"We see the consolidation of the district as an incredible opportunity to open a much larger, multi-generational mine."

John Black

CEO, REGULUS RESOURCES

December 09, 2022

Can you tell us about the potential of Regulus Resources’ flagship AntaKori project in Peru?

AntaKori is a very large copper-gold project with a sizable resource. We have slightly over 500 million tons of total mineralization, of which about 50% is in the M&I category and 50% is inferred. The average grade is about 0.7% Cu equivalent, and it is in an open pit geometry with very low strip. There is plenty of potential to increase the size of the deposit. I think many investors might overlook that we only have about half of an even larger deposit; our next-door neighbor is Compañía Minera Coimolache (CMC), a joint venture between Southern Copper, Buenaventura (the operator) and ESPRO, that operates the Tantahuatay mine. At Tantahuatay, the company is mining the oxide gold cap over the top of the same copper-gold sulfide deposit that we own part of. Therefore, this is an extremely attractive deposit on a district scale.

Can you provide details of the phase II drill campaign at AntaKori?

We put out our first resource based on our Phase I drill campaign and then launched our Phase II drill campaign, which unfortunately was suspended due to Covid-19. Phase II was designed to comprise about 25,000-30,000 m of drilling and we are due to complete this towards the end of 2022. We then think we will be ready to do an updated resources estimate towards the middle of 2023 if everything goes according to plan.

How would you describe the current financing conditions for exploration companies in the copper space, and for those operating in Peru?

Copper is currently an incredibly attractive investment opportunity as it has a key role to play in the decarbonization of our economies. Its demand will undoubtedly increase in the foreseeable future, and as an industry we are not keeping up with this demand. It takes a long time to find copper deposits and even longer to put them into production. Producers are also facing declining grades and other challenges. Therefore, the gap between copper supply and demand is expected to keep growing. The expectation of an increase in copper prices is encouraging investment.

We are also observing an increased investment discipline, meaning that people are investing in socially acceptable styles of investments. Copper is currently recognized as a green metal, which opens the opportunity for more investors.

That said, the markets have become more challenging due to global concerns about rising inflation and the possible implications for global recessions, as well as the war in Ukraine. Likewise, nations like Peru or Chile have gone through political shifts towards left leaning governments. Discussions regarding new constitutions, changing mining rules, and increased taxation are making people more cautious about investing in these countries. Nevertheless, Peru and Chile will always be mining countries; a lot of the current concerns are viewed as short term, and in the longer-term these countries will remain as good investment destinations.

How are you approaching the relationship with your surrounding communities?

We are very proud of multiple benefits that we provide for the people in the immediate area of the project, and the most obvious ones are through direct employment. Numerous local community members work for us in various capacities, for example, providing drilling services or catering services. We also help on matters that bring a permanent improvement on the communities´ lifestyles like education and agriculture.

However, sometimes the challenge in Peru comes from communities that are slightly farther away that do not receive these benefits. There is a limit to the assistance we can provide due to the size of our company and the stage of the project. Often, there are political groups that try to promote an anti-mining sentiment and take political advantage. To counter the negative publicity against mining, our strategy has been to encourage people living in the area give testimony about what we do, rather than doing so ourselves.

What is your strategy to move the AntaKori project forward in 2023 and beyond?

The normal stages of progress for projects like ours would be to continue to increase the size of the deposit and arrive at a PEA. However, this is challenging for us because we would have to combine all of the parties in the area, as we cannot present a PEA on behalf of them. Therefore, we are moving towards an eventual consolidation of the project. Tantahuatay and Cerro Corona (Gold Fields’ mine, located 7 km from AntaKori) do not have very long mine lives, and since many people depend on those mines, we see the consolidation of the district as an incredible opportunity to open a much larger, multi-generational mine. This will require significant coordination between the mining companies, the government and the communities, but with tremendous potential for long-lasting benefits for all stakeholders.

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