East Star Resources (LSE:EST) — Investor Presentation

0:00 Good morning, and welcome to the ESTAR RESOURCES PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll, and then I'd like to hand you over to Alex Walker, CEO. Good morning, sir.

0:31 Good morning. Lily, thanks very much for that introduction, and, thank you everyone for joining us today. My name is Alex Walker. I'm the CEO of ESTAR RESOURCES. And, with me today is our exploration manager, doctor Tremaine Woods, who is going to provide some assistance in giving some more detail on our targeting for for Ruleker and Telescoy. Purpose of today's presentation is really just to to focus in on these two target areas, ones we've talked about recently and and ones that are the subject of the upcoming exploration program. Just a quick reminder as to the company and our capital structure and what we've achieved to date, more than 230,000 tonnes of contained copper in a resource in this region, the East Region of Kazakhstan. And I'm a major shareholder. We've been supported by, two institutions, one being a family office out of Australia, one being CQS Natural Resources Fund out of London, and been participating myself in in every capital raise since since we commenced.

1:32 This is the area of focus today. For those that have seen, we've, you know, had a three pronged strategy, but we're just focusing on the infrastructure led volcanogenic massive sulfide exploration in the East Region of Kazakhstan, and the red circle that you see there in front of you where we have our JORP resource and our exploration targets. This belt, the Rudne Altay VMS belt is around 800 kilometers long. More than half of the belt is is in Kazakhstan. It's the fourth most prolific VMS producing belt in the world, and we certainly feel like there's still a tremendous amount of exploration and development upside for this belt going forwards. Zoom into our project area, which started off as more than 800 square kilometers, now down to 500 square kilometers and and specifically focusing on two target areas which are immediately ahead of us at the moment.

2:23 It's a prolific belt. It's got some incredibly high grade mines. You can see there, in the Northwest, the Ardemyvsky Mine, which is currently operating by CAS Minerals. Just to the Southeast of that, you have Nikoloskoye, which was the first discovered deposit on the belt in 1749. That's now a tailings dam and is also the location of the Kas Minerals processing plant. And then you go through our license down to the Southeast a little bit further, and you can see the Ochisky deposit also owned by CAS Minerals and and potentially, well, running out of mine life in the very near future. It's a very infrastructure rich region. There is power, water, rail throughout the whole region. There are a number of concentrators which are underutilized today.

3:10 There are two smelters within a 100 kilometers and an international airport. And more to the point, there's tens of thousands of of workers who are employed using in these facilities, some of which will be shutting in the near future. So for us, it's not only the actual physical infrastructure that's in place, but it is the infrastructure that's provided by a community that very much is supported by mining and has been for for over two hundred years. And so that's a really integral thing when you're looking to develop develop a mine in the future. Zooming in again a little bit further to the northeast part of our license area, we have the Teloskoye historical deposit and the Ruleka historical deposit shown here along with our IP anomalies as as labeled on the recent IP survey.

4:03 You can see there both anomalies are within 11 kilometers of the Nicolauscope processing plant, and both are proximal our our anomalies are proximal to the historic deposits. The deposits are fantastic grades, very much resembling the the grades that you see in the past producing mines of Ardemyeski and Nikoloskoye and so on across the belt. And so, we are, really excited to be able to drill targets, in such proximity to to these areas. Zooming into the Ruleka area first and just having a bird's eye view of of the location. The historic Ruleka deposit had a Russian resource on it or Soviet era resource on it of 14,300,000 tons at 1.2% copper and three and a half percent zinc with some gold and silver.

4:51 What I really wanna draw your attention to is is some of the grades that that make up that resource, which is fantastic intersections like 64 meters at 2.7% copper and 12 meters at 10.5

5:04 zinc and 4.95% copper with some gold and silver. Interestingly, the assay type that they did for these historical drilling was was crushing the the sample and then using XRF. And XRF is is generally pretty good for base metals, but not particularly accurate for precious metals, gold and silver. And so we think that there's a very real likelihood that that there'll be additional gold and silver just as there is in the other deposits in the region if we have some exploration success here. I just wanna draw your attention to just the size of and and scale of the Ruleka deposit in in its bird's eye view. It's about 1,500 meters long east to west and about a kilometer north to south at at its extremities.

