Update on San Jose Project - 5,000 m. Drilling Program

0:07 Hello everyone and welcome to Monarcha Minerals live investment summit day hosted by 6. I'm joined today by Carlos Espinosa, President, CEO and Director of the company, as well as Mike Smith, their Executive Vice President of Exploration and Qualified Person. The team's gonna walk us through a company presentation and after our presenters will be accepting questions in a live Q&A. You can submit any questions you have using the panel found on the right hand side of your screen at any time. And as always, this summit is being recorded and will be available to watch afterwards on SIX.com. So without further ado, I'm going to hand

0:38 it over to Carlos to kick things off. Thank you, Cameron. And good afternoon, everybody. And thank you for taking the time to learn a little bit more about Monarca minerals. For those who are new to our story, Monarca is a junior exploration company with assets in Mexico. We have 3 assets, 2 in the state of Durango, 1 in the state of Chihuahua called San Jose. Today we're going to talk about the 3 projects but we want to really spend time updating of what is happening on the San Jose project where we are about to start a 5,000 meters drilling program. And we're going to also review quickly the other 2 projects.

1:24 So this is light, you know, lawyer's eyes goes to present it all the time, so there is it. But here is just a quick snapshot about the 3 projects. San Jose, which is a polymetallic property with almost 6,000 hectares. And I don't want to go in detail about the projects because Michael Smith, who is our QP and Executive VP of Exploration, gonna talk in more detail about the projects, just to mention San Jose here, and there are 2 projects that you see in the center of this slide, Tehamin and San Lucas. We own the 3 properties and we are very, very confident on the potential of these assets.

2:10 And very happy to have Michael with us because he has over 4 years experience working in companies from exploration companies to large producers in the US and in Latin America, working for more than 10 years in Mexico. So it's a big, big asset to have him with us. Just briefly I want to talk about the capital structure. The exchange is trading around 5.5 cents today. The last few days you know the market has been very very tough on the mining industry. However we are okay in terms of cash for our presentation for a drilling program. I'm sorry We have around 120 million shares of standing and the value of the company is around $13 million.

3:15 I don't want to spend much time on this slide, which is just a presentation of the board and management. I just want to mention that we have a very experienced team with different skills from finance, law, technical aspects that allow us to build a very strong team, despite we are a small company, we have a very, very strong team, so we are confident with our capacity to move forward the business. And I'm gonna stop here. I'm gonna pass the microphone to Michael Smith to start talking about the tree plugs that we have. Mike, over to you. Thank you, Carlos. Here we have a map that just indicates the general location of our projects.

4:02 The San Jose project is in northern Chihuahua, very close to the border with New Mexico. It's only about 30 kilometers south of the border with New Mexico. It's almost 6,000 hectares and what we see there is polymetallic star mineralization associated with some pretty impressive gold and silver grades too. It's very similar geologically to the Bismarck mine, which just shut earlier this year after about 20, almost 30 years of production. And it's a very similar deposit to what we see at the surface in San Jose. And it's kind of our exploration model in terms of what we're looking for, the kinds and styles of mineralization. And we are expecting to start this Thursday, coming this week, the 5,000 meter drilling program that is gonna be testing geophysical targets primarily.

4:54 We also have 2 projects in the state of Durango, very close to Durango City. The Tahamen project is the only project we have that has an established resource based on historic drilling of almost 29 million ounces of silver at an average grade of 45 grams per ton. It's very surficial mineralization that extends to depth. The depth potential and the high-grade feeder veins has not been drilled. All the drilling that's been done has been very shallow drilling there to date. We also have the San Lucas project, which is only about 50 kilometers east of the Tahaman project. It's a project that's very close to Argonaut Gold's San Agustin mine, which is now in production, open pit gold mining. And you can actually see the mine from the ridge line where the mineralization is exposed at the surface in the San Lucas project. So all 3 of these projects I'll be talking about in a bit more detail. This map is more of an introduction in terms of the general location.

