Kootenay Targets 100Moz Silver at Columba Project | Jim McDonald

0:00Hello, welcome to Kitko Mining with me Paul Harris, here at the 2026 PDAC in Toronto in Canada. We are talking about precious metals exploration in Mexico and a great pleasure to be joined by Jim McDonald, President and CEO of Cootene Silver which trades on the TSXB under the ticket KTN. Jim, welcome back to Kitko. Yeah, it's good to be back, Paul. Since we last spoke, you've been hitting the jewels, you've been putting out some great drilling results. You've got a 50,000 meter program underway at the 54 million ounce Columbia resource in Chihuahua, some big step house there and you're hitting grade such as 10 meters at 503 grams per tonsil of a plus lead plus sink. A great start to this particular campaign, Jim. What's going on there and what are you looking to do with this campaign? Well, I'll expand on that 54 million ounces. That was the maiden resource. We put out mid-year last year in 25. Great start. Really important is the width of the veins.

1:02We're seeing five to six meters wide and average with really great width for underground mining. All of the resource zones that we've defined are open to expansion. So this program is very focused and simple in that it's a grid pattern of drilling. Just stepping out of 100 meters at a time, which is big step outs and veins, to find the limits we already have. Looking to expand what's there, it's open and we need to first find the edges of what we already know. After that, we'll start to get into exploring those veins that maybe have a few holes, but no resource to find yet. Then after that, veins that don't even have any drilling in them at all. So the majority of this 50,000 meters is going into expanding the 54 million ounces is silver that are defined already because those zones are open-ended. So you have a target, Jim,

2:03in terms of, you know, with this, this step outs, this expansion drilling that you want to get the resource from 54 million ounces, is to bex million ounces fingers crossed. Yeah, our expectation is to be able to get this to 100 million or maybe some multiple of that, the size, physical size of the system is such that you can easily host 100 million ounces or some multiple of that. And the other interesting feature this geologically is it's barely suffered any erosion. The lowest points at topography on that property have just barely exposed the top parts of the veins. So higher in elevation, your veins start to disappear, they're preserved underneath. So there's a tremendous amount of upside potential here. Exiting this program, we want to have an update on the resource, and we want that, of course, to be quite a significant update. And our aim is to get it to 100 million, whether it's on this round or the next, and get it to a size that will justify then a PEA. So you need a certain mass that you need to

3:08get to do, make pay for a capital bill, is once we get enough ounces, because we have the grade, and we have the width, and once we get enough ounces, we can start down that economic assessment path. Absolutely. The 100 million ounces, that's typically the rule of thumb isn't it, because that's potentially 10 million ounces of silver for 10 years, that's a good place to start. How easy is it to build the tonnage on the veins when you hit them? How easy is it to define them? Well, I mean, in this case, we've now got established veins and structures that we understand really well from the drilling. The zones are all open, so this phase is pretty simple, just stepping out at 100 meters. When you're stepping out at 100 meters, you're adding a lot of tonnage. That's a big step out on veins, so now it's a matter of drilling. At this stage, it's a matter of drilling and step out. Okay, you mentioned a PEA that's going to be coming at a kilometer at some

4:09point in the future. You're also undertaking a PEA, a preliminary economic assessment at the Lasigara deposit, which is also in Chihuahua. How is that advancing, and what will that potentially look like as and when you complete that study? Yeah, so we have four different deposits, and Columbus has been our flagship deposit last four years because of the grades and the widths we're seeing is the kind of thing that can work at any price. But we have three other deposits that we had sitting on the shelf. We updated all the 43-101 reports on them in the last 24 months or so in anticipation of a silver bull market. Now we're in it. So now it's time to start advancing some of these projects because at 20 something silver, it didn't really look that great. Above 30, they start to look really interesting. So now is the time to move them. So the first of those that we're getting to is Lasigara. It's got 51 million ounces M&I and another 11 in the infertile in an open pit shell, wide open for expansion as well. So a tremendous

5:16upside in this project, but it's already all the work is there to do a PEA. We've launched the PA. We should see that by, well, it's going to be in the second quarter, probably made June of the second quarter when that comes out. So we want to position the company such that assuming that we get a positive result in that PA, we want to now be transitioning ourselves into a Explorer developer as opposed to an Explorer only building ounces. Explorer developer now, and then that and start down the path of feasibility and that project and turning us into a developer and get a re-rating on all our ounces. Okay. Jim, you mentioned the project starts looking really good, a $30 proud silver. Obviously we're well above that at the moment where it's 80s, maybe 90s as we sit here today. The silver price has been much higher at the start of the year. It's been quite volatile. What are your thoughts on the pricing you're going to use in the PEA at Lasigara to both

6:18show its potential, capture the value, but also obviously you need to remain cautious and prudent as you're looking to advance a project towards that development moment. Yeah, well, it's interesting to have to pick a silver price when it's recently hit 120. Now we've pulled back and consolidated, but there's there's regulatory guidelines on that and there's there are industry standards for that and it is used at a three-year training average. So three-year training average is around $38.40 at the moment. So that's what we'll use, but the silver is still trading in the 90 dollar level. It doesn't make a lot of sense at the same time. So you always put out a sensitivity table of lower price, a couple of lower prices, what it looks like, and then you look at some higher prices, and then you can also publish a number of what the spot would be when you publish.

