AusQuest Cangallo Drilling Reveals Major Porphyry Copper System in Peru

Cangallo Keeps Growing: AusQuest's Drilling Results Point to a Major Porphyry Copper System in Peru

AusQuest Cangallo drilling results in Peru are turning heads across the junior mining sector. AusQuest Limited (ASX: AQD) has released results from its Stage 3 Reverse Circulation (RC) drilling programme at the 100%-owned Cangallo Porphyry Copper-Gold Project in southern Peru, and the numbers are compelling. With mineralisation now confirmed over a strike length exceeding 1,500 metres, broad copper-gold intercepts across nine of thirteen drill-holes, and high-grade hits surpassing 1% copper beginning to emerge in the southern portion of the system, Cangallo is rapidly establishing itself as one of the more compelling porphyry copper discoveries in the region.

Stage 3 Drilling Confirms Scale and Emerging Grade Potential

The Stage 3 RC programme was designed with a clear purpose: confirm the continuity of mineralisation first intercepted in Stages 1 and 2, and stress-test how large this porphyry system could actually be. The results are delivering on both counts.

Results from the first 9 of 13 drill-holes have been received, all from the southern sections of the prospect. The headline intercepts demonstrate both impressive widths and a strengthening grade profile:

These are broad, near-surface intercepts — the kind of geometry that matters enormously in any early-stage porphyry evaluation.

The High-Grade Signal: Why the Southern Zone Is Attracting Attention

While the wide mineralised envelopes confirm system scale, what is generating particular excitement is a cluster of high-grade intervals appearing in the southern portion of the project. Grades exceeding 0.5% copper over meaningful widths have been recorded in multiple holes, with several standout results pointing to the potential presence of at least one porphyry centre nearby:

• 12m @ 1.09% Cu from 112m (CANRC048)
• 12m @ 0.77% Cu from 102m (CANRC047)
• 10m @ 0.61% Cu from 276m (CANRC045)
• 14m @ 0.56% Cu from 332m (CANRC046)
• 12m @ 0.50% Cu and 0.43 g/t Au from 138m (CANRC044)
• 6m @ 0.87% Cu and 0.17 g/t Au from 4m (CANRC045)

Critically, these higher-grade hits are occurring within mineralised intrusive dykes — specifically porphyritic quartz diorite — which are geologically significant. They represent material closer to the parent porphyry stock, the zone where grades typically intensify. Consequently, the company's interpretation is that drilling is beginning to vector towards a higher-grade core.

"We are now seeing higher-grade copper emerging within the system, including results exceeding 1% Cu — which supports our view that we are vectoring towards a higher-grade core."
— Graeme Drew, Managing Director, AusQuest Limited

Gold grades are also strengthening to the south. Drill-hole CANRC044, the south-easternmost hole in the programme, contains multiple intercepts greater than 10 metres with average gold grades ranging from 0.15 g/t Au to 0.43 g/t Au — a trend supported by earlier surface sampling that flagged increased gold potential in this part of the system.

Understanding Porphyry Copper Systems: A Primer for Investors

What Is a Porphyry Copper Deposit?

Porphyry deposits are large, low-to-moderate grade copper (and often gold) mineralisation systems that form around ancient volcanic intrusions. They are typically:

• Very large — often exceeding 1 billion tonnes of ore
• Near-surface — amenable to open-cut mining methods
• Zoned — with oxide mineralisation near the surface grading into richer hypogene (primary) sulphide mineralisation at depth

Why Does This Matter for Investors?

The economic model for porphyry copper projects is well understood and has been proven repeatedly across the Andean belt. Near-surface oxide ores can often be processed using heap leaching — a comparatively low-cost method — providing early cash flow potential before deeper, higher-grade sulphide ores are developed.

Furthermore, the combination of scale, shallow access, and multiple processing pathways makes porphyry systems among the most commercially attractive deposit types in the copper universe.

Glossary of Key Terms

What Happens Next: A Busy Programme Ahead

AusQuest is not pausing to admire the results — the company has a clearly defined forward programme already underway or in preparation.

1. Full geochemical and geological assessment of all Stage 3 RC data is in progress, with multi-element analysis being used to identify zones most likely to host higher-grade hypogene copper mineralisation.

2. Diamond drilling programme of +5,000 metres is scheduled to commence in late May 2026. This deeper drilling will test extensions of the copper sulphide mineralisation at depth, targeting the higher-grade hypogene zone that RC drilling cannot effectively reach.

3. Priority sites for diamond drill-holes will be finalised once all remaining RC assay results from the final 4 holes are received and assessed.