5:54 Next slide please, Carlos. As I mentioned, the San Jose project is very close to the border with New Mexico. It's easy to get to. There's good established roads in the area. It's an agricultural community. And importantly, it's only about 50 kilometers northwest of the Bismarck mine. We have great access to the project. Being an agricultural settlement, It's a very prosperous Pueblo that's in the area, lots of agriculture, growing crops largely for export and primarily jalapeno peppers. The project was acquired in 2019. We have 100% interest in the project in exchange for total cash payments of $150,000. The previous owners retain a 2% NSR of which we can buy half of it in a single payment of $100,000 down the road once commercial production has started.

6:49 The mineralization expressed at the surface is a bunch of small mines, about a dozen small mines. All of them are very, very – most of them are just surface diggings. There are 2 shafts that go down to about 5 to 10 meters in depth. There's never been any significant production on the property. In the 1970s there was some reported production of fairly high grade values of gold and silver along with base metals, But no drilling has ever been done at the property, which is one of the attractions to us. So, we entered into an agreement to purchase the property, and based on surface exploration work, we decided to do a geophysical survey over the area where the mines are located. Next slide please, Carlos. As I mentioned, the exploration model for the San Jose project is the Bismarck Mine. In the right hand upper corner you can see a cross section through the Bismarck mine. In purple is a mineralizing intrusive and the reds and the yellows and the black areas are mineralization on the margin of the intrusive, which is basically hosted in scarves and carbonate replacement mineralization.

8:00 On the left-hand side of the slide of the image, you see 2 different colors of green and blue. Those are the host rocks for the mineralization, the limestone sequence. You can see, importantly, that the surface expression of the Bismarck mine was very minimal. Very thin veins manifested at the surface and what those thin veins are indicating was leakage of mineralization from a much larger deposit at depth. And so that's basically what we're chasing in the San Jose project. And they found the project, the Peñoles did for the Bismarck mine, they did a geophysical survey in the early 90s and came up with strong IP response associated with the sulfite mineralization at depth. And they started a drilling program and came up with an initial historic inferred resource of 12.8 million tons at 52 gram per ton silver and 11% zinc. That's about, depending on what metal prices you look at, 300 to 400 gram per ton silver equivalent.

9:04 And we see mineralization very similar to what you see in the image in cross section, except that we have some mineralization at the margin of 3 of the different intrusives that we have at the San Jose project, but we have a very large magnetic anomaly and above and surrounding that we see additional indications of sulfide mineralization based on the IP survey and the chargeability anomalies that are present. And the mineralization that we see at the surface is large areas of scarn. It's hosted in limestone, but we also have endoscarn, which is alteration in the intrusive rocks, which is indicating it's a significant system with all the scarn that we see at the surface, both exoscarn and endoscarn.

9:49 We have 3 different phases of intrusives. There's an early monzonite, which is associated with mineralization, an intermediate age granodiorite, and late diorite dikes. And the diorite dikes are above the magnetic anomaly, so we think that that's basically the surficial expression of the large magnetic anomaly we have in the southwest corner of the geophysical survey area. And the exoscar mineralization is dominantly gross diorite plus or minus diopside and so we see extensive mineralization And another important feature that we see at the surface is we see hydrous retrograde silica plus clay alteration over printing along with quartz veins the earlier form scarred. And it's in those locations where we tend to have the higher precious metal values of gold and silver.

10:40 This map indicates the generalities of the geophysical survey and the land position in the upper, in the right-hand side of the slide, is the land package that we have. It's very underexplored. We've done significant exploration work in the area where the oval is. That's where the existing mine workings are, and that's where we did the geophysical survey, primarily within that oval-shaped area. The mineralization that we saw at the surface was significant. We did a surface chip channel sampling program across the mineralized structures. We took 167 chip channel samples and we had grades up to almost 10 grams per ton gold and up to 257 gram per ton silver. At the south end of the property is where the high grade mineralization was discovered in scarm veins hosted in limestone.

11:30 And there are 2 parallel veins of hydrous retrograde mineralization, the silica plus clay mineralization that's associated with the higher grades and the scarm right there. So based on the surface sampling and mapping that we did, we decided to do a geophysical survey and that's the results of which are indicated in the lower left-hand side, the 2 images in color. And I usually start with a magnetic survey which is indicating a very large magnetic anomaly in the southwest corner of the survey grid and indicated in red and pinks. So that's indicating a buried intrusive, which we see expressed at the surface as the direct dikes, it looks like. And we also see a smaller anomaly in red to the north, which is probably another buried intrusive.

