TORQ RESOURCES INC. Torq Resources Inc.
An exploration stage company
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE COMPANY'S CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the three and nine months ended September 30, 2023
(Expressed in Canadian Dollars)
Dated: November 29, 2023
TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
1. HIGHLIGHTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND THE PERIOD UP TO NOVEMBER 29, 2023
- Operational highlights
- On October 18, 2023, Torq Resources Inc. ("Torq" or the "Company") announced the first set of results from its phase III drill program at its Margarita iron-oxide-copper-gold project, which began mid-August, 2023. The objective of this drill program was to test the potential to expand the original Falla 13 discovery area, both along strike and laterally, as well as to test a number of undrilled targets that were identified by anomalous gold-in-soils, permissive geology and geophysical signatures of conductivity and chargeability. The reverse-circulation ("RC") drill program consisted of approximately 4,000 metres ("m") and identified a new parallel mineralized structure 200 m west of the original Falla 13 discovery, intersecting 42 m of 1.1 g/t gold and 0.48% copper of sulphide mineralization in drill hole 23MAR- 031R. A new zone of copper oxide mineralization was also discovered in the southern area of the project at the Cototuda target, where 132 m of 0.48% copper was intersected in drill hole 23MAR-035R. Finally, broad zones of copper oxide mineralization were encountered at the historically drilled Margarita structural corridor, at the southwest limit of the property, where Torq drilled 62 m of 0.49% copper and 134 m of 0.29% copper in drill hole 23MAR-036R. The results from the remaining seven drill holes are pending.
- On August 2, 2023, the Company announced drill results from the first two drill holes at the Cerro del Medio target in the Company's inaugural drill program at the Santa Cecilia gold - copper porphyry project ("Santa Cecilia"). Drill holes 23SC-DDH-001 and 23SC-DDH-002 are located 700 m apart and were designed to cross a northeast trending structural corridor with the objective of intersecting new porphyry phases and higher-grade mineralization than the 2012 historical intercept in drill hole CDM-12-003, which consisted of 925.7 m of 0.21g/t gold, 0.27% copper and 82 parts per million ("ppm") molybdenum. The results from the Company's drill holes, 23SC-DDH-001 and 23SC-DDH- 002, were 476.3 m of 0.23 g/t gold, 0.22% copper and 93 ppm molybdenum at a hole depth of 584 m - 1,060.3 m and 557 m of 0.38 g/t gold, 0.23% copper and 56 ppm molybdenum at a hole depth of 442 m - 999 m respectively. Both drill holes bottomed in mineralization and significantly expanded porphyry mineralization to the south and east from the historical drilling. The gold grades encountered in drill hole 23SC-DDH-002 represent an 81% increase from the 2012 historical intercept from CDM-12-003 and provide a vector to the south and the east toward a potentially higher- grade causative intrusion.
- On July 19, 2023, the Company announced the results of its rock sampling program, based on a total of 196 samples, that were collected from the Pircas Norte and Gemelos Norte target areas from the eastern region of the Santa Cecilia project. The highlights from selective rock sampling targeting porphyry-style veining included gold grades of 0.3 g/t to 0.83 g/t in banded quartz-magnetite-pyrite veinlets with copper grades ranging from 438 ppm to 0.44% at Pircas Norte. At the Gemelos Norte target, highlights from the selective rock sampling targeting porphyry style veining included gold grades of 0.13 g/t to 1.49 g/t. In addition, at Gemelos Norte, two epithermal veins sampled on the southwestern edge of the target area had gold grades of 12.05 g/t and 3.36 g/t and copper grades of 2.3% and 285 ppm, respectively. Collectively, the rock sampling results from both Pircas Norte and Gemelos Norte demonstrated mineralized gold - copper and gold porphyry systems that are exposed on surface.
- On May 3, 2023, the Company announced the results of its soil survey from Santa Cecilia. The results of the soil survey are based on 1,503 samples of a total of 1,735 soil samples that were collected on a 70 m by 70 m grid across the Santa Cecilia hydrothermal system. The results indicated a total of seven porphyry targets.
