Hycroft Continues To Intersect High-Grade Silver at Brimstone

0:07 Good afternoon or good evening, depending on where in the world you're signing in from. I'm thrilled to be joined today by Diana Garrett, CEO of Highcroft Mining, and Alex Davidson, the company's Vice President of Exploration, to discuss this morning's news release. Great to see you both today. Great, good to see you too. Awesome. So the way today is going to work is Diane and Alex are going to give a brief presentation, providing some additional color and context to this morning's news release and some never-before-seen footage. Then I'm going to ask a couple of questions, including some that were sent over via email this morning. Thanks, everyone, for shooting

0:38 those over. And then I'm going to throw it to you, the live audience, for any additional questions. So that little chat box in the bottom right of your screen looks like somebody's already found. That's where you'll interact with today's event. Please put your questions in there. We'll try to get to them towards the end of today. This is gonna be a shorter event than you might be used to. We're gonna be about a half hour today. So the earlier you get your questions in, the more likely we'll be able to tackle them. Last piece of housekeeping is, today's event is being recorded, and the replay will be available in a few hours to share. It'll come right to your inbox, so please do share it as soon as it's in. But that's enough out of me, I will throw it to Diane to get started.

1:14 Okay, thanks, Romeo, he's such a rockstar, isn't he, everybody?

1:18 Always great to be with you. And I want to thank everybody else for joining us today to talk about the news we put out this morning, what it means, and also show you some images on how we see this new high grade area developing.

1:32 I think Romeo's got a video that will show you of the core. The pictures in the press release are hard to see just how beautiful and how chunky the silver is and how it glistens. But I took the core outside in the sunshine to make sure we could get some good images. I think we've got one more video after this to show you from the brimstone that we put out this morning.

2:03 Let's see if you've got, do you have that other one, Romeo?

2:09 Yeah, beautiful, beautiful silver veining here, lots of visible silver. We're just super excited about everything we're seeing in this brimstone area. Of course Vortex giving us a lot of great as well, but just gorgeous visible silver. So kudos to Alex and his whole team for doing all the work that's necessary to targets and drill them. So I appreciate that. And with that, I'm gonna turn it over to Alex. He's gonna show you some images of this drilling and what it actually did to the Brimstone area in terms of expanding it. And I'll kick it over to you Alex. Thanks Diane, appreciate it. I just kind of kicking this off just to remind everybody where Icroft is located here in the northwest corner of Nevada.

2:59 Just wanted to kind of give everybody a little visual of what we're looking at here. So vortex sitting down here in the bottom and brimstone, this is where we just released a few holes earlier this morning. So Let's take a little closer look at that. There again, a little overview of the property. We're going to zoom in here. There's brimstone and vortex. And this is just kind of a look at our exploration shapes. These shapes help us with our targeting. Let's zoom in here to our drill results, there's 6003 and 9006 and so everybody's clear. What we're trying to do is test the down dip, the down dip extensions of the ore body.

3:53 And what we found was, you know, 3 and 4 have good veining in it, but not quite the same type of veining as we see in 6010 that's kind of hidden a little behind here. So what it shows us is our alteration package is kind of pushing us in this direction. And So it kind of looks something like that. So if we turn a little bit around here a little bit more, so now you can see that the trend is pushing down to the south in this general direction. But some exceptional grades in here to look at. 18 meters of almost 2,000 grams per ton. So it's definitely very encouraging things to see.

4:47 Yeah, it's pretty neat. So kind of continuing on here, this is a look at Vortex. This is our wireframes that we build. So what we're going to do here is build a block model. And this will eventually get us to being able to look at an underground resource. And here's what it looks like on the brimstone side. They're definitely different deposits.

5:13 And this is kind of a geologist view of what we could do with a potential underground as we develop this

5:25 in the area here. And then just lastly, this is a quick overview of our drill results from Vortex here. Very exciting hole over here. This is 6007 TD in high grade, our hole posted off as we talked about before right right in the in the ore zone. So what we're seeing is a lot of really good growth in the area.

5:55 And then just to look at all the highlight drilling that we've released over the last couple of days, brimstone back here to the north and then vortex here in the foreground. So yes, brimstone has just been a real delight. We're seeing some fabulous changes out here. Some things are really growing for us. It's been

6:24 a real challenge. This is basically an undrilled area. So Every new hole we put into the ground, we're learning something new every time we get back some results and it's really encouraging to see this thing develop and grow as we continue on our program.

