Cascadia Extends 2000S Zone Through Step-Out Drilling

0:04 Hello everyone and thank you for joining us for another live Cascadia Market Update. Today we're joined by Andrew Carnight, VP of Corporate Development to discuss this week's news of 6 additional drill holes from the company's fully funded 2026 exploration program. As for the format, I've prepared some questions for Andrew, and if you have any questions of your own, we'll address them at the end. So please do, if you have questions, submit them using the chat box at the bottom of your screen. And As always, this event is being recorded and will be made available for replay shortly after we conclude. Those housekeeping items out of the way, let's dive in. Andrew, thank you for joining us. The headline result from this news release is the 52.84m intercept of 1.04% Copper and 0.37g per tonne Gold at zone 2000 S.

0:51 Can you walk us through why this particular hole stood out to the team and what it tells you about the quality of mineralization you're finding as you step north? Yeah, thanks Kyle. Thanks for having us today and for diving into this with me. I mean, I think we're seeing really strong, really robust mineralization here as we move to the north of the 2000 S zone. And particularly interesting is, you know, we're seeing this broad intersection now over 1% copper alone, but it's also got 0.37 grams per tonne gold, which is a bit higher gold than we're seeing elsewhere in parts of the system. I think it's kind of early days still in this step-out program. We've got a bunch of other holes pending in that area. So it's probably too soon to speculate whether that's

1:31 a broader trend in increasing grade, but it's certainly very interesting to see that more robust, stronger grade as we are stepping to the North here in an area that's fundamentally really underexplored. So yeah, quite exciting. And Graham described the step-out drilling north of zone 2000S as extremely encouraging and noted it has nearly doubled the previously defined strike length of the zone. What does that kind of expansion mean for how you're thinking about the deposit's growth potential this season? Yeah, I think we've kind of really pivoted a bit as to what our original exploration plan was for this year. We had some holes planned to test this area. There was a previously identified gap zone between the 147 deposit and 2000S. We were going to do a little bit of work here testing it, but we weren't necessarily that optimistic that we were going to find the degree of mineralisation we have. It's really shifted our focus to put a lot more resources into testing this area, given it's immediately adjacent to the existing resource.

2:29 Really, it's filling in between 2 known deposits. The best possible place to be finding mineralization because it's really close to where you'd already be mining the existing material. I think this is even more encouraging than what we were expecting at the start of the season. Being able to find this mineralization so close to the existing resource, but again, well outside of the boundary of that, really shows that this thing is wide open for additional exploration and growth.

2:55 So you touched on the reinterpretation of the gap zone as a separate raft west of the main trend. How did that new understanding come together? And how does it change the opportunity in the 600-meter gap between 2000S and 147 zones? Yeah. So, you know, drilling by the previous operator in 2024 had tested this IP chargeability anomaly in this area and they called it the gap zone. And so the interpretation previous to this year was that you had a fault or some structure truncating the 147 zone at its south extent, and that there was probably a similar truncating structure at the north end of 2000S. And then this would have been the main continuity of mineralization and the interpretation was over to the west, maybe there's this other raft that comprises the gap zone. Well, the original thinking was maybe that's a shift of the main zone over there, but drilling hadn't been showing a strong grade and it was a much narrower interval. So we were starting to wonder, is that just because we're deeper in the zone? Is the zone missing there? We did drill a hole testing that earlier this year, I believe it was hole 43. We hit that gap zone, but again, it was relatively narrow, lower grade. So it

4:07 was interesting, but it kind of had muted our expectations about drilling in this area. Well, then we shifted to working at 2000 South and just kind of continuing to step north off of the known zone of mineralization there. And that's where we found, well, wait a second, actually, the primary trend just seems to continue kind of straight up towards 147, which is much more kind of eastbound of where that interpreted gap zone is, and right along strike of the main trend of mineralization. So we're kind of going back and looking at the old data and saying, well, okay, what was it that caused them to think that this area wasn't mineralized? And it seems to be just a couple holes that may have just slightly been mistargeted and missed the main structure, but were interpreted as kind of truncating drill holes when in reality, they just weren't in the right spot to test it. It means that the 600m gap between the zones is actually wide open as opposed to potentially being truncated like it was previously interpreted.