7:19Okay. The company's well-funded. You recently raised another $18 million Canadian dollars. What does that bring your treasury up to? Yeah, so we're just right around 38 million Canadian right now in the treasury, and we have warrants that are coming due in April and May that have the potential to bring in another $11.5 million approximately, and they sit at $1.40 and $1.58. Okay. With the, you know, you've got sounds like you've got more than enough cash to do the work programs you want to do this year, both in terms of the drilling at Columbus and executing the PEA on Lasigara. With the excess cash there, you're just going to hold that as cash balance to fund things in perhaps 2027. Are there certain things you can perhaps accelerate using that additional cash this year? Yeah, well, we've added 10,000 meters to that 50. So we've actually expanded the Columbus program to 60,000 meters. Later in the year, we'll do a drilling program at Lasigara

8:22because there's a gap zone within the resource. It could add a significant number of ounces that will come after the PEA, in fact. And so some of that capital will go towards those two things. Once we have the PEA results from Lasigara, then we'll have some decisions to make and we may be going down the path of feasibility then and applying some of those funds to that. Then with regards to Columbus, we publish a updated resource around the end of the year, beginning of the new year, and then we'll be making a decision, well, do we have enough now to go to PEA and continue drilling and expanding at the same time? So those decisions we've made sequentially as we go. In the meanwhile, we'll also be looking at the remaining two deposits. We have La Negra and Promontorial and evaluating them, doing some internal evaluation on what price is silver. Do they

9:22really start to look interesting and what work can we do at this moment to start advancing now? Is that something you might pick up work on this year or again? Is that something more for 2020? Well, we may do a little something on those projects this year. There's some metallurgical things that we can investigate that could really benefit the Promontorial, for example, and actually pretty low budget stuff could really change the, how you think of the project. So we'll do some things like that that could add a lot of, there's small things, but they can add a lot of benefit. We'll be doing that this year. And then the answers we get from that kind of work will tell us what we're going to do for 27. Okay, now you mentioned you've got I think you said 38 million warrants of the Jew in April and May. You recently announced you have, we have 38 million cash and we have 11.5 million dollars more in warrants that are expiring April and May. Thank you for that correction. You announced a couple of weeks ago that you're going to do a

10:24one million dollar Canadian internet marketing and advertising and program marketing program there. Is that to support the share price as you go into that to warrant exercise period? So that they will exercise hopefully? Yeah, so it's just that. It's designed for that, but it's also designed to get a much broader reach. A lot of retail shareholders that will get out of that with a modest success of 3,000 to 5,000 new shareholders would be a modest success would be happy with that. But also those warrants that are expiring, it's around 8.5 million and shares. So we need to absorb that and redistribute that as well. So it's kind of a double purpose. It's timed for that, but also beyond those warrants, it'll give us a broader base of shareholders more support and hopefully start solidifying that stock price and moving it up. You did a couple

11:25of similar programs in 2025. Did they achieve the results that you anticipated? Yeah, oh yeah, absolutely they did because we can track these programs in real time. There's where we can see the buying and where it's coming from. And so in those programs we were able to immediately see if they were having impact and they did. And they helped bring in like the last six months we've taken in approximately $7 million of warrants in. And so that was a big help in getting that in and creating extra liquidity that was needed for that new star. Oh, congratulations. Now I want to hopefully this isn't too much of a sound up, but obviously Mexico's had some challenges particularly as related to the the resource sector as 2026 has got underway. How has that has that had any impact on investor appetite for exploration stories in Mexico? Well, not so far because the actually there's the stance of a negative sort of stance that Amel had

12:30has been softened by the current administration. So there's been improvements. There's been permits issued. There's positive advances with regards to that. Then more recent news about violence in Mexico and that sort of thing is it's always concerning, but that's something that we've had to deal with in Mexico for the 25 years that we've been there. All our staff is Mexican excepting for one Argentine geologist. So we really understand what's going on in the ground. We only operate in areas that are secure and safe to operate in if we've seen some wonderful projects that are that we're interested in, but we just haven't pursued them if they're in a dangerous area. So that's how you best deal with those situations. There is we are in our quite calm and safe. Okay, but did that cause you to perhaps review

13:30your security protocols, review the way you operate, how you operate in general? Yeah, we constantly look at that and we're very aware of that. We've got certain rules that will follow and the recent activity we just went back and reviewed it against it. Okay, is there something a little more we can do if there's and make changes is necessary? Okay, well let's get back onto more positive things, Jim. You've got a lot of going on. Why don't you give us a recap of what the key catalysts for 2020-26 will be so our viewers can watch out for those. Yeah, okay, so it's going to be a whole lot of drilling on Columbia. We just put out some results so where there'll be so steady results coming out for the next several months right through the end of the year and maybe a little bit beyond. A resource update at the end of all that drilling. A PEA and La Cigara Q2, I'd say late Q2, mid to late, and then we'll be making the decision on what to do next there. It could be a whole lot of drilling, it could be some more

14:36network, it could be going right into feasibility on that project. So we won't have that answer until obviously to that studies in. So those are the big catalysts. The other two deposits, Promontory and La Cigara, we'll be doing some internal studies in a little bit of low cost work that could really benefit those and then decide what should be done with those. So we've got a resource base of over 200 million ounces of pure silver, silver equivalents over 300 million. So we've got a tremendous asset based to work with in this kind of market and as you see we're moving a lot of things ahead now. You're getting closer to those really exciting times and those really exciting decisions for a company head. Yeah absolutely, this is a great year, we've got the money to do it and it's going to be very very exciting this year. Well I wish you the best of luck in the execution of those plans and look forward to catching up with you a little bit later on this year to find out how things go. Jim McDonald, thank you very much for joining me today.

15:39Best of all, appreciate it. And we have a lot more to come from the 2026 PDAC in Toronto in Canada. So stay tuned and hit that subscribe button. Oh and incidentally, Kudnerley Silver trades on the TSXB under the ticket KTN. Unpool Harris and this is Kiko Mining.