6:47 Then one last picture here just kind of to show that not only do we have the high-grade brimstone and the high-grade vortex, we're stepping out to the east and looking at things to the east, and we're going to get to see this stuff grow. So stay tuned with us and you'll be able to see some changes out here in this area as well. So we're looking a full kilometer to the east of our current resource area

7:15 And north to south is about 2 kilometers from this end here to this end up here at the north. Great. Thanks, Alex. Yeah. Awesome. I really appreciate you running through that, Alex. If you don't mind, I've got some questions for you, just based on the press release. And then we'll get into the great questions that were emailed in. A lot of them are for Diane, some of them from the live audience right here. But Alex, I'll grill

7:46 you for a bit if you don't mind. Sure, go ahead. Awesome. Now, in reading the release this morning, you did mention identifying 3 different overlapping high-grade mineralizing events, likely derived from a magmatic source. Just curious, is this a new understanding of the mineralization? And if it is, how does that change your interpretation perspective on brimstone scale?

8:07 So it is a new look. Our whole paradigm of what we thought Highcroft was in general is changing significantly based on these results. What we see are 3 distinctly different events and we can tell that they're different because they're cross-cutting relationships. We see veins coming up and other veins are cross-cutting those

8:33 and bringing in different types of silver minerals in each one of those events. What's really encouraging about it is that is bringing more metal into this area So it's making it more perspective. It's giving us, it's helping us vector in on its actual source. So we know that brimstone is growing, we can tell just by the results that we're seeing.

8:58 And it's showing us what direction we need to look for the next sets of drill holes. Each drill hole, we learn something new, it gives us an opportunity to adjust so we're able to spend our money wisely on each drill hole and able to put it in a more appropriate place. Awesome.

9:20 Next question, and this is, anytime I don't understand a word in a press release, I will ask what it means. And I apologize for the geos in the audience. But what is petrography work? I noticed that in today's release. So that's a good question. Petrography is, what we do is we take a slice of core and we make it very, very, very thin and then they place that under a microscope and what it does is it allows us to identify all the different silver minerals and all the other different minerals that are associated in that. That also helps us understand better what the geochemistry is telling us. It links the 2 together And this also goes into helping us target. So once we understand what's going on in the petrography and how that relates to the geochemistry, we're able to build a bigger,

10:13 for lack of better words, a mineral map of the area. So we're able to look at things like selenium and the presence of, we have a little bit of copper that shows up. And every time we get a little bit better of that picture, it helps us

10:30 put that zonation of gold, silver, and the other deleterious elements together and it points us in a direction to focus our drilling. So the 2 are very much related to 1 another.

10:45 Awesome. Sorry, if anybody already knew what that word means, I appreciate you bearing with me, but I always like to learn. One more, in the press release, Alex, you note that hole 6004 showed a higher gold to silver ratio near a previously unrecognized intrusive. So my question to you is, how does this new target fit into your broader exploration model for the property?

11:06 So What what transpired there is 6004?

11:11 Crossed a Into an intrusive so so basically if you can see my hands now you've got volcanism is is bringing a little thin shoots of volcanic rock up. So 6004 crossed into into that intrusive and what we see from that is on the other side of that intrusive is the gold to silver ratio change. So Brimstone is a silver dominant deposit.

11:48 It averages something like 500 silver ounces to 1 gold ounce. And it changes significantly. It's much, much lower silver to gold. So gold is much higher there. We don't fully understand what's going on there. Again, remember I said this area is essentially undrilled at these depths. So what we need to do is we got to take a step back and

12:14 take a look at all of the information that we have available to us as higher up in the system. We'll re-look at the mapping in the area and go through and try to understand what that means. Tells me that there's a gold-rich system to the north of Brimstone that We need a lot of work in the area to really understand that. But it can change the paradigm for

12:42 what we want to do. It may open an opportunity for more open pit grade, maybe another underground opportunity there. Ultimately, we don't rightly know what's going on here. So it's all based off of 1 hole. It's a change and it's something that we have to follow up on.

13:03 Great, I appreciate that extra context. I got one last question for you, Alex, and then I'll loop Diane in for some of the audience questions. But I'm curious if you could provide just the audience in the room a bit more color on how the ongoing engineering and economic studies incorporate all these high-grade zones into the mine plan optimization. Just curious, Scott, I've seen it with other projects. How will this potential for the early high-grade opportunities just affect the strategy going into production?