12:17 And so associated with this area where we have the magnetic signature indicating the intrusives, mineralizing intrusives, we have the IP anomalies which are on the left-hand side of the 2 colored images. And we see very strong IP anomalies in the area of the northern intrusive and along the northern margin of the southwestern, the larger

12:40 magnetic anomaly. And so we see a total strike length of almost 3 kilometers of strike length in terms of where we see the IP anomalies. And you can see that the IP anomalies extend further to the southeast. It's just cut off because that's where we terminated the survey grid. So we see significant extension to the southeast. And we just did a program about a month, about 2 months ago, where we looked at areas to the south and found very large areas of dolomitization and limestones, which is associated with the scarn mineralization, associated with also cross-cutting iron oxide veinlets, which was sulfide mineralization. We expect to be following up on that down the road to expand the area of mineralization because we have a lot of ground to the southeast, which is very underexplored, and there's a lot of potential and upside with that. Next slide, please.

13:37 This map shows the drilling program that we've set out. We've built about 15 kilometers, rebuilt about 15 kilometers of existing roads, and then to get access to the property. The property is about 15 kilometers west of Guadalupe de Victoria. From a hilltop, you can see Guadalupe de Victoria and the valley to the east. In addition, We've got the drill holes indicated in blue. We've got 15 sites which have now been determined and laid out on the ground and field checked looking at geological conditions to make some modifications to the drill holes in terms of in some cases position, but mostly in terms of whether we stay with a vertical hole to drill an IP anomaly and a chargeability anomaly, or do we angle it to go across mineralized structures that we see at the surface. So all of the drill pads have now been built and new roads have been built. You can see in some cases some new roads to some of the drill holes are in blue.

14:36 Those are new roads that are being built which follow and are guided by the environmental permit that we now have in hand to do the construction and to do the drilling. The area, the polygon that you see in kind of a brownish color, that's indicating the area where we have surface rights through a negotiated agreement with the colonia in the area. They own the surface. And so we have an agreement with them to pay them some annual fees in order to be able to do disturbance at the surface and build new roads and dropouts. All of this work is being done very much in conjunction with the local community, with the colonia. We are in very good condition and shape with the relationship with the local community.

15:22 We are very much involved with them and employ people on a local basis and can get equipment from on a local basis because it is an agricultural community. They have some equipment which we have utilized to build and rebuild some of the new roads that we have to get to the drill pads, which are indicated in this map.

15:42 Next slide, please. I mentioned that we started building roads. The grater that you see there is owned by the Colonia. We've rented that grater and we also brought in a bulldozer that was provided by the municipality in Ascension. And so we're utilizing equipment that's owned by these government entities and we are paying for the use of that equipment and the operator and paying for fuel. The upper right-hand photo is the first drill pad that we started building. That was built about 2 weeks ago. And so we've finalized the construction of all the drill pads now and are ready to start drilling. And we expect to be drilling Thursday of this coming week. Next slide, please.

16:33 And you can see it in this image, the roads that have been built, the roads that are in the darker colors, the black and the kind of a reddish color, those were existing roads. The new roads are indicated in blue to each one of the drill sites. So we put in about 2 kilometers, 3 kilometers of roads now, of new roads in the area, which is fully permitted and in agreement with the local community. And so we're ready to initiate the drilling program. And in fact, I'll be going there next week to kick off the drilling program just to make sure that all sample handling is being done correctly and the project is well maintained and covered by the Mexican geologists that we have at site. Next slide, please. This slide indicates a bit of the objective in terms of the drilling. This is drilling that we plan to do on one of the drill holes to the north in the area of planned drilling. You can see at the top is a strip map through the geology. The pink is a manzanite that's altered

17:36 and there's mineralization along the contact with the manzanite to the rocks and blues and greens to the left. Those are areas where we see surface scarn mineralization and breccias. And all of the blue areas see the limestones that have been dolomitized, which is indicating the potential for a significant and large mineralized system at depth. And then the maps that we see in cross section at the bottom, the upper one of those 2. In the pink and the red is a very strong IP anomaly associated with the chargeability anomaly. And so the drilling is, in most cases, very simple and straightforward. We're drilling the IP anomaly, which we expect to be indicating and show sulfide mineralization. In combination with the base metal and precious metal mineralization we see at the surface, we think that at the surface we have leakage from a large system at depth, which is indicated by the IP anomaly.