5:00 Just to wrap a nice bowl on this, can you help investors picture what it would mean if drilling successfully closes the gap between the 2 zones? Yeah, I mean, I think it's huge, you know, because we've currently, when it was last studied in the 2023 PEA, you know, They were looking at open pit mining primarily, and you've got kind of a separate pit at this northern zone. And then the 2000S zone actually didn't come into that PEA because it was a little bit too small to justify the stripping and the infrastructure to mine it. So now if you connect the 2 of those, well, that comes into one pit, massively reduces the amount of stripping and development needed from 2 separate zones. But more importantly, the grades we're seeing and the extended depth, we're very optimistic that we're going to be able to go in and look at this as an underground mining operation in addition, which really opens this thing wide open at depth. And continuity is so important for underground mining because if you're going down there and putting in that infrastructure, being able to just continue along the long zone, super, super important.

5:59 So if we connect the dots on those 2, that's hugely important from an underground mineability perspective.

6:05 No, I agree. So with 20 holes and roughly 10,650 meters completed out of the planned 15,000 meters, you're well into the program. How would you characterize the season so far relative to your expectations going in? What are you most looking forward to testing with the meters that remain? It's safe to say things are going even better than we expected. We are ahead of schedule. The drill program is going really, really smoothly and we're finding mineralisation in places that we weren't expecting or we'd hoped we would, but we didn't have necessarily that high expectations for. I think it's been very, very successful. There's still a lot of work to be done. We've refocused in on this northern extension of 2000S just because we've been so excited by what we've been seeing, but there are other targets on the property that we still do want to get to and we will get to later in the season. I'm really excited to see what comes from the rest of this 2000s Northern extension.

7:02 And we mentioned the news release. We do have a number of holes further north of this that have been completed that we said have intersected mineralization. We don't have assays back from those yet. So really excited to see what comes back from that as well as some of the other targets we're going to test. Right. Several holes have intersected mineralization. And some of the deepest points ever tested in both 2000S zone and 147 zone with assays still pending. What excites you about the depth potential here?

7:32 I think really, as I mentioned earlier, we're starting to look at this thing as in future, a combined open pit and underground operation. We're still doing the work to really assess the feasibility of that underground piece, but the grade seemed good, the width seemed good, and just based on the geometry of this deposit, It's a steeply dipping, well-structured deposit in favourable geotechnical conditions. It should work well from an underground mining perspective. So as we find more mineralisation deeper, if we're looking at this from an underground perspective, that's potentially wide open. I think drilling some of the deepest holes ever in this deposit and finding mineralization there is exciting. It tells us there may not be a defined bottom to this system yet, which really just opens the door for significant continued expansion and testing. Last update, I had Graeme on and we chatted about this, but I think it's an important thing to resurface just in case we have new viewers to the story.

8:25 Historically, much of the drilling at Carmack's focused on oxide mineralization with holes often stopped once sulfides were hit. Can you explain why the sulfide expansion story is such an important part of Cascadia's thesis, including the metallurgical advantages?

8:40 Yeah, thanks for that. And I'll just step back and give a little bit of history on this for any new viewers that are tuning in. I mean, this project has been around since the 1970s. It's been explored by a large number of different companies over the years, but much of that historical exploration really focused on looking at this just as an oxide copper heap leach operation to the point where they actually took it to mine permitting in the 1990s. They stripped the site for the heat bleach, but ultimately never built the mine. But what that means is that so much of that historical exploration was really constrained around just looking for oxide. And the depth of oxidation is limited. You eventually run out of it. And so they'd often just stop drilling once they got through that oxide area and notably there's some places particularly 2000 mass in 1213 where there's significantly less oxide and you get into sulfide much much closer to surface And so that means when they were drilling those zones off historically, they did they just stop, you know There was still mineralization there. It was sulfide mineralization, it was open, but it wasn't what they were looking for, so they'd effectively walk away from it. And that gives us this huge opportunity to go in there now and do some pretty straightforward follow-up work, just continuing to step out on where we know there's sulphide mineralisation, but they never did the follow-up work because it just wasn't the focus at the time.