- Corporate highlights
- On November 8, 2023, the Company announced that it had commenced a public offering (the "Offering") for the sale of a minimum of 16,000,000 units of the Company (the "Units") to a maximum of 24,000,000 Units at a price of C$0.25 per Unit for minimum gross proceeds of C$ 4,000,000 to a maximum of C$6,000,000. Each Unit is comprised of one common share of the Company and one-half of one common share purchase warrant (each whole warrant a "Warrant"). Each Warrant will be exercisable to purchase one common share of the Company at a price of C$0.35 for a period of
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TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
three years from the closing date. The net proceeds from the Offering will be used for exploration of the Company's Santa Cecilia project and for general corporate and working capital purposes.
- On March 10, 2023, the Company announced that it had completed a private placement for gross proceeds of $6,260,339, consisting of 10,433,899 units of the Company (the "Units") at a price of $0.60 per Unit. Each Unit consisted of one Torq common share and one half of a share purchase warrant, two half-warrants being required to exercise and acquire a common share at $0.80 until March 10, 2026.
- On February 10, 2023, the Company announced that it had obtained a receipt for its final short form base shelf prospectus (the "Shelf Prospectus") filed with the securities commissions in each of the provinces and territories of Canada. The filing of this Shelf Prospectus provides the Company with financing flexibility; under the Shelf Prospectus, the Company may issue and sell up to $60,000,000 of common shares, warrants, subscription receipts, units, debt securities, or any combination thereof, from time to time over the 25-month period that the Shelf Prospectus remains effective.
2. DATE OF INFORMATION AND CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Management Discussion and Analysis ("MD&A") of Torq has been prepared by management to assist the reader in assessing material changes in the financial condition and results of operations of the Company as at September 30, 2023. Commentary is made on the results of the period under review. This MD&A should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Company ("financial statements") and related notes thereto as at and for the three and nine months ended September 30, 2023 and 2022. All financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by International Accounting Standard Board ("IASB") and all dollar amounts presented are Canadian dollars unless otherwise stated.
United States readers should be aware that the Company uses mineral terminology based on the Canadian Institute of Mining and Metallurgy ("CIM"). CIM standards are not the same as those accepted by the US Securities Exchange Commission for US domestic mining company disclosure. Further details of these differences can be found in the Company's Annual Information Form filings.
The effective date of this MD&A is November 29, 2023.
2.1. Forward-looking statements and risk factors
Certain statements made in this MD&A contain forward-looking information within the meaning of applicable Canadian and United States securities laws ("forward-looking statements"). These forward-looking statements are presented for the purpose of assisting the Company's shareholders and prospective investors in understanding management's intentions and views regarding future outcomes and are inherently uncertain and should not be heavily relied upon. When used in this MD&A, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "seek", "propose", "estimate", "expect", and similar expressions, as they relate to the Company, identify such forward-looking statements. Specific forward-looking statements in this MD&A may include, but are not limited to: the Company's ability to execute on its exploration and financing plans, the likelihood of discovering resources; the potential for access to and exploration of the Company's Margarita, Andrea or Santa Cecilia projects; permitting timelines; government regulation of mining operations; environmental and climate-related risks; the possible impairment of mining interests; any objectives, expectations, intentions, plans, results, levels of activity, goals or achievements; the timing and amount of estimated exploration expenditures and capital raises for the Company; the liquidity of the common shares in the capital of the Company and other events or conditions that may occur in the future; the Company's intention to grow its business and its operations; the Company's competitive position; changes to government regulation, in particular Chilean; and the impact of the COVID-19 pandemic on the Company's operations and the economy generally.
The forward-looking statements contained in this MD&A represent the Company's views as of the date hereof. The assumptions related to these plans, estimates, projections, beliefs and opinions may change without notice and in unanticipated ways. Many assumptions may prove to be incorrect, including the Company's budgeting plans, expected costs, assumptions regarding market
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TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
conditions and other factors upon which the Company has based its expenditure and funding expectations; the Company's ability to obtain or renew the licenses and permits necessary for exploration; that operations and financial markets will not in the long term be adversely impacted by the COVID-19 pandemic; the Company's ability to complete and successfully integrate acquisitions; the possible effects of climate change, extreme weather events, water scarcity, and seismic events, and the effectiveness of strategies to deal with these issues; the Company's expectations regarding the future demand for, and supply and price of, precious and base metals; the Company's ability to recruit and retain qualified personnel; the Company's ability to comply with current and future environmental, safety and other regulatory requirements and to obtain and maintain required regulatory approvals.
