348m at 0.26% Cu Highlights AusQuest’s Cangallo Porphyry Potential

Cangallo Discovery Validates Large Porphyry Potential

AusQuest Limited has delivered a compelling update on its copper-gold exploration efforts, confirming a significant new porphyry system at the Cangallo Project in southern Peru. Maiden reverse circulation (RC) drilling, comprising eight holes totaling approximately 3,000 metres, intersected broad zones of copper mineralisation both near surface and at depth. Highlights include a standout intercept of 348 metres grading 0.26% copper and 0.06 ppm gold from just 6 metres downhole, underscoring the potential for a large-scale, bulk-tonnage deposit.

The mineralisation is hosted within volcanic rocks and tonalite porphyry dykes, with evidence of supergene enrichment suggesting higher-grade zones may be present at the core of the system. The discovery area lies within a caldera-like structure approximately 3 km by 2 km in size, with mineralisation open in multiple directions, indicating substantial upside for resource expansion.

Accelerated Drilling and Exploration Strategy

Building on these encouraging results, AusQuest plans to commence a Stage 2 RC drilling program of around 5,000 metres in late May 2025. This will be complemented by deep diamond drilling later in the year to test the vertical extent of mineralisation and refine geological models. The company is also progressing permitting for additional copper projects in Peru, including Lantana and Playa Kali, with approvals advancing through the Mines Department and National Supervisor of State Assets.

In parallel, AusQuest is actively advancing its Australian base metal portfolio. A major RC drilling campaign has started at the Balladonia Project in Western Australia, targeting copper, nickel, zinc, and rare earth element mineralisation under a Strategic Alliance Agreement (SAA) with South32 Limited. Similarly, a ~5,000-metre RC program is planned at the Morrisey magnetite project to evaluate iron ore potential. Other projects such as Coober Pedy, Mt Davis, Jubilee Lake, Hamilton, and Moora are progressing with geophysical surveys and preparatory work for drilling scheduled in the second half of 2025.

Strong Financial Position to Support Exploration

To underpin this aggressive exploration agenda, AusQuest successfully raised $7.5 million through a placement to institutional and sophisticated investors at $0.036 per share. This capital injection, combined with funding from South32 under the SAA, leaves the company with approximately $8.5 million in cash at quarter-end. The funds are earmarked primarily for accelerating drilling at Cangallo and advancing exploration across the Australian projects.

Operationally, the company reported a net cash outflow from operating activities of $402,000 for the quarter, with exploration expenditure of $1.35 million classified under investing activities. AusQuest maintains a disciplined approach to capital deployment, balancing aggressive exploration with prudent financial management.

Outlook and Strategic Implications

AusQuest’s maiden drilling success at Cangallo positions the company as a notable copper-gold explorer in one of the world’s premier porphyry belts. The proximity of the project to infrastructure and the presence of near-surface oxide mineralisation enhance its development potential. The upcoming drilling campaigns will be critical in delineating a maiden resource and assessing metallurgical characteristics, with preliminary test work already underway.

Meanwhile, the diversified Australian portfolio, supported by South32’s strategic partnership, offers multiple avenues for value creation across base metals and magnetite iron ore. The company’s methodical exploration and permitting progress across Peru and Australia reflect a well-rounded growth strategy aimed at delivering shareholder value through discovery and resource development.