13:31 Yeah, to another great question, by the way. So this year's drilling program has been focused on the idea of the high grade. And going into this, we're early enough into this process that we're not, we don't know if it's an underground. We suspect it is. All the evidence is pointing us that it's a potentially an underground. We have to do trade-off studies on this. And that's what one of the projects we have just engaged in. We're just kicking that off.

14:08 So what those trade-off studies do is it helps us understand what the economic potential of an underground versus the economic potential of an open pit. The reality of it is, they're probably going to be both

14:22 scenarios. We're well down the track looking at the open pit scenarios. We're beginning to understand the economic benefit of doing an open pit. And this, doing an underground would bring economic benefit forward. You'd be able to mine that sooner. So it is early stages on an underground opportunity, a lot to learn, a lot to look at, so it's really important that we get going on these trade-off studies.

14:56 Awesome, well appreciate you let me grill you there for a few minutes Alex. Diane I'm gonna loop you in now if you don't mind. So there were some questions that came in over email in advance of the event. So I just want to get through a couple of those before we get to the ones in the live audience. And thank you all for your questions. I will be trying, honestly, to get to as many as I can in the next 15 minutes. There's 1, and this is a question I get a lot in email before your events and it's a compilation of a number of questions so if anybody doesn't feel heard let me know in the chat and I'm happy to ask a different variation of it but there's kind of 2 and that's what's the timeline to start

15:27 actually extracting at the Highcroft mine? Question we get a lot about Highcroft and then as a side question can you unlock shareholder value before extraction takes place? Okay, I'm gonna take the last one first. And the answer is absolutely you can. In fact, that is often

15:45 one of the biggest moves that you have in the share price performance is before even beginning the operation, particularly when you're having a discovery like we've had, or you're growing massively a resource or you're making

16:00 progress steps on your engineering studies so people know the timeline to production is getting shorter. And I take you back, and I know you guys have heard it a million times, but at our company, Remarco, we went from 20 million market cap to 1.3 million, and that was 5 years before we started extracting. It was because we had a new high-grade discovery and the bigger it got, the more the market got excited about it. So yes, you can create a lot of value in this stage of the project.

16:31 Timeline to production, that's going to be driven off the engineering studies. We are working as fast as possible. Unfortunately, everything has to be done by a third party lab. Well, not unfortunately, it's a good thing for all the shareholders.

16:43 And the labs are, and the engineering firms are backlogged as well. We put our people at their offices, we are managing that process. We're trying to get the final test work done between pressure oxidation and roasting to see which one of those drives the best value for our shareholders. So, you know, we're not, every bit of work that we're doing to go into the project is with the ultimate goal of creating value for the shareholders because once you mine that ore out, it's out.

17:14 You can't go back and grab any more from it. So we want to make sure that whatever process that we employ in the milling scenario is going to extract the highest amount of gold and the highest amount of silver. Most gold projects just have a little trace amounts of silver. We have so much that we have to make sure we are focused on getting the most silver out of this system as well. So when the engineering studies are complete, then we'll have, what is it gonna cost to build it? How long will it take? And what are the economics? What's the net present value of the project.

17:50 And that will be next year for sure, but we're getting close, we're closer than we've ever been. We have a new PowerPoint deck coming out next week. I think on Monday it gets uploaded. So take a look at that and it's gonna have these stages. So you can kind of see where we are now and what are the steps to get us to production, so you can follow that news as well. And if we don't get to everybody's questions, sorry, just gonna make a note there, Romeo,

18:16 Please send it through info at highcroftmining.com. I personally answer all those emails, so happy to answer any questions if we don't get to them today, or if you just have other questions that come up after the webinar. I appreciate that, Diane, and any questions that are in the chat that we don't get to. I'll make sure that Diane gets them so that she can respond afterwards.

18:36 One more question. This is again, a compilation of a number of questions. And that's, why don't we see the share price of Highcroft tracking to the price of gold and silver? So as those go up, why isn't it a straight line for high crop as well?

18:51 On the the commodities? Yeah, there's a whole lot of different things that go into stock price performance, right? We used to see it very well pegged commodity prices were very highly leveraged. So we've been performing very well Today, almost everybody has been off somewhere between 2% and 5%. But there was some news put out by another company, I understand, last night on some quarterlies. It wasn't as great as people were expecting. And so it sort of affects the whole market, right? Somebody has some good news out, you know, all those rise with the tides, so to speak. But generally over the longer term, you will see that that correlation will certainly bear out. But there's, you know, a lot of different things that affect their prices. But over the long term and the medium term, they tend to track each other.