18:31 In most cases, the drilling that we're doing is being done to target the IP anomalies, which are indicating larger sulfide areas of extensive sulfide mineralization at depth. Next slide, please. So I mentioned already that we have the surface rights agreement with the colony. The environmental assessment report has been signed off on. We've engaged Lane Drilling to come in and start the drilling next week for the 5,000 meter drilling program. They'll be coming in with a wheel mounted RC drill rig along with a booster compressor and so everything is set up for them to arrive next week and set up to start the drilling on Thursday. And we've also the geophysical work that was done by Matrix Geotechnologies, they did a good job for us on the project.

19:25 And I mentioned earlier that we looked at areas to the south where we looked at the alteration and mineralization in the limestones, and We see an extension of about 3 kilometers to the southeast of surface alteration, which we believe is going to be indicating when we do get another geophysical survey done there additional IP targets to the south. We've expanded the exploration area by about 13 square kilometers in the area of the altered limestone that we see. Next slide, please. I'll talk a bit now about the Tehamin Project. It's located in Burango. It's about 1,700 hectares. It's an area where drilling was done in the early 2000s. It's easy to get to. It's about 10 kilometers southwest of the town of Huevo y Diao, which has paved highway connection all the way to the capital city of Burongo.

20:17 There's a lot of development and agriculture in the area. There's power resources, water resources in the area, as well as skilled labor. We see that the mineralization that was drilled historically was all done with the idea of having open pit mining related to the surface mineralization. So all of that drilling was done to only about 200 meters of depth. And one of the things that we discovered about a year and a half ago, re-logging all of the cuttings that we have from the historical drilling as well as the core, is that we have very high-grade feeder veins that are striking northeasterly, cutting underneath both the Montos deposit and the Cerro Prieto deposit. We have intercepts in the historic drilling that's been done of up to 6 meters, grading 1,400 gram per tonne silver, along with 5% combined lead zinc. So there's a lot of upside in terms of the mineralization that we see.

21:15 And right now, what we're more focused on is to follow up on the high-grade feeder

21:19 veins at the same time as doing drilling through the existing resource targeting the high-grade feeder veins. So the current resource is about 20 million tons at a grade of 45 grams per ton, giving us a total of almost 29 million ounces of resources in the inferred category. So again, we want to do drilling there down the road, confirming the existing resource, but primarily targeting the high-grade feeder veins. Next slide, please. And this slide just gives you a bit more of a summary on the project. The upper right-hand corner image shows where drilling has historically been done. The Los Montos deposit and the Cerro Prieto deposit are both open. The Los Montos deposit is primarily open and extends to the southeast and east.

22:11 But again, we want to follow up on the high-grade feeder veins. And then we also have the Cerro Prieto project, which is a very thick vein, which has surface expression. We want to be drilling that beyond 200 meters

22:22 at depth to get a clearer picture on the potential underground resource that we have there. The historic drilling that was done was, as I mentioned, primarily done in order to look at an open pittable resource. The 45 gram per ton average grade may not seem like much, but a good analog to what we have at the Tahaman Project is that the Rochester mine that Coor has in central Nevada. They've been open pit mining low-grade silver and doing heap leaching with cyanide. The average grade that they put to their leach pads is 20 to 22 grams per ton gold and our resource has an average grade of about double that. And so early testing was done to look at the recoverability in a heap leaching scenario. And we see recoveries in the range of 50 to 60%, which is consistent with what the Rochester mine has.

23:15 The table in the lower left-hand corner shows some of the high-grade feeder vein intercepts that we have. For example, if you take a look at probably the 8th or 10th one down, MMT 141, that had an intercept of 80 meters of 417 gram per ton silver. So we think that beyond the disseminated mineralization we have in the margins and away from the veins forming these manto-style deposits, which are hosted in volcanic rocks, that that's the kind of high-grade underground, potential underground mineralization that could be discovered by

23:54 additional drilling. All of the mineralization in Tahoma is hosted in volcanic rocks. And what we're interested in seeing is where those high-grade feeder veins come from depth and into the base of the volcanic section. We have optimism that we'll have Monto style deposits at the base of the volcanic section there, so we're anxious to get into Tahaman as soon as possible And we think that it's got great potential for significant upside in terms of the total resource and in terms especially of the high-grade feeder veins of which we've discovered there are probably there's 1 in the Cerro Prieto and it looks like there are 3 or 4 of them in the Los Montos deposit, all striking northeasterly. Next slide, please.

24:43 The San Lucas project is 100% owned project. It's very close to the Tahaman project and very close particularly to Argonaut Gold's San Agustin mine, which is an open pit gold mine. You can see the gold mine from the ridge line where surface mineralization has been discovered with very high grades at the San Lucas Project. The mineralization is hosted in the concessions that we have there in volcanic rocks. Underneath that we think that we probably have carbonate rocks, which have never been drilled Again, similar to Tahaman is drilling the high grade veins we see at the surface, these mineralized shear zones, and where they come into the base of the volcanics and with limestones in the area, we expect to have significant potential for star mineralization associated with the silver and base metal mineralization that we see at the surface.

25:36 We did recently some sampling, well it wasn't that recently, it was about 8 years ago on the El Doctor zone, which is outcropping on the concessions that we have there. There are a portion, we've got about 270 meters of strike length on 2 parallel vein sets that we see there, which are part of the main mineralized shear zone, which strikes north-northeasterly. The exploration that we did there is we took 89 ship channel samples at the surface across the old docker zone. And we saw grades up to 110 grams per tonne gold with 168 gram per tonne silver with base metals. The average grade of the samples we took, excluding that very high grade value, was 3.22 grams per tonne gold at the surface. So there's significant mineralization that needs to be drilled particularly at depth and we would be in a position to get in there and do additional drilling there when we expand the land package.

26:34 We have been in talks with the owner of the surrounding concessions. So far, they seem amenable to doing a deal that we can acquire those concessions and expand our land package to about 700 hectares. And so that's a work in progress. Next slide, please. Okay, this is where I hand it back to Carlos Espinosa, and we'll take questions after we get done with the presentation. Thank you. Thank you very much, Mike. I want to present this slide as a comparable analysis with some other exploration companies in silver and in the Americas. And it is important to see, to review these numbers because, as you can see, Monarca is presenting as an undervaluated company among the peers, which is a great opportunity for investors to enter on an early stage to the company and grow with the company, especially in a moment like now, we are about to start trading.

27:38 We see a lot of upside on Monalca and our properties. Currently, we see we are trading like less than 50 cents per equivalent ounce of silver, which is around 60% below the average. So that's another way to present the potential that the company has growing into their Mexican properties. I also want to spend a couple of minutes talking about social management. Already Michael mentioned that We have an excellent relationship with the community in San Jose. We're working with local authorities. We are hiring local people. And what we've been doing is really to build a relationship with the community and became part of the community. We are not outsiders.

28:35 We're in the houses in the village. We hire local people as much as we can and we really try to integrate with the community and it's working well. So we have a very good engagement with the community in San Jose. With the Hammond, we are implementing a different program because it's a different relationship that we have with the community there. And San Lucas currently, because this is still a small project and we are in the process to acquire more assets, we have an early stage community engagement, but we are working with all of them on different phases. So the idea is to have, or to create an umbrella that provides enough relationship with the community's industry properties.

29:27 So just closing with companies or people asking why I'm on Arka Minerals compared to many other companies that are around in the market. And there are some reasons that should be considered as 1 alternative. One is, of course, the drilling program we are about to start. This drilling program is going to really prove the thesis that we have been building over the time. Initially when our geologists, Mike and Carlos Pacheco, chipped some samples on the surface, then we did the geophysics that really, really bring strong results. And now the next phase is to start this drilling program that I'm very, very confident we're going to have also great results.

30:16 So this is one of the reasons investors should consider Monarca as a good option. The other option of course is we have a portfolio of good assets. Tehamin and San Lucas on top of San Jose are also good opportunities for us to continue developing. And it's going to be adding value to the company and to shareholders. And the third one I already mentioned, it's still an undervalued company. So this is the time to jump in and join the ride with us. So with this, I'm closing the presentation and opening the floor for a Q&A. Any questions, we're happy to answer. Wonderful, well, thank you, Mike. Thank you, Carlos. I think that was a great presentation. As you say, let's move on to the live Q&A. I'd like to remind everyone in the audience that you can ask questions using the Q&A panel found on the right hand side of your screen at any time.

31:10 And to begin, an audience member has this to say they have a number of questions, so we'll just go through them one at a time I think is best. But many thanks to the update and the geological insights and congrats on getting all permits and finally start drilling. His first question reads, given the log jam at the assay labs, when can shareholders expect first drill results to be released? Right now, based on the best information we have, we plan on using one of the certified, ISO certified labs in Chihuahua. They have prep facilities there and generally what they do is they send the pulps off to their mother lab and typically that goes to Vancouver. Right now, the wait times that we have been told from the lab for the assay turnaround is about a month.

31:55 In other projects I'm familiar with, the wait is more like 2 months. So if we get started drilling next week, we'll have samples sent out by approximately the end of this month. And so we're looking at having assay results depending on actual turnaround. It could be as early as the end of September, but it could easily turn into October depending on assay lab turnaround, the real turnaround, oftentimes labs will give you a quicker turnaround than the reality is at the end. So we're looking at the end of September, probably best case scenario, and it could go well into October for actually getting the asset results. OK, great. Thanks, Mike. The audience member's next question is, given the stock's performance near to date and it's underperforming, can you give any information on what the reasons for this persistent selling might be over so many months?

32:46 Well, it's a difficult question to answer because, I mean, investors have different strategy. But if you see, we're going back 1 year ago, we raised a capital $3 million. And at that time, the share price was $0.05. We raised $3 million and the share performed really, really well up to around $0.15, sometimes $0.20. One of the problems we faced was the delay on the drilling program, and it's highly related to the COVID. Mexican government offices closed, so we couldn't get the environmental permit earlier.

33:32 So all this delay creates, I think, some impatience on some of the investors. And I'm sure some of them sold their shares earlier, takes on some of the gains. And the last few weeks, especially the last 2 weeks, has been very, very tough for all mining, not only for junior or not only for Emanarca. So you could see as a challenge or really as an opportunity, because the price is very, very low today. So that's the moment really to invest and going back on the next swing of the share. I'm confident we want to improve the share price in the next few weeks.

34:18 Thank you, Carlos. His next question is, what are the catalysts that you would want to highlight to convince the market that Monarca is a promising investment? Probably I should start, and Mike, if you want to jump in, but I think one of the key catalysts is going to be the result for the drilling program. It's a property with a lot of merit to become something very interesting. So this drilling program is just the beginning. So we really are expecting, and we believe this could be a large deposit. So 1 step at a time, but for now, the main focus is to bring the results to the markets on the drilling product.

35:04 I don't know, Mike, if you want to add up some comments, but I think... Yeah, we have leads on a couple of properties in Mexico that look attractive to us. You know, one of the things that we focused on is that, you know, looking for projects that are underappreciated. And that's exactly what San Jose was. I looked at it first time about 4 years ago and was very impressed with the mineralization I saw at the surface and saw it potentially indicating a very large mineralized system. And so other companies may have looked at it. I know that Peñoles was looking at it. They wanted to acquire it too, but the owners preferred to do a deal with us. So the modus operandi that we have is not so much look at properties that another company has already established resources at, but to look for properties that are just underappreciated. You know, with the experience we have in the company with myself and geologists boots on the ground, we think we have an advantage of looking at properties that are maybe just held by some local concession owners, local people in the community likes on them, say. So one of the things that we plan to do is start looking at other properties later on this fall when we get done with this drilling program.

36:18 We'll get the drilling program done. It's probably going to take 6 to 8 weeks at least to finish the drilling and we'll be waiting for assay results. So one of the things I want to do is to start looking at other properties later in the fall, the October, November timeframe. Great. Okay. Thank you, Mike. Thank you, Carlos. And his final question is, what are the long-term plans for the 3 projects? Okay. Well, starting with San Jose, we want to develop that property. The idea for us is going all the way to production. That would be the ideal scenario. So that's the plan A for us. And it's a long way from where we are today, on to there, but that's really what we want to do.

37:04 For Tehamin, we want to advance in exploration, because the exploration that we have in Tehamin is very shallow, so we want to go deeper and understand better what's under the surface. If I'm right, we just drilled up to 250 meters, so it's a lot to learn about the hamming as well. And in the case of San Lucas, Mike mentioned we want to buy a large or larger land package that's going to give us the opportunity to manage around 700 to 100 hectares, which is a very decent size for a property, a very good property. So as soon as we can acquire these properties, we can start also doing some exploration and then make decisions on what's going to be the future for that asset.

38:01 Yeah, and I'll add to that a bit. Regarding San Jose, we think it's a very underexplored property. Obviously, we have the drilling program coming up, but I mentioned in the presentation of the geological setting that we have there is that the IP anomalies extend to the southeast. How far, we don't know. But we do see mineralization and alteration in the limestones for up to 3 kilometers to the southeast from the edge of the current known geophysical anomaly, the IP work. And one of the things that I'd also like to start doing this fall is initiate, just to give us a bullseye, a bit of a bullseye on the property. It's such a large area that one of the things I want to do is to go to all the drainages, draining the areas where we see mineralization and alteration at the surface, and do a stream sediment pan concentrate sampling program to give us some definition about what areas, what drainages seem to have the best potential for follow-up detailed mapping and sampling to see what we get at the surface. We see to the south monsonite dikes, which are mineralized, intruding into the limestones. The limestones are dolomitized, along with calcite veining and abundant stockworks of iron oxides on fractures, which were pyrite masses in the limestone. We think we have significant potential to the Southeast, which is very under explored.

39:23 And so one of the things we want to do is to get in there and do initial stream sediment and concentrate sampling and detailed mapping and sampling at the surface to see what the full extent of mineralization is to the south. Great, thank you, Mike. Thank you, Carlos. Wonderful, and we also have some questions that have come in in advance that I'd like to get to. The first is, what kind of mineralization are you expecting to encounter in the drilling? Well, the mineralization that we see at the surface is basically thin veins expressed at the surface in an area where there are large areas of a scarred mineralization, both endoscarred and exoscarred at the surface. And so we think that that's all leakage from something much larger at depth. So as we're doing this drilling that's starting next week, what I'm anticipating that we will see, drilling the IP and the chargeability anomalies, is that we'll see sulfide mineralization at depth.

40:18 We do expect that sulfide mineralization to have a strong element of base metals along with gold and silver, because what we see at the surface shows significant base metal grades, commonly with lead and often with zinc and copper mineralization at the surface. Those thin structures which are mineralized in and of themselves are not economic deposits because they're very thin at the surface. What we're targeting is the large areas of sulfide mineralization which are indicated by the geophysical work, the IP survey principally, at depth. And that's what we're going to be starting to drill. So we expect to see some significant base metal grades along with precious metal grades. The area where we got the almost 10 gram per ton gold mineralization with about 250 gram per tonne silver mineralization in the south end of the area where the mines are expressed at the surface.

41:10 There's 2 parallel veins there that look like they're a metre to 2 metres thick with grades of several ppm gold and some much higher than that. And the first hole we're going to drill is going to be angled, cutting across those 2 structures, hitting the first one at a depth of about 100 meters and the second one at a depth of about 130 meters. So we'll get that drilling done and see what kind of precious metal grades we get associated with that. And one of the reasons we're seeing significant precious metal grades is much of the mineralization is not on the margins of a causative intrusive, it's above a causative intrusive, which is that depth. And so typically in many mineralized systems, when you get above a mineralizing intrusive, you tend to get high-octane metal grades.

41:55 And so, let alone the base metal potential, we certainly see the potential for significant gold and silver mineralization. So we're pretty optimistic about this drilling that we've got coming up and we expect to see some significant grades and when we get the assays in we'll have it measured. Great, thanks for that Mike. What areas offer the best opportunity for more exploration at San Jose? I already touched on that. That's the area to the southeast, but we did recently discover that about a kilometer and a half to the southwest of the area where we plan on doing drilling, that there's another monzonite intrusive up in the foothills along with altered fragments of rock and scarn in the drainages that drain that area. Let alone to the south, we also see something to the southwest that looks pretty interesting.

