Key Highlights

•  Peru's government granted Project of National Interest status to Cangallo, proposing a 3,600-hectare land reservation for four years.

•  AusQuest says Cangallo is the first advanced exploration project in Peru to receive the designation, intended to give greater security over surface rights.

•  The company holds approval for a fourth-stage drilling programme of 20 drill pads and is seeking permits for 20 more, targeting drilling in the first half of 2027.

AusQuest (ASX:AQD) has received Project of National Interest status from the Peruvian Government for its Cangallo porphyry copper-gold project in southern Peru. The designation was reported on 28 October 2026 and follows a ministerial resolution dated 21 October 2026.

The resolution proposes a land reservation of 3,600 hectares over the project for four years. AusQuest said Cangallo is the first advanced exploration project in Peru to receive the designation, which is intended to give greater security over surface rights while exploration continues.

What the designation covers

Cangallo sits in the Chaparra district of the Arequipa region. It is held through Questdor, a wholly owned AusQuest subsidiary, and the company has outlined planned investment in the project of US$6.6 million, or about A$9.4 million.

Managing director Graeme Drew said the status "provides a high level of protection for surface rights over the project". He said it also provides a secure path to develop the project over the four-year period, and that the approval reflects support from Peru's new government for exploration and new mining activity.

Surface access is often a significant hurdle for exploration companies in Peru, where land use, community agreements and overlapping claims can delay or halt drilling. A formal reservation backed by a ministerial resolution may reduce some of that uncertainty, although it does not remove the need for permits, community engagement or environmental approvals.

Drilling plans

AusQuest already holds approval for a fourth-stage drilling programme covering 20 drill pads. That programme is designed to test extensions of copper mineralisation up to one kilometre south of the known deposit.

The company said rock-chip sampling and geophysical surveys suggest copper, and possibly gold, mineralisation could extend the footprint beyond 1.5 kilometres of strike. These are interpretations based on surface sampling and geophysics rather than drill results, so the presence, grade and continuity of any extension remain to be tested. The stage four holes will provide the first direct test of the southern targets at depth.

AusQuest is also seeking permits for a further 20 drill pads under an accelerated government initiative, and it is targeting the start of drilling in the first half of 2027. The announcement did not report new drill results or grades, and no mineral resource has been reported in connection with this announcement.

Why it matters

Peru is one of the world's largest copper producers and continues to attract exploration interest from both major and junior miners. For a small explorer, securing tenure and surface rights early can be as important as geology, because permitting delays can consume cash and push back discovery timelines.

National interest status may also help AusQuest in discussions with potential partners or financiers by showing government backing for the project. However, the practical benefits will depend on how the designation is applied in the field, and on whether the company can move efficiently from permitting into drilling.

Risks and next steps

Cangallo remains an exploration project. The extent of mineralisation has not been confirmed by drilling at the scale suggested by surface work, and porphyry systems can vary substantially in grade and continuity. The planned 2027 drilling start depends on permits that are still being sought, and Peru's political and regulatory environment has been changeable in recent years.

Funding is another important consideration for the company. The planned US$6.6 million investment will need to be financed, and the announcement did not detail the company's cash position or funding plans.

AusQuest's disclosed next steps are to carry out the approved fourth-stage drilling programme, obtain permits for the additional 20 pads and begin drilling in the first half of 2027. The company is expected to report on permitting progress and drilling results as work proceeds.