correct model for a "reduced intrusion related system."
Risk-Taking: The company acknowledges taking significant risks and drilling aggressive holes, with Apollo being discovered around hole 30, not as an initial target.
Geological Analogy: The project's location contiguous to Marmato, which hosts 8.7 million ounces of total resources and historical production, is a key factor.

Leadership and Strategic Appointments

Ned Jalil as CEO: The recent appointment of Ned Jalil as CEO is highlighted. He has prior experience in senior technical and developmental roles with companies like Kimmins Gold and Aion Capital.
Playbook: This appointment is compared to the strategy employed at Continental Gold, where Don Gray was hired after building the Escobal mine.
Mine Planning: Ned Jalil is actively working on multiple mining scenarios for Apollo, aiming to refine the mine plan internally before a construction decision. This proactive approach is intended to avoid past mistakes and ensure a robust plan.

Response to Short Report

Impact: The impact of a short report issued in August is described as "virtually nothing" because it was considered baseless.
Accusation: The report raised concerns about "incomplete cells" in older Colombian mining titles due to the transition to an electronic cadaster.
Explanation: The company explains that these incomplete cells are small areas that cannot be staked by others and ultimately belong to the adjacent title holders. In Collective Mining's case, they own both abutting titles.
Precedent: Similar issues were encountered at Continental Gold, where they were not raised and did not impede operations.

Key Watch Items for the Next 6-12 Months

Drilling: The primary focus will be on continued and extensive drilling across all targets.
San Antonio Drilling: Ongoing drilling at San Antonio.
New Targets: Drilling of new targets is anticipated.
Apollo Exploration: Continued aggressive exploration at Apollo.
Assay Turnaround: Acknowledgment of a slowdown in assay turnaround times, from approximately two weeks to four to five weeks, due to increased industry activity.
News Flow: Expectation of significant and frequent news releases.

Conclusion

Collective Mining is experiencing a period of significant exploration success in Colombia, driven by discoveries at its Guis, San Antonio, and Apollo projects. The company has a clear strategy for advancing these projects, with a focus on developing a mineral resource estimate, conducting a prefeasibility study, and navigating the permitting process for Apollo. The discovery of tungsten as a byproduct adds another layer of economic potential. Collective Mining is managing its finances prudently and is well-positioned to capitalize on the current favorable market conditions for precious metals.