4. Stage 4 drilling pad permitting has been prioritised to enable further RC drilling in the high-potential southern portion of the project. Permits are anticipated in Q3 CY2026, with Stage 4 drilling to commence shortly thereafter.

The company has confirmed that assay results from the remaining 4 RC drill-holes are outstanding, meaning additional intercepts — potentially extending or enhancing the current mineralised footprint — are still to come.

Cangallo's Location Advantage: Often Overlooked, Genuinely Important

One factor that deserves more attention in any assessment of Cangallo is the project's location. Peru hosts some of the world's largest copper operations, with the country producing approximately 2.8 million tonnes of copper per annum, predominantly from porphyry systems along the Andean belt.

What separates Cangallo from many of its regional peers is straightforward geography:

• Located just 25km east of the town of Chala in southern Peru
• Within 10km of the coast, at low altitude
• Close to key infrastructure — a critical factor in any copper project's economics
• Community consultation has been conducted as part of the exploration process, with no critical issues identified to date

For context, comparable porphyry operations in the Arequipa District — including developments at Zafranal and Tia Maria — operate with head grades of between 0.20% and 0.40% Cu. Cangallo's broad intervals already sit within or above this range on an average basis, with higher-grade zones beginning to emerge.

Proximity to the coast and established infrastructure, however, addresses two of the most common economic hurdles for Andean copper projects.

"Cangallo is particularly well located with respect to infrastructure, altitude, and proximity to the coast. Community consultation has formed part of the Company's exploration process, with no critical issues identified to date."
— Graeme Drew, Managing Director, AusQuest Limited

The Investment Case: Scale, Grade, and an Upcoming Catalyst-Rich Schedule

The investment thesis around Cangallo is evolving from "large and continuous" to "large, continuous, and getting more interesting at the higher-grade end." That is a meaningful progression at this stage of a discovery's life.

Key pillars of the investment case:

• Scale is confirmed. Over 1,500 metres of continuous copper-gold mineralisation defined to date, with the system remaining open in multiple directions.
• Grade is strengthening. Higher-grade intercepts above 0.5% and 1% copper are now appearing in the south, suggesting proximity to a porphyry centre.
• Near-surface oxide mineralisation extends from surface to depths of 200–250 metres, supporting the viability of an early open-cut operation with heap leach processing.
• Diamond drilling in late May represents the next major inflection point — deeper holes targeting the high-grade sulphide zone that could meaningfully upgrade the scale and economics of the project.
• 100% ownership means AusQuest retains full exposure to any value creation.
• Location advantage — coastal proximity and existing infrastructure reduce one of the most common risks for Andean copper projects.
• Proven regional context — the Arequipa District hosts several profitable, multi-decade porphyry operations, providing a credible development template.

Why Investors Should Keep Cangallo on Their Radar

Porphyry copper discoveries of genuine scale are rare. When they sit in a proven mining jurisdiction, close to infrastructure, at low altitude, and begin to show signs of a higher-grade core emerging from wide-spaced reconnaissance drilling — they warrant close attention.

AusQuest has been methodically building the Cangallo story since the original discovery announcement in late 2024, progressing through staged drilling programmes that have consistently confirmed and extended the mineralised system. In addition, the current AusQuest Cangallo drilling results in Peru mark a qualitative step-change: not just more of the same broad mineralisation, but the first clear signals that a higher-grade centre may be within reach.

With diamond drilling imminent, four outstanding RC assay results yet to be reported, and Stage 4 permitting advancing in the south, the next several months represent one of the more catalyst-dense windows in this project's short but rapidly developing history.

Key Takeaway: AusQuest Limited (ASX: AQD) has defined a copper-gold porphyry system at Cangallo exceeding 1,500 metres in strike length, with broad near-surface mineralisation and a strengthening high-grade signal in the south. With diamond drilling targeting deeper sulphide extensions commencing in late May 2026 and four additional RC results still pending, the project is entering a period of significant news flow. Investors focused on early-stage copper discovery stories in a tier-one South American jurisdiction should be watching closely.

Ready to Dig Deeper Into AusQuest's Cangallo Discovery?

With over 1,500 metres of copper-gold mineralisation confirmed, high-grade intercepts beginning to emerge, and a diamond drilling programme set to commence in late May 2026, AusQuest Limited (ASX: AQD) is entering one of the most catalyst-rich periods in Cangallo's short but rapidly developing history. Investors seeking early exposure to a large-scale porphyry copper discovery in a proven South American jurisdiction — with 100% ownership, coastal proximity, and a busy newsflow schedule ahead — should head directly to the source. Visit www.ausquest.com.au to explore the full details of the Cangallo project and stay across developments as they unfold.