19:41 Appreciate that very much. There were a number of questions too, And I know we talked about this in the last webinar, but could they have another answer on it? It's people looking for the return of the Highcraft merch store and selling Highcraft branded silver rounds, etc. So if you just want to comment on all the all the merchandise opportunities, that'd be great. Yeah, well, as I'm traveling right now, I'm doing a lot of marketing, I'll tell Alex to walk down the hall and talk to our general manager and see when the new coins are going to come out. I think I mentioned once before, the refinery we were using to mint the coins is only doing work for some mining companies right now. So we're working on a new refinery to do that, but hopefully before the end of the year. Stay tuned. Awesome. Appreciate that very much.

20:26 Now, this one is just an individual question, so not a compilation. It's Somebody wrote in saying, for those investors who value having a long-term investing outlook and strategy, will Highcroft continue to operate into the future having those investors in mind? So basically, what is the far future? What are some options for the far future for Highcroft? Sure, so we are working to attract the large institutional shareholders that are in this for a long time. So in the words of our APE community, they are the diamond hands, right? They hold tight And they have always followed our management team. We've always had a lot of these. So these are the big blue chip investors. And when they put their money into a company, you know, you want to pay attention. The only deterrent for them coming in right now is the debt on our balance sheet. And that's why this is our number 1 priority to address that. It's also what keeps the overhang on our stock, in my opinion.

21:22 But, you know, mining investors, there's only so many companies. It is a very small, highly specialized industry. But we, you know, and not just because we're interested in investors who are in this for the long haul, we appreciate that all investors and many investors want to have some immediate returns. And so it's balancing, you know, I think if you're in it for the short term, medium term, or long term, it really is no difference on what we do as our company. We are production oriented. We want to get the asset in production, generate cash flow. We're also looking to grow the company. There have been some other opportunities that could launch us very quickly or already at the cashflow.

22:09 And then we can still develop high-croft. So we're always looking at those ways to provide that value for our shareholder now. And then also over the long-term. So we will be continuing to drill the high crop property for probably the life of the mine. I mean, this mine is going to be, you know, around 40 years in my life length. So it's going to have a lot of opportunity for investors to come in and out No, appreciate that. Yeah, it's certainly not a small resource. So light life will last There's 1 question in the chat from Carlos, but it was echoed by some questions in email So I thought I'd throw it to you which is people looking for an update on your work with Eric Sprott and others on fighting or discussing short selling in the market or predatory short selling. Sure. Well, I'm going to be visiting with them very soon and we're going to compare notes on that and what we could do to join forces. But yes, we monitor it very closely and we're always brainstorming different ideas, but it's really gonna take the companies coming together as I've mentioned before, and really going to the regulators and pushing them. That's where it's gonna have to start from. But I think the fact that we are active in it and we talk about it and we are and have done and continue to do the analysis and the research into what's going on behind our share of trading is a bit of a deterrent for people coming in and trying to do that again.

23:34 Well, appreciate that. A couple of questions I'll shoot straight to you from the chat. So 1, this will cover, I think, a couple of questions. Kevin asks, what kind of results will Highcroft produce for a big player to step in and cover the debt. So discuss that here. Sure, well this company, I mean, sorry, this project is absolutely a big company project. I mean, at a 40 year mine life and producing a couple hundred thousand ounces a year, you know, we're doing 57,000 tons a day, it sets itself up well for a much larger company because companies right now, every year that you mine your resources, you're depleting your resource base. So you have to keep either drilling and finding more on your own project, growing organically, or you gotta go acquire projects, you know, and bring in those ounces that way. So that's the nice thing about High Crop. We will have a meaningful impact in big companies bottom line in terms of production.

24:39 And we're right there in Nevada, so we're in a great jurisdiction. And the production profile will make a big contribution. Awesome. Alex, this one might be for you, but then feel free to jump in also. Somebody asked, how do these findings from today's release translate to estimated total silver and gold resource increase? They certainly influence it. The resource that we have currently does not include this new drilling. So we're setting it for resource on the silver side is about 360 million silver ounces. And remember, we're drilling in tight areas. So, you know, we'll be growing that resource.