Inherent in the forward-looking statements are known and unknown risks, uncertainties and other factors beyond the Company's ability to control or predict, that may cause the actual results, performance or achievements of the Company, or developments in the Company's business or in its industry, to adversely differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Some of the risks and other factors (some of which are beyond the Company's control) which could cause results to differ materially from those expressed in the forward-looking statements and information contained in this MD&A include, but are not limited to, fluctuations in the current and projected prices for gold, other precious and base metals and other commodities (such as natural gas, fuel oil and electricity) which are needed for exploration activities; risks and hazards associated with the business of mineral exploration (including environmental hazards, potential unintended releases of contaminants, industrial accidents, unusual or unexpected geological or structural formations, pressures, cave-ins and flooding); the speculative nature of mineral exploration and development; the estimation of mineral resources, the Company's ability to obtain funding, including the Company's ability to complete future equity financings; the current lack of any estimated mineralized deposit; environmental risks and remediation measures, including evolving environmental regulations and legislation; changes in laws and regulations impacting exploration activities; the Company's mineral properties being subject to prior unregistered agreements, transfers or claims and other defects in title; legal and litigation risks; statutory and regulatory compliance; insurance and uninsurable risks; the Company's limited business history and history of losses and negative cash flow, which will continue into the foreseeable future; our inability to pay dividends, volatility in the Company's share price, the continuation of our management team and our ability to secure the specialized skill and knowledge necessary to operate in the mining industry; availability of drilling equipment and other exploration equipment; timely receipt of appropriate exploration permits; relations with and claims by local communities and non-governmental organizations, including relations with and claims by indigenous populations; the requirements of being a public company, including maintaining the listing requirements TSX Venture Exchange ("TSX-V"); risks associated with the significant resources required to maintain regulatory compliance as a public company; the effectiveness of the Company's internal control over financial reporting; cybersecurity risks; risks relating to the Company's public perception; general business, economic, competitive, political and social uncertainties; and public health crises such as the COVID-19 pandemic. This is not an exhaustive list of the risks and other factors that may adversely affect any of the Company's forward-looking statements. Readers should refer to the risks discussed herein and in the Company's Annual Information Form for the year ended December 31, 2022, filed on March 27, 2023, and subsequent disclosure filings with the Canadian Securities Administrators, available on SEDAR+ at www.sedarplus.ca and on the Company's website at www.torqresources.com. These documents are for information purposes only and not incorporated by reference in this MD&A.
3. DESCRIPTION OF THE BUSINESS
Torq is a junior mineral exploration company focused on the acquisition and exploration of mineral resource properties. The Company is incorporated under the Business Corporations Act (British Columbia) and is a reporting issuer in British Columbia, Alberta and Ontario. The Company is listed on the TSX-V, where its shares trade under the symbol TORQ.V and on the OTCQX where its shares trade under the US symbol TRBMF.
The information presented consists of the financial statements of the Company, and the following 100% beneficially owned subsidiaries:
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TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
Place of | Functional | Beneficial | |
Subsidiary | Incorporation | Currency | Interest |
Torq Resources Chile SpA | Chile | US$ | 100% |
Minera Margarita SpA | Chile | US$ | 100% |
Minera Andrea SpA | Chile | US$ | 100% |
Minera Santa SpA | Chile | US$ | 100% |
Torq Operaciones Chile SpA | Chile | US$ | 100% |
Candelaria Minerals S.A.C., a dormant subsidiary of the Company, was dissolved in January 2023.
3.1. Ongoing response to COVID-19
While the Company continues to monitor developments with regards to COVID-19 and permitted activities, there were no impacts to the Company's operating activities in the first nine months of 2023 arising from COVID-19.
