Element 79 Gold Corp. (CSE: ELEM) (OTC: ELMGF) (FSE:7YS) (“Element 79 Gold”, the “Company”) is a mining company focused on gold, silver and associated metals in Nevada and Peru.
In the past, I have referred to ELEM as not in the mining business but in the business of mining. Today’s announcement of an LOI with Compañía de Minas Buenaventura S.A.A. (BVN) enhances the Company’s growth as well as further proves the value of Elemental’s Lucero property near Chachas, Arequipa, Peru.
As the ELEM CEO states, it serves to unlock Lucero’s potential.
This deal proves the mission stated on ELEM’s website landing page, Innovating the Junior Mining Model: Near Term Cash Flow Potential with Blue Sky Exploration in Nevada and Peru.
CEO of Element 79 Gold, James C. Tworek, stated, “This LOI represents a pivotal moment for ELEM – Proof of Concept that this past-producing mine has valuable economic potential today – by aligning with a potential regional commercial partner and spurring the path to restarting commercial production in the near term. Our team has a series of project milestones to achieve along the way to realizing this potential offtake, including completing a Definitive Agreement with BVN. We are confident our efforts will enrich our understanding of Lucero’s property and help unlock more of the inherent value of ELEM’s crown jewel.”
The Deal?
The ELEM/BVN LOI paves the way for the sale of ore from the Lucero property. This deal marks a pivotal moment in the Company’s journey and aligns directly with its cash-flow generation strategy for 2024.
Some Salient Points
First:
Compañía de Minas Buenaventura is a Peruvian precious metals-producing company with experience in mine exploration, development, construction and operation. It has developed a business culture that focuses on caring for the environment, the health and safety of all our collaborators, and respect for communities. BVN was the first Latin American mining company to list on the New York Stock Exchange in 1996.
- Definitive Agreement: The parties are committed to negotiating a Definitive Agreement approximately 90 days before the Pilot Program’s start.
- Quantity: ELEM will deliver an average of 200 tons per day of ore to BVN’s Orcopampa facilities under the Pilot Program.
- Right of First Refusal: BVN has the exclusive right of first refusal to buy the ore produced by ELEM during the Pilot Program.
- Purchase Price: The purchase price per metric ton of ore will be determined per delivery after sampling and testing by BVN, based on industry standards and the LME (London Metal Exchange) pm price of the day.
It is fair to both parties as with many, if not all, of ELEM’s deals. I have listed 2023 deals in past pieces, so look on the site to see that this deal with BVN is far from a one-off.
- ELEM also holds a portfolio of 5 properties along the Battle Mountain trend in Nevada, with the Clover and West Whistler projects believed to have significant potential for near-term resource development.
- In British Columbia, Element79 Gold has executed a Letter of Intent and funded a drilling program to acquire a private company that holds the option to 100% interest in the Snowbird High-Grade Gold Project, which consists of 10 miners.
- West Whistler projects have significant potential for near-term resource development. Three properties in the Battle Mountain Portfolio are under contract for sale to Valdo Minerals Ltd., with an anticipated closing date in the first half of 2024. The Company has also signed an Option