25:30 And unfortunately, I don't have a great grasp on how much this is going to grow. But Vortex is really a fairly sizable deposit. Brimstone is growing. It's getting bigger and bigger as we go. So, they're certainly big enough to support an underground sort of a project, ounce-wise, but yeah, we need to keep keep plugging away there. Yeah. And I thought it was like Alex said, it's definitely going to have an impact on it. You know, the grade and so much gold and silver and in that tonnage area that you know, when we finish the drilling this year and then wrap that into the new resource, I think you'll see definitely some movement.

26:22 Yeah, cool. I know we said we only have a half hour today, so I'm going to try and get through as much as I can from the chat, but I promise everything that's written there, we'll get to Diane and her team, so they will receive it. 1, it's just a comment, actually, fairly good idea. Somebody said we should consider creating an FAQ section on the website to talk about recurring questions. That's an interesting idea, might be something we do, so thanks MSB. If you looked at my to-do list, you'll see that that's on there. So yes, we are going to do FAQs, and I'm going to take some of your questions to do that. So I've been compiling them, and we are going to put that on our website. So great. There you go. And V-Chain or TKEM, both names from the chat, asks about the future for the NFTs, the AMC, Highcroft NFTs that were handed out, if there's plans for them having utility in the future or what's to be made of those?

27:15 Yeah, I don't know. I'm sort of an NFT novice. I hate to admit that, but I do have some of the NFTs. And if you'd like 1, let us know. We can certainly send you one, but yeah, no, I think they're gonna be very valuable. I mean, it's like Adam once said, you know, he who laughs last is people said, you know, what's going on with Highcroft? I know it's been a bit slower than everybody wanted. It has been for us as well, but it is what it is. But we're marching towards that goal. And we're getting there quickly. So I do think that the AMC transaction with Highcroft is always going to be one that we talk about quite a bit for many, many years to come. And I think as we get this project moving forward with this high-grade discovery and going into production, I think it's gonna be very valuable.

28:09 Awesome. There's one question that came in over email. Just thought I'd throw it to you. It's an interesting question. Somebody's curious if the state of Nevada is supportive of the project and if you foresee any issues in future permitting? Yeah, no, you know, it's the second largest industry right after gaming or, you know, gambling, so no, we meet with the regulators all the time. We have a great relationship with them and yeah, there's 23 active mines in the state today so this is this is a big business and a big industry for the state and very supportive of High Croft. I mean High Croft is essentially a brownfields project and we already have permits for heat bleach and for milling. As with any mine, you're going to be modifying permits throughout the life of the mine. So, you know, we're well ahead of the curve on those types of required activities.

28:56 But no, good relationship with regulators. You know, We've gotten many, many awards and nominated for many more awards by the Nevada Department of Environmental Protection for our safety performance and the way we handle our property. We're not anticipating any issues there. Great. Just before we close, I'd love to put you both on the spot really quick and just ask if investors could take anything away from this morning's news release, what would it be? And I can shoot to both of you in whatever order you'd like. Sorry, go ahead, Alex. Yeah, I think for me, 2 big takeaways. Brimstone is basically an undrilled target that we're defining.

29:47 The grades that we're seeing in there are phenomenal. It's just not every day that myself in my very near 30-year career have I ever seen you know, a 20,000 ppm silver grade. I think just the overall intercept of that one hole is pretty spectacular. And I'm confident to see this thing grow. I'm really excited to see where we can take this program. Awesome. Diane, I'll throw it to you for any last words on this morning's release. Yeah, you know, one of the things we did when we came into High Croft is we just said, you know, what a missed opportunity. I mean, people kept mining the existing pits but not really looking at what was driving this. And fortunately we have this team now who knows how to do that.

30:41 And this new high-grade discoveries, it's literally been a game changer for us. And it's caused the phone to start ringing. A lot of people in the industry are paying attention to it. And it's just a lot of fun, right, Alex? It's a lot of fun right now. But it also doesn't slow down the engineering work we're doing to move us to production, right? This is a parallel track. So this is always going to feed and continue to do well for the future operation. And we're continuing the engineering to get done. So just want to leave everybody with that. Awesome. Well, Diane, Alex, thank you so much for today's conversation. I think this is great extra context for the release. And of course, everybody in the chat. Thanks so much for joining, asking a question, etc. If we didn't get to it, I'll be sure that Diane gets those questions and respond elsewhere. But thank you so much, everybody, and have a great afternoon.

31:34 Great. Thank you. Appreciate it.