3.2. Qualified persons and technical disclosures
Michael Henrichsen P.Geo, Torq's Chief Geological Officer, is the qualified person as defined by National Instrument 43-101 with respect to the technical disclosures in this MD&A.
4. MINERAL PROPERTY INTERESTS
The Company's mineral property interests are composed of the following:
Margarita | Andrea | Santa Cecilia | ||||||
Project | Project | Project | Total | |||||
As at December 31, 2021 | $ | 453,886 | $ | 165,826 | $ | 268,486 | $ | 888,198 |
Additions | 3,435 | - | - | 3,435 | ||||
Option payments | 477,841 | 170,937 | 409,470 | 1,058,248 | ||||
Foreign currency translation | 35,977 | 21,000 | 5,510 | 62,487 | ||||
As at December 31, 2022 | $ | 971,139 | $ | 357,763 | $ | 683,466 | $ | 2,012,368 |
Option payments | 406,560 | 81,204 | - | 487,764 | ||||
Foreign currency translation | (2,207) | (660) | (960) | (3,827) | ||||
As at September 30, 2023 | $ | 1,375,492 | $ | 438,307 | $ | 682,506 | $ | 2,496,305 |
4.1. Margarita project
Pursuant to the execution of the Margarita Project option agreement, the Company incurred finders' fees to be paid in shares of the Company and issued in separate tranches; on March 31, 2023, the final tranche of shares was issued in final settlement of the agreement with the finders.
Margarita Claims
Under the option agreement, the Company may acquire a 100% interest in the Margarita claims by making cash payments totaling US$6,200,000 over 66 months. To maintain the option, the Company is also required to incur work expenditures totaling US$3,050,000 within 30 months of the signing date of the definitive agreement (February 22, 2021), which have been fully incurred as at September 30, 2023.
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TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
Cash | Work expenditures | |||
payments | requirement | |||
(US$) | (US$) | |||
April 20, 2021 (paid $62,445) | $ | 50,000 | $ | - |
August 22, 2021 (paid $64,280 and work requirements met) | 50,000 | 400,000 | ||
August 22, 2022 (paid $155,013 and work requirements met) | 100,000 | 1,150,000 | ||
August 18, 2023 (paid $406,560 and work requirements met) | 300,000 | 1,500,000 | ||
August 22, 2024 | 1,200,000 | - | ||
August 22, 2025 | 2,000,000 | - | ||
August 22, 2026 | 2,500,000 | - | ||
$ | 6,200,000 | $ | 3,050,000 |
La Cototuda Claim
Under the La Cototuda option agreement, the Company can acquire a 100% interest in the La Cototuda claim by making cash payments totaling US$900,000 over 36 months as follows:
February 23, 2021 (paid $63,065)
February 23, 2022 (paid $31,745)
August 23, 2022 (paid $291,083)
October 23, 2023 (paid subsequent to the period end) February 23, 2024
Cash payments (US$)
-
50,000
25,000
225,000
250,000
350,000
- 900,000
Two legal claims arose in 2022 regarding the mineral exploration rights over a non-material section (approximately 10 metres wide) at the edge of the Margarita southern property. While the outcome of these legal claims is uncertain, management, after review with legal counsel, believes the claims have no merit. The issuance of the final court decision is pending.
