District Metals Confirms Its Exploration Model Ahead of Viken Drilling

Trevor Hall (0:17)

Alright, everybody, moving right along here. We're actually going to head up to Sweden with District Metals. They do trade on the Venture Exchange with DMX and on the OTCQX, with DMX CF. A couple of things of note here. We have some exploration work to get commentary from, from CEO, Mr. Garrett Ainsworth. And then overnight is finally comes conclusion of the federal election that's been taking place. That's been a drawn out saga, but we have some clarity there as well.

Garrett, good to see you. It's been a long time. Let's do start with the exploration work, with the latest, actually some drill results, not from Vekin, but you did confirm some of those MobileMT geophysical anomalies intersecting more black shales. So walk us through this strategy, what you found and really how this continues to open up the district playbook.

Garrett Ainsworth (1:12)

Hi, Trevor. Great to be on with you as always. And yes, so we flew this MobileMT geophysical survey last year on the Vekin property. It lined up nicely with our Vekin deposit. So we went ahead and flew it across the whole Vekin property and then also all the Lumshell properties at that time. And this has never been done in Sweden for Lumshells because it's a fairly new technology. I believe it came out in 2017 or 2019 And then we finally got to bring out the Truth machine and drill tests on the Lumshell properties. And we hit 15 out of 15 holes, returned graphitic black shale, varying in total composite downhole depths of anywhere from I think like 50 meters up to like 140 meters. So it was a technical success. There's some radioactivity associated with some of those graphitic black shales. We have no idea what the geochemical results will be. So that will obviously be very, very important.

I'd say the radioactivity results were anywhere from background to weekly radioactive, and we should get the geochemical results back hopefully late October. So maybe we were able to get the news release out on the drill results from Malgomai and Osterkalen, which are the lump shell properties we drilled out in November. So yeah, I think it was really well executed. And maybe I'll also talk about we lost three holes, and that was very interesting. So the three holes we lost, we're drilling in kind of a lower area. It was a little bit soggy, and all that we got was black return water, which kind of indicated that we're drilling into graphitic black shales. And so I think, and when the core tube came up, there was no recovery whatsoever, and we went down like 1620 feet, or meters, 1620 meters, and there was no core recovery. So we need to go back there at some point and use a triple tube or use larger diameter so that we can get recoveries. But I think that's actually, it really speaks to how friable these graphitic black shales are and potentially amenable to shovel and truck type open pit mining, which is obviously very good on your OPEX cost.

But I was pretty interesting to see that kind of result that we couldn't even recover it in three holes.

Trevor Hall (4:13)

Was it just because of the drill basically grinding everything?

Garrett Ainsworth (4:18)

Grinding and the water washes away. It basically turns it into a mud.

Trevor Hall (4:26)

Okay, so and then it's actually pretty, I'm pretty interested in this. I mean, you're using diamond, you're using diamond core here. I mean, this stuff is very brittle here, Garrett. I mean, how effective is the diamond? Would it be more conducive to do RC or is it just too brittle for RC?

Garrett Ainsworth (4:45)

I think the problem with RC is that if it is wet, you're very limited to depth. So, and in parts of Sweden and parts of the properties, it is quite wet. And with the alum shells, sometimes they're underneath swamps. I mean, we wouldn't get to those areas unless it was the wintertime and it was frozen. But a lot of the drill holes we drilled were right on the edge of swamps and right into the heart of the best conductive parts of the MobileMT anomalies. And we hit exactly what we're targeting, the prophetic black shells. The next big question is, are they mineralized with potentially economic values of uranium and vanadium and potash? But what the MobileMT geophysical survey does, very importantly, it actually uses lightning strikes from around the world. So you get a very weak current that comes from beneath the alum shells coming up.

And it provides you with three-dimensional view of the conductive material.

And that's actually what allows us to see the depth of the graphitic black shells and the potential thickness as well, which is important. So when you fly something like a VTEM where you're inducing a current and you're basically creating like a charge, and these graphitic conductors are so conductive that those systems, like a VTEM or a SkyTEM, quite often would get overwhelmed by the conductivity. So you need to use something that's got a bit lower of a charge from lightning strikes around the world and multiple frequencies. And this really did work, but it's a newer technology. And we did forward modeling with our geophysical consultant, and it showed that it should work. And then we did it, and it did work, and then we drilled it, and we confirmed it. So it's great to see that.