5:54 There's two very distinct chargeability trends with that, and we're gonna fly through that at the moment. So for us, this is tremendously exciting. It is very, very close to known very high grades in the same geological unit.

6:10 So at this point, I'm going to hand over to Tremaine to take us through a video of of the IP anomaly. Thanks, Ellis.

6:22 Alright. Here's a a bird's eye view of our main deposits. You can see the historical drill holes in blue there and the geological units in the north in yellow. That hosts our our IP anomaly. And at this point, I'd just like to point out the scale and size of the deposits just to the the left of that image there along with our chargeability anomalies that look like they run from about a 100 meters from surface down to about 600 meters. And the IP anomalies typically you know, the data tends to get worse as you get deeper, so that's that's cut off at about 600 meters, but that doesn't mean that our our target area is cut off at that depth.

7:17 Looking at this a little bit closer, you'll start to see that there is some historical drilling in the area, but none of these drill holes hit this IP anomaly, which is really encouraging to us. There's also a stronger core chargeability in this area, and we've planned some some drilling to come along and test this in the in the coming weeks and months. There are several options for drilling. We've we've picked a few holes through the through the anomaly that will give us the best the best opportunity to to find a new ore deposit. Thanks very much, Troy.

8:04 Okay. We're now going to move on to the Teloskoye mine area. Again, about two kilometers to the north of the Ruleka IP anomaly, we've got the historic Teloskoye mine, which was 3,900,000 tons, again, a Soviet era resource

8:21 at close to 88% copper equivalent depending on the recoveries that you wanna use for your other met metals. We've broken this down into two distinct anomalies, east and west. The one to the east is the area that you can see has drilling from the nineteen fifties and has rock chip results, which ESTAR conducted in 2022 and 2023. From both of those, can see pretty substantial grades. The rock chips having grades in excess of 8% copper, 20% lead, over a gram gold, and and all three in massive sulfides had more than 100 gram silver. And, you know, re referring to my comments before with regards to the drill holes, you can see that there's no gold and silver really recorded in those drill holes, and and that's largely due to a lack of assays or a lack of ability to assay for for those mineralization styles using XRF, which they did previously.

9:18 So that eastern anomaly is is exciting for us. Obviously, it sits you know, it it both demonstrates that IP has worked over a known a known mineralized area, and we can compare that IP with the IP results that we get out to the west and and obviously to the south of the Ruleka deposit. So the one to the east we know is mineralized. The only drilling that really went properly through part of the IP anomaly is the one to the north with 13 meters at point 75% copper. However, that really just clipped the top of of what is a thin pipe before a bigger bulb that sits below it. It was only a 63 meter hole. And so that would be an interesting anomaly for us to with. More importantly for us, due to due to the scale is the one out to the west. And so once again, I'll hand over to Tremaine to to take us on a fly through.

10:13 Sorry. Yeah. To the west. Great. Here's another bird's eye view of the deposits. You can see the Taloskoye Mine there.

10:27 It's a historical artisanal mine. Just really some small shafts were sunk into that, and it wasn't really exploited to to any significant depth. Below that, have our western target. This is a view at about 350 meter depth slice. You can see the the scale of this of this anomaly here, approximately 400 by 400 meters. And the noticeable part the noticeable thing here is that none of the historical drilling has tested this.

11:03 We've we've also planned some drilling to to come and test this anomaly. Once again, we'll we'll plan to get through the the highest conductivity core of the anomaly. And significantly, this anomaly sits in the geological units that also hosts the telescope deposits to the East as well as the Nikolayevsky deposits to the West. So all of the geological factors, the mineralization factors, alteration lines up really nicely here, and we're excited to go and test this target from the realization.