Exploration Activities
A summary of exploration and evaluation costs for the Margarita project is as follows:
Margarita project
Drilling
Geological consulting, salaries and wages Geophysics, sampling and assays Project support
Travel, meals and accommodation Environmental, permitting and concessions Equipment, vehicles, rent and field supplies Share-based compensation
Total
Three months ended | Nine months ended | ||||||
September 30, | September 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
$ | 840,399 | $ | 579,114 | $ | 840,399 | $ | 1,352,879 |
389,029 | 368,862 | 955,425 | 924,423 | ||||
223,853 | 224,037 | 284,453 | 378,602 | ||||
437,298 | 198,247 | 756,346 | 575,602 | ||||
88,570 | 100,212 | 246,471 | 211,764 | ||||
34,272 | 2,495 | 158,342 | 14,950 | ||||
3,815 | 70,371 | 10,864 | 81,972 | ||||
46,039 | 44,621 | 293,152 | 71,301 | ||||
$ | 2,063,275 | $ | 1,587,959 | $ | 3,545,452 | $ | 3,611,493 |
During the three and nine months ended September 30, 2023, the Company executed on its plan to define additional targets on the Margarita project through the completion of a multi-element soil geochemistry survey and to initiate and complete its phase
- drill program. Extensive leaching of copper within the top 20 - 30 m from surface had been observed in the drill results from the Falla 13 discovery in both the phase I and phase II drill programs (both RC drill programs), leading the Company to conduct the multi-element soil geochemistry survey across the project area, primarily to identify gold anomalies as a proxy for copper-
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TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
gold mineralization. The results of this survey identified targets adjacent to the Falla 13 discovery area that demonstrate its potential for growth as well as five new target areas that collectively became the focus of the phase III RC drill program that began on August 17, 2023.
Preparation for the Phase III Drill Program
A number of geochemical targets were identified proximal to the Falla 13 discovery on the Margarita project that included intercepts of 90 m of 0.94% copper and 0.84 g/t gold (22MAR-013R) and 98 m of 0.68% copper and 0.94 g/t gold (22MAR- 014R) within a defined 800 m long mineralized body. The results of the phase II drill program demonstrated that the mineralized system is open along strike to the north-northwest, with the most northerly drill hole, 22MAR-022R, intersecting 48 m of 0.37 g/t gold and 0.26% copper (including 20 m of 0.47 g/t gold and 0.35% copper). Gold geochemistry results have supported the potential to expand mineralization along strike to the north-northwest by 500 m, with gold values in soils observed to the north being comparable to those observed over the Falla 13 discovery.
The Company believes there is the potential for flat lying Manto-style mineralization immediately to the west of the Falla 13 discovery area, where drilling and mapping have defined a mineralized permeable contact horizon between the volcanics and intrusives, located at a depth of approximately 100 m. In this case, the sub-vertical Falla 13 structure acts as a feeder where ascending mineralized hydrothermal fluids can flow laterally along the permeable contact between the volcanics and intrusives, demonstrating the potential to extend the known mineralization considerably. In addition, a second parallel structure has been recognized 300 m to the east of Falla 13 structural corridor. Gold geochemistry results from the parallel structure are consistent with results observed along the Falla 13 discovery and provide a 500 m long north-northwest oriented target that is undrilled. Finally, the west-northwest structures that link the two parallel structures are all deemed to be targets, with drill hole 22MAR- 023 intersecting 130 m of 0.36 g/t gold and 0.28% copper (including 30 m of 1.02 g/t gold and 0.57% copper) across one of the west-northwest oriented structures.
The gold geochemistry results also delineated five target areas that had not been previously drill tested. This included three of the five targets, namely: the Remolino; Margarita North; and Cototuda targets, which were all focuses of the phase III drill program. The additional two targets are prominent gold-in-soil anomalies that are located in the northern third of the project, within areas of generally poor outcrop exposure, and are currently considered early-stage. The Company plans to conduct additional mapping in order to advance these targets to drill stage.
Phase III Drill Program
On October 18, 2023, the Company announced the first set of results from its phase III drill program, which consisted of 14 drill holes over 3,862 m, and which also successfully accomplished the Company's main objectives of: 1) expanding on the original Falla 13 discovery area and 2) discovering a new mineralized body to demonstrate the scale and potential of the mineralized system that encompasses the Margarita project.
The phase III drill program identified a new parallel mineralized structure 200 m west of the original Falla 13 discovery, intersecting 42 m of 1.1 g/t gold and 0.48% copper of sulphide mineralization in drill hole 23MAR-031R and in addition, a new zone of copper oxide mineralization was discovered in the southern area of the project at the Cototuda target, where 132 m of 0.48% copper was intersected in drill hole 23MAR-035R. Finally, broad zones of copper oxide mineralization were encountered at the historically drilled Margarita structural corridor, at the southwest limit of the property, where Torq drilled 62 m of 0.49% copper and 134 m of 0.29% copper in drill hole 23MAR-036R.
