Big Chesser Update at PDAC/Toronto, page-8

Hi @joedirt5,

While the most recent drill results may have disappointed on grade, they seem to be further confirmation of a big, 'tier 1' potential system, just like the neighbors in Mali, Loulo-Gounkoto and Fekola. There is nothing average about that. While I do think it's difficult to portray this to retail investors (especially in this market), CEO Mike Brown did a good interview that was released yesterday, link below:

https://www.youtube.com/watch?v=crhq-TOZ12g


Consistent, 2+ g/t intersections are excellent, even if not spectacular. Unfortunately, the timing is horrible. CHZ is being sold down in a similar way to the entire sector. It is not being sold down because of the results (though I am sure it would hold up better if the recent hits were indeed spectacular).

Getting cash is what's most important right now, to get back to drilling ASAP, both building on the Area A discovery, and potentially making new discoveries at Area D and the Western Splay (as described by Mike in the interview above). But I was thinking a bit about possible comps. I have one that I remember well, as it was one of the very first deposits I studied on the ASX:

The Natougou (now Boungou) discovery made by Orbis (formerly OBS on ASX), acquired by Semafo (SMF on the TSX). This is an excellent deposit (less spectacular than WAF in terms of grades, but similar economics). The one big issue with Boungou is the terrorism in that part of Burkina Faso, not the mine itself.

I bring it up because I think of how that deposit looks, with a "flat-lying" orebody. See this image from one of the Orbis "Scoping Study" Powerpoint back in 2014:




Now please keep in mind that CHZ is VERY early in the discovery phase. The geology might be very different from Natougou. But I also think many people would be surprised to see how relatively narrow holes can make for excellent economics, because of the unique geometry. It is very possible CHZ benefits from similar geometry, especially if we can see the "HangingWall Zone" continue to expand. See this cross-section from my original post as a reminder:



I am just trying to make the point that CHZ already has something that is far better than average. Hopefully the market improves so they can get on with drilling.

As an interesting sidenote: Unfortunately for Orbis, Natougou was 'stolen' by Semafo, as they announced a hostile takeover soon after a coup d'etat in Burkina. Orbis was taken over on the cheap. But in the long-run, Semafo is now suffering because of a horrible terrorist attack on workers traveling to the mine.

Even with CHZ suffering for the moment, at least there are no signs at all of disturbance in Senegal. It's definitely a plus for the long-run.

Cheers,

MBG