11:48 And you were just out there. Yeah. So next steps is obviously drill preparation. Tremaine's just come back. He was on-site Monday, Tuesday this week, putting in that flag that you can see right at the front of of the screen. That is the drill hole

12:05 site or the the side of the coal location for what we expect to be the first drill hole at Woolicker. And this is looking north to the Telescoid pit, about two kilometers to the north, a bit less from this location, and and, obviously, the western anomaly for Taloskoye, which is highlighted there as well. So drill Drill preparations are are underway, and we hope to to have the drill rigs turning in the coming weeks.

12:35 Now is the time. Thank you very much, everyone. I look forward to your questions. Alex Tremaine, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by the Q and A tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A can be accessed via investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And if I could hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Thanks very much. I'll, lean straight into the first one, which says, how many drills are expected across the sites in the foreseeable future? Can you provide a time frame from the drilling to commence to when the results could be expected?

13:27 Can the current deposits be compared with any established deposits? And are we in talks with any majors to partner up with? There's a few parts to that question, obviously. At the moment, we're just starting with one drill rig on-site. As we mentioned, initially, we were gonna be drilling one hole per target, and the results of the drilling of that hole will dictate whether we drilled holes two, three, and and hopefully far beyond that if we've demonstrated good success in in both grade and continuity of of ore bodies. So initially starting with one and then and then progressing from there. A time frame from drilling for drilling to commence, as I said, hopefully within the next three weeks. When our results to be expected, typically, we get results within two months from from drilling, assuming we we log in core well and assuming that there's no issues with those results when they come back from the labs, which results in further quality analysis and quality control.

14:23 Can they be compared with any established deposits in the region? Yes. Absolutely. In fact, Troy, why don't you take that one? Sure. The Ruleka deposit is hosted in in the same unit as the Ruleka target is hosted in the same unit as the Ruleka deposit. In terms of scale, they're very similar in size, probably similar in size if a little bit smaller than the deposit, not too far away. And the Teleskoye deposit is hosted in the same units as Nikolaevsky, and that anomaly looks pretty similar in size to that Nikolaevsky Pit pretty close by. There we go. Couple of very big mines that have been producing for a few hundred years of similar size.

15:15 Any majors to partner up with? Always always the potential for that to be on the cards. I I I can't say today that we've got a signed document that we're waiting to release, but we're we're always in discussions with potential partners for all of our assets, in fact, and and all of our exploration strategies.

15:36 Do we see Rulekat or Telescois becoming similar in scale projects to Vekuba? Well, certainly, from my perspective, I think they have the potential to be much bigger than Vekuba, although, you know, it's subject to exploration results. But it's safe to say that the IP profile size would indicate deposits of of 20 or could indicate deposits of 20,000,000 tons or more. Yeah. We're we're very happy with both of those results. We're excited to test them. If ESTAR developed and sold for CUBA, what would be the strategy

16:18 what would the strategy be with the income from the sale with regards to development if we look at Telosco and Snowy? We don't have a very specific order of events for those these sorts of things, and and, you know, investors should be aware that all of these sorts of things can change quite quickly. If we drill a 20 or 30 meters of massive sulfide intersectional, very, very high grades of or, they could very quickly overtake Vercuber as the deposit which has the most potential for partnership or sale. And that's partly due to their their grade and their proximity to the Nicoloskoye processing plant. So I I won't give a specific answer to that because as it stands today, you know, until we've been able to derisk these assets through exploration, you know, we really don't know what the potential is for for partnership or sale on any of them.

17:14 Is agreeing to a partner deal or sale of a CUBA still high on your agenda? Yes. I mean, you know, we I said last year that we need to progress for CUBA to achieve what we feel is much closer to fair value. A recent research report from from Cavendish valued for Cuba at 4 p per share, just the Vacuba deposit, and and that was a heavily, heavily discounted valuation on what it should be at a time that you're going through a prefeasibility. And so, you know, our feeling is that there's a lot more value to be had from Vocuba, and we need to progress that on on our time frame and not someone else's and not be at the behest of another party. However, if the right deal or offer comes along, then we're still very, very happy to have those conversations, and we're still, you know, welcoming people to site who wanna come and look at Drillcore and and and make those assessments. And so we'll we'll need to see how that plays out.