Drill hole 23MAR-031R is located approximately 200 m west of the original Falla 13 discovery structure in a zone of significant surfacial iron oxides, without a strong gold or copper signature on surface. The drill hole intersected 42 m of 1.1 g/t gold and 0.48% copper (246 m - 288 m in depth) within a broader interval of 80 m of 0.64 g/t gold and 0.27% copper (232 m - 312 m in depth). The mineralization was encountered within a suite of dioritic porphyry bodies that are situated below the key volcanic - intrusive contact zone, which thus far has defined the position of mineralization along the 800 m long Falla 13 discovery. The gold - copper mineralization is associated with a pyrite - chalcopyrite - magnetite and/or hematite mineral assemblage with alteration within the mineralized interval characterized as strongly sericitic. At this early stage, Torq's technical team has interpreted the mineralization to be hosted in a north-northwest trending structure that is parallel to the Falla 13 discovery and
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TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
that has been mapped on surface and within geophysics over a 1,200 m strike length, demonstrating considerable exploration potential.
Importantly, given that the mineralization encountered in drill hole 23MAR-031R is situated 200 m vertically below the sub- horizontal volcanic-intrusive contact zone, the depth potential for mineralization has increased dramatically within the Falla 13 discovery area. The mineralization is interpreted as being hosted in a feeder structure, with mineralization open vertically upward. The primary targets are the volcanic-intrusive contact zone, where there is the potential for flat-lyingmanto-style mineralization, and the strike length of the structure. The Company is currently planning a set of follow-up drill holes to explore along the north-northwest trending structure, as well as to test for adjacent flat-lyingmanto-style mineralization both to the east and west of drill hole 23MAR-031R.
Drill hole 23MAR-035R is located on the north-northwest trending Cototuda structural corridor, approximately 150 m from the property boundary and the small-scale Cototuda copper oxide mine situated just to the south of the property boundary (Figure 1). The drill hole intersected 132 m of 0.48% copper (including 68 m of 0.76% copper) at a depth of 24 m - 156 m and is characterized by malachite, chalcocite, chrysocolla and black copper oxide minerals within a series of hematite - silica breccia bodies and dioritic intrusives that contain minor amounts of pyrite. The structural corridor is open along strike to the north- northwest for 750 m and represents an excellent opportunity to expand upon this second discovery on the project.
Drill hole 23MAR-036R is located on the north-northwest trending Margarita structural corridor where limited historical drilling in the mid-1990s encountered copper oxide mineralization in the southwest corner of the project. The purpose of drill hole 23MAR-036R was to evaluate the validity of the historical data and to determine the potential to define a coherent body of copper oxide mineralization within the structural corridor. Drill hole 23MAR-036R intersected two broad zones of copper oxide mineralization, including 62 m of 0.49% copper (including 40 m of 0.67% copper) from surface and 134 m of 0.29% copper (including 48 m of 0.40% copper) at a depth of 112 m - 246 m. Mineralization within both intervals was characterized by chrysocolla, malachite, chalcocite and black copper oxide minerals within a feldspar porphyry crosscut by a series of dioritic dykes. The results from drill hole 23MAR-036R exceed the historical results and demonstrate that copper oxide mineralization occurs at greater depths.
At the Remolino target area, a fence of three drill holes was designed to test a coincident magnetic and gold-in-soils geochemistry anomaly that had similar characteristics as the original Falla 13 discovery. Of the three drill holes, two intersected anomalous copper and/or gold mineralization, including 12 m of 0.29 g/t gold from surface and 30 m of 0.14% copper (80 m - 110 m in depth) in drill hole 23MAR-025R and 20 m of 0.25 g/t gold (124 m - 144 m in depth) and 36 m of 0.18% copper (164 m - 200 m in depth) in drill hole 23MAR-026R. Importantly, copper mineralization at Remolino is characterized by intervals of secondary chalcocite copper oxide mineralization, indicating the possibility of a proximal copper sulphide source to the mineralization encountered in the Remolino drill holes.
The results from the remaining seven RC drill holes are pending.