9:53 On the metallurgical point, the test work has shown that the sulphide floats extremely well. The concept that we're pursuing right now is a conventional milling and flotation operation. Very similar to the Minto Mine to the Northwest that was a past producer that successfully operated with that system of recovery on a very, very similar style deposit. So shifting to that, that unlocks the potential to go after the sulphide mineralization,

10:15 which recovers really well and in fact, recovers better than the oxide. So as we find more sulfide mineralization, that's just gonna shift the balance towards an even better recovery profile overall for the property. Great, thank you, Andrew. For people that are just joining us, I have one last question for Andrew here. If you have any questions, do get them in the chat before we wrap up. There have been 2 questions upon registration that I'll ask you right now. The first one is regarding Agnico's 19.9% comes with top-up participation and board nominee rights, but its earning is on catch, a Gold asset. Does that agreement even reach a Carmax-only Copper deal? Could Cascadia sell JV or bring in a Copper strategic without triggering Agnico's consent rights?

11:02 And is the stake deliberately parked below 20%? Thanks for that. For those that don't know, in April we announced that we were bringing in Agnico Eagle as a strategic investor in Cascadia and we also entered into a strategic exploration alliance with them, really focused on Gold-Copper exploration in the southern parts of Yukon. We had a bunch of early-stage assets there, including our catch property, and that's all been put into that strategic alliance with their funding the exploration work that's being done to advance those projects. That's a non-dilutive exploration opportunity and upside exposure for our shareholders. If we collectively make a discovery with Agnico in that area, that's a huge benefit to us. But on the flip side of that, they don't actually have any structured earn in rights into the CarMax project. Their exposure to CarMax is through that investment in the company at the equity level. And yeah, they're at about 14% right now with the ability to get up to 99 through exercise of warrants. Yes, that is under the 20%, which is a pretty typical thing you see with most strategic investments is to stay under that threshold for a variety of reasons.

12:06 As we said when we announced this, they

12:07 have a right of first offer on Carmex. We can't just go off and do something without them, but there's no strings attached there. There's nothing that prevents us from bringing in someone else with more of a Copper focus to help us advance it. But for the moment, Agnico's investment has given us the resources to really expand this year's drill program and get after it. I think they're excited, hopefully they're excited by what we're seeing and we're continuing to work with them, as I say, on the regional alliance as well. I'm sure they're excited with what they're seeing. The same individual had a follow-up question, a different one. Selkirk's mental restart is 35km away and targeting and production decision by 2027. Has Cascadia evaluated a satellite feed or shared infrastructure scenario for Carmax Sulphite and any internal work? Plus, is Carmax Concentrate compatible with the mental flow sheet given roughly 57% of your plan is oxide?

13:03 I think it's really too early for us to look at things like that. There may be district scale opportunities and I think really there's a lot of work to be done to explore by both companies, the areas kind of in between the 2 of us. Right now we're pursuing this just as conceptually as a standalone operation. That's what was evaluated in the 2023 PEA. And our focus is really on growing this resource as much as possible this year or next year. You know, I'm trying to come up with that updated resource by the end of next year. That's gonna better quantify what we have. They're busy working on their restart plan as

13:34 well. I don't think any of this precludes looking at various opportunities for district scale operations down the road. But at the moment, our focus really is on advancing it conceptually as a standalone operation. We think that is going to be very economically viable. The PEA suggested that it would be. As we grow it, it's only going to look even more favorable. And then if there's opportunities for shared milling infrastructure or something down the road, that's just going to be an even better case than an already economically viable standalone operation. Great. Thank you, Andrew. I will provide this last question as a way for you to do some closing remarks. So if people came in, there is one thing I forgot to mention during the beginning of the chat. If you'd like to meet with the Cascadia team, There is a request meeting button when we close off here, so feel free to submit that request if you'd like to meet with the team and learn more.