18:10 With your, what is your current cash position, and how long is your runway at the current burn rate? Well, I can only announce our cash position as in our last publicly reported period, which was £680,000 at the end of last year. We can afford to do the drill program, which we have outlined today, and, let's hope that we've got got some discoveries and some really positive news in there, before further capital is required or before we maybe we partner or or something along those lines. It's also worth noting that we've got some three p warrants out there, and so, you know, it wouldn't take very much success to have those come into the money as well, which would be which would be helpful. How might a significant discovery at Telescoy affect the prioritization of other projects?

19:00 I I think as as is the same for everything we do, you know, ESTAR has had a, you know, for a small company, it's tried to build a portfolio of assets which allows diversification of of its risk. So we need to allocate every dollar to where it is most appropriately spent on a on a risk reward basis. You know, I'm acknowledging that that Teloscoy and Ruleka in this instance are higher risk targets than Vekuba, which we have drilled already. We have Core, and we know is is you know, we have a short resource. And so from a risk perspective, Vekuba is still one of the best places to spend incremental dollars for the company. But that said, Teloskoye and Ruleeker offer very significant upside with exploration drill holes just as the Snowy target does, which was which was mentioned in in one of the earlier questions.

19:50 And so, you know, at heart, we're still an exploration company, and if we've got the potential to turn out 20,000,000 tonnes of resource into 50 or 60,000,000 tonnes of resource, then we'd very much welcome that. So we like to allocate our capital with with a balance between, risk and reward, and some of that capital needs to be allocated to Vancouver and some to to the exploration upside in the portfolio as well. So, a significant discovery will always affect the prioritization because very immediately, we will just keep the rig there and keep it drilling and and try and put a resource in on on whether it's Telos or the Woolika on that as fast as possible. What relationships do you have with local state authorities in Kazakhstan, and how supportive are they of your operations?

20:38 We've got an extremely good relationship both, locally and federally. The you know, we we several times a year, we go out to meet with the local mayors, both of the towns and the districts that we operate in. They give us much of our permissions in terms of public easement, so surface rights to the deposits, but also being able to apply for licenses within a kilometer of a settlement. We need their approval to do so in what's called a social obligations agreement. We've, received that agreement. We've made seven or eight adjustments to it over the last few few years as we've wanted to add new areas, and they've been very, very helpful in doing that. So I know Tremaine just met with the deputy of the region on Tuesday this week.

21:25 I think he's an ex mining guy himself, and they've been mining in the region for for two hundred and fifty plus years. And so they're very, very familiar with mining operations, with the employment that it brings, and with the money that it brings. So I would say it's it's incredibly supportive. At a federal level, same. ESTAR and myself, who were cofounders of the Kazakhstan Chamber of Mines, and and we've got a a very good working relationship with the federal government. I'd say this is one of the most progressive governments globally in terms of supporting mining at the miners level and supporting exploration. And so I can't think of a better jurisdiction to be operating. That's it for questions. Oh, sorry, Lily. Alex, Germaine, thank you for answering all those questions that you can from investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the investor meet company platform.

22:15 Just before redirecting investors provide you with their feedback, which I know is particularly important to the company, Alex, could I please just ask you for a few closing comments? Sure. Thanks again for everyone's time today. We really appreciate it. You know, in in the next month, ESTAR will be turning drill rigs on on two incredibly exciting targets. They're targets that are next to underneath known deposits and in geological units, which host both those deposits and pretty significant multibillion dollar mines in close proximity. And this is a style of mineralization that we're chasing and and very, very typical to volcanogenic massive sulfide regions around the world. So we're incredibly excited to be progressing these and up for a game changing couple of months potentially for ESTAR and its shareholders.

23:04 So, hopefully, we'll have you along for the ride. Thank you very much. Alex, Tremaine, thank you for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of ESTAR RESOURCES PLC, we'd like to thank you for attending today's presentation, and good morning to you all.