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TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
Figure 1: lIlustrates the position of the discovery holes, 23MAR-031R and 23MAR-035R, at the Falla 13 and Cototuda target areas, respectively, as well as the significant copper oxide mineralization encountered in drill hole 23MAR-036R at the Margarita structural corridor.
Margarita RC Drilling - sample methodology
Analytical samples were taken using 1/8 of each 2 m interval material (chips) and sent to ALS Lab in Copiapo, Chile for preparation and then to ALS Labs in Santiago, Chile and Lima, Peru for analysis. Preparation included crashing core sample to 90% < 2mm and pulverizing 1,000 g of crushed material to better than 85% < 75 microns. All samples are assayed using 50 g nominal weight fire assay with AAS finish (Au-AA24),multi-element four acid digest ICP-AES/ICP-MS method (ME-MS61), and copper sulphuric acid leach with AAS finish (Cu-AA05). Where MS61 results were greater or near 10,000 ppm copper the assays were repeated with ore grade four acid digest method (Cu-OG62). QA/QC programs for 2023 RC drilling samples using internal standard samples, field and lab duplicates, standards and blanks indicate good accuracy and precision in a large majority of standards assayed.
True widths of mineralization are unknown based on current geometric understanding of the mineralized intervals.
Canadian mineral terminology and standards differ from those of other countries. The Company's public disclosure filings highlight some of these differences.
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TORQ RESOURCES INC.
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and nine months ended September 30, 2023
Expressed in Canadian dollars, unless otherwise stated
Margarita Soil Sampling
Approximately 1-3 kg of soil material was collected on a 100 m x 100 m grid and sent to ALS Lab in Copiapo, Chile or La Serena, Chile for preparation and then to Santiago, Chile and Lima, Peru for analysis. All samples are assayed using 30 g nominal weight fire assay with AAS finish (Au-AA23) and multi-element super trace four acid digest ICP-AES/ICP-MS method (ME- MS61L). QA/QC programs for 2022-2023 soil samples using internal standard samples and duplicates, lab duplicates, standards and blanks indicate good accuracy and precision in a large majority of standards assayed.
4.2. Andrea project
On May 12, 2023, the Company agreed to amend the timing of the option payments to acquire 100% of the Andrea project, the updated table of payments is as follows:
Cash payments | ||
(US$) | ||
July 23, 2021 (paid C$132,038) | $ | 105,000 |
May 24, 2022 (paid C$170,937) | 135,000 | |
May 12, 2023 (paid C$81,204) | 60,000 | |
May 24, 2024 | 195,000 | |
May 24, 2025 | 310,000 | |
May 24, 2026 | 1,035,000 | |
May 24, 2027 | 4,160,000 | |
$ | 6,000,000 |
Exploration Activities
A summary of exploration and evaluation costs for the Andrea project is as follows:
Andrea project
Geological consulting, salaries and wages Geophysics, sampling and assays Project support
Travel, meals and accommodation Environmental, permitting and concessions Equipment, vehicles, rent and field supplies Share-based compensation
Total
Three months ended | Nine months ended | ||||||
September 30, | September 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
$ | 9,876 | $ | 53,962 | $ | 25,482 | $ | 241,608 |
- | 2,021 | - | 8,354 | ||||
11,675 | 8,351 | 43,135 | 67,574 | ||||
1,363 | 321 | 18,493 | 19,359 | ||||
- | - | 18,162 | 15,128 | ||||
21 | 17,290 | 79 | 20,130 | ||||
2,643 | 7,784 | 16,240 | 14,829 | ||||
$ | 25,578 | $ | 89,729 | $ | 121,591 | $ | 386,982 |
During the three and nine months ended September 30, 2023, the Company continued to refine its targets based on geochemical sampling, previous geophysical surveys and comprehensive mapping at the Andrea project. The integration of these data sets has resulted in a set of defined targets for the Company to drill test.
4.3. Santa Cecilia project
In order to maintain the Santa Cecilia project option agreement, the Company needs to make option payments up to October 21, 2028. The Company has made on-time all the required option payments totaling US$400,000 to the date of these financial statements.
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Torq Resources Inc. published this content on 29 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 December 2023 14:08:20 UTC.