14:24 We'd be more than happy to provide you that the information to the Cascadia team. It does look like we might have got a question in the chat here, so a couple. Great question, Does the PFS assume a standalone build or does the project economics require a strategic JV partner for development capital? Is Agnico structured to fill that role?

14:47 To date, there's a PEA done. We haven't gone to PFS yet. The PEA was done in 2023 by the prior operator and it doesn't go into the details of project financing. That's something for the future to consider once much more work has been done to take this kind of towards a feasibility level. So I think it's too early to say on either way on any of that. Right. And Noah has a question here. Great work with the drilling this season. If you have extra time later this season, since you are ahead of schedule, What work do you see yourself doing with extra time? I think we're just going to get, we'll see. Again, the budget was for 15,000m. We have to decide internally if we want to extend that or not. But if time allows and budget allows, I think it would be really interesting to a, drill off more of this 2000S North extension. We've been tracing it, but it'd be nice to start doing holes up dip and down dip as well to kind of fill that out from a resource perspective and get a better idea of the vertical extent of that. So that would be interesting to pursue.

15:46 But we also want to get to some of these other targets. The original plan at the start of the season had us drilling at 1213 by now. That's just kind of been delayed a little bit because we're even more excited about this 2000S extension. So I think we do want to get down there. We've also got a parallel target called Zone 14. That's about a kilometre, 500m, sorry, to the east of this. It looks like it's a parallel structure. That was drilled in 2007 by a previous operator and they were hitting 16m 1% Copper, but it was all sulphide. They kind of walked away from it without doing follow-up work. That is an interesting target. If we can identify a whole parallel structure, very compelling. We plan to get out there actually later this week with one of our drills and start work on that target. Then finally, there's about I think it's 11km to the north, There's a target called Zone A that was drilled in the 1980s. It had some of the highest grade Copper and Gold results ever drilled to date on the property.

16:38 That's really interesting. There are structural complexities out there that I don't think were historically understood. We really want to get out there with a modern drill, capture some modern data on that target as well and see if we can kind of understand what the opportunity is up there.

16:52 That's great. I think that answer addresses a lot of what I'm going to ask you for the final question. So I will ask it and just take this as your closing remarks and for what people can expect moving forward. But looking beyond the current focus area, you have zone 14, zone 12, 13, and the higher grade zone A still to come this season. What should investors be watching for as the program moves into these targets and how do they fit into the bigger picture of CarMax? Yeah, I mean, I think I touched on some of that already, but I think I'll take the opportunity really just to talk about the bigger picture here. We've really been focused on the CarMax deposit itself, which is just 1 target on 180 square kilometer land package. This is a huge property. It's all road accessible, it's near power, we've got great infrastructure, but the previous ownership structure, this thing's languished for a long time. It was actually only consolidated into one property in, I believe, 2018.

17:47 It hasn't seen systematic modern exploration across the property. There's so much work to be done. I think there's a ton of additional targets to be discovered. We're starting some of that this year. We announced in July that we completed a QMeg survey across the entire property. That's really interesting. It's a high-resolution airborne survey that should give us a really nice 3D magnetics model of the entire property. We know magnetics is a really, really good diagnostic technique for finding these mineralised rafts. So we're waiting for the process data on that. That's going to be really great for targeting at the deposit scale, but also looking at some of those other targets across the property. We're doing a ton of soil sampling right now. As I said, we're going to get out and start trying to drill some of these other peripheral zones that have been previously identified while we also do the work to see what's been missed previously, what's just undercover and hasn't been discovered before.

18:37 There are so many modern techniques now for seeing through that cover and identifying this mineralization. We're going to, this year and next year, start systematically rolling that out across the entire property. Great. Andrew, thank you