Chesapeake Gold (TSXV:CKG) - Proprietary Oxidation Process Could Help Unlock $1.5T in Stranded Gold

Apr 10, 2025

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Interview with Justin Black, CMO, and Jean-Paul Tsotsos, Interim CEO of Chesapeake Gold Corp.

Our previous interview: https://www.cruxinvestor.com/posts/chesapeake-gold-tsxvckg-innovative-technology-new-gold-ounces-5163

Recording date: 7th April 2025

Chesapeake Gold has developed a groundbreaking oxidation technology that could revolutionize how refractory gold deposits are mined globally. The company's Metates deposit in Mexico, containing 17 million ounces of gold and 423 million ounces of silver, was previously considered too challenging to develop economically due to its refractory nature, where gold is trapped in sulfide minerals.

The proprietary technology transforms sulfide ore into oxide ore through an accelerated oxidation process, making previously unrecoverable gold accessible through conventional heap leaching. This innovation essentially compresses what would naturally take "100 million years" into just months, by applying special reagents that strip sulfur from pyrite crystals and replace it with oxygen.

The economic impact is dramatic. Previous development plans for Metates required pressure oxidation autoclave technology with a capital expenditure of approximately $3.5 billion for a 90,000 ton per day operation, yielding a sub-10% internal rate of return (IRR). With the new technology, Chesapeake can start with a 15,000 ton per day operation at a capital cost of just $360 million, achieving a 35% IRR and all-in sustaining costs of approximately $750 per ounce.

Justin Black, Chesapeake's Chief Metallurgical Officer who previously worked with the technology at Hycroft Mining, demonstrated its effectiveness on a commercial scale with a 150,000-ton test pad. Material that initially had only 20% recoverable gold achieved 80-90% recovery after treatment. For Metates specifically, tests showed that material oxidized for 204 days reached nearly 75% gold recovery compared to just 33% for untreated ore.

Beyond economics, the technology offers significant environmental advantages over traditional methods for processing refractory ores, including lower water consumption, reduced energy usage, and lower greenhouse gas emissions.

According to CEO Jean Paul Tsotsos, this technology could unlock a market worth approximately $1.5 trillion in currently inaccessible gold resources. McKinsey estimates approximately 580 million ounces of gold globally are considered refractory, with these deposits typically offering higher grades (averaging 2.25 g/t versus 1.21 g/t for non-refractory deposits).

The company has identified over 200 deposits globally where the technology could apply and is advancing on multiple fronts, including continuing test work, analyzing samples from other companies, and planning to establish a pilot plant to further demonstrate the technology's effectiveness.

View Chesapeake Gold's company profile: https://www.cruxinvestor.com/companies/chesapeake-gold