STORY INLINE POST
Q: How has the company’s acquisition of Alderley Gold evolved?
A: Alderley Gold was a private company that Chesapeake acquired completely, joining the other companies under the Chesapeake Gold banner. We acquired the company to get hold of its technology, which will change how we process the ore at Metates. Before this acquisition, ore processing there was challenging because of the lower grade and refractory. Alderley’s technology allows us to completely change the processing, making it a much more economically and financially viable process.
Q: What advancements has the company made at the Metates project?
A: Originally, the company drilled about five holes to get material for metallurgical test work. Subsequently, we found that the ore was a higher grade than we expected. Therefore, we followed up with another 18 drill holes, which confirmed the trend. We are now working on updating our resource estimates.
In August 2021, the company produced a preliminary economic assessment that proved Metates should contain an economically viable, financially responsible, deliverable and then expandable smaller starter project within its borders. This is important for us because we are still a small corporation. Holding a project that we can develop ourselves means that we do not have to find a larger partner for support. Chesapeake can get the project running and then expand it because the underlying potential at Metates is one of the largest undeveloped resources in Latin America. All in all, we have a unique solution to an interesting problem that could prove to be extremely attractive.
Q: How is the company applying environmental, social and governance (ESG) policies at Metates?
A: ESG is always an incredibly important part of how operations will turn out in the long term. There are three interesting points about the way we planned the operation at Metates that completely changes the environmental impact of a typical large open pit project. These usually feature big openings in the ground, large dumps of waste material and often have tailings dams that consume a great deal of water. They need a great deal of power to be able to process the ore, too.
Nonetheless, our process uses about 90 percent less power and 90 percent less water and we do not have a tailings dam. Those three factors are especially important, not just from the community’s point of view but also for the authorities when it comes to permitting because the project’s impact is significantly lower. These factors are also paramount for local communities that rightfully worry about water use.
Q: What are the company’s main concerns regarding the Metates project?
A: The key issue to solve is the technical solution to the metallurgical problem of the ore body. Once we get that right, we will move forward with the project. Moreover, the company is gathering all the other information to support what is required for the project, like extraction permits and license permits to get water and power. This might take one year to complete.
Q: How has Chesapeake been affected by the government’s policy changes?
A: Chesapeake has not seen any impact from some of Mexico’s recent policies and public statements. We have been fortunate enough because of the stage the project is in, which is still relatively early. What the company has noticed is that developments are again moving more slowly, which drives up costs.
Chesapeake Gold focuses on the exploration and development of precious metals projects. Chesapeake’s flagship project is the Metates gold-silver deposit in Durango. The company is also generating a strategic pipeline of exploration projects surrounding Metates.