42:46 There's just a lot of follow-up mapping outside of the area where the geophysical grid was done that has significant potential for mineralization. And we could easily see a follow-up expansion of the geophysical grid to the south and other areas, maybe to the southwest and the southeast. Okay, great. With some sampling having resulted in high gold and silver values, do you think that there's opportunity to focus on those? Yeah, I already touched on that a bit. That's primarily at the very south extent that the Guadalupana vein, which is scar mineralization, there's scar veins hosted in limestone. So I've already talked about that a bit, but the kind of metal grades that we see there were really surprising to me. I mean, I expected to get a part of a ppm gold or gold with some tens of ppm silver but we got grades significantly higher than that and so I'm pretty optimistic about the potential for significant precious metal mineralization associated with the alteration in the area of mineralization that we see at the surface.

43:51 Okay, thank you. And are you planning to raise more money soon? We are planning to. We are okay for the drilling program. We have enough money to complete all the drilling program and the labs and so on. But definitely we are planning to raise more money probably by the end of this year to continue developing San Jose and probably to do some acquisitions. Okay. Oh go ahead Mike. Yeah, in the drilling that we're doing, we got a very good drilling rate. Based on the footage rates that we're looking at at 5,000 meters, we're looking at about $250,000 in direct drilling cost. It typically comes out a bit more than that because they are doing a downhole survey on the drill holes. But we're looking at nominally $250,000 and then the assaying is going to be probably in the $100,000 to $150,000 range.

44:44 We plan on doing assaying for both the fire assay for the gold content and then doing a multi-element determination for the silver and base metals doing within an ICP finish. And so If you look at the direct drilling costs and the expected assay costs and the labor in the field, we're looking at about $500,000, maybe $600,000 to complete this first 5,000 meters of drilling. Okay, thank you for that. How much has COVID-19 impacted your plans this year? Yeah, well, as I mentioned before, it had been an issue, fortunately for the company, for the communities where we are, COVID didn't affect that much to the health of the people, But in terms of the business, it had been a problem because Mexico had several lockdowns and they shut down the government offices.

45:40 And when they finally reopened it, they opened it just for a few days a week and it was really, really complicated to go through the process of the permitting. Usually, based on our experience, the permitting could take a couple of months. But now it was really months and months and months, probably 6 months or more because of the COVID. So now that it's people, more people vaccinated in Mexico and more organized and educated regarding the COVID, we are expecting to have something more manageable and at least where we are now, which is very isolated, we can work properly. Lane, which is the drilling company that is coming with us, as well as our team, are following the protocol to avoid any COVID issues. So we're expecting from now to be more close to normal, but the last few months have been challenging because of COVID.

46:40 Okay, thank you. Well, I think that's all the questions we have for today at this point. So I'd like to thank not only yourself, Carlos, but also you, Mike, for coming in today, as well as all of the attendees that have come in live today to be a part of this event. If you didn't get a chance to ask a question or if you think of one afterwards, don't worry, we'll be sending out a short survey for you to fill out where you can get in contact with the Monarcha Minerals team. You can also, of course, find more information at monarchaminerals.com. With that, Carlos, Mike, I'm going to hand it back to you for some closing remarks. Thank you, Commander. I want to thank you for organizing the summit and a special thanks to the audience to attend today and learn more. Thank you for the questions. And of course, we are open to have further discussions if someone wants to follow up with us.

47:25 And let's have a great weekend. Thank you very much, everybody. Thank you. Thank you very much for everybody for listening. And I just wanted to reinforce the exploration potential at the San Jose project in particular. I've worked on a lot of projects in scattered locations around the Americas and the magnitude and the intensity of the IP anomalies we see coupled with the mineralization we see at the surface gives me a much higher degree of optimism about success and exploration potential than I've had on, it's comparable with some of the best projects I've worked on in South America or North America. So we're very excited about the potential and I'm expecting to have success in our drilling program. We'll get clear indications of mineralization.

48:14 We'll have to wait to see what the assays are telling us and that obviously gives us additional targets for follow-up drilling for the second phase of drilling in San Jose. Okay well thank you again gentlemen for coming on today and like you said Carlos I hope you guys both have great weekends. Cheers. Thank you very much. Thank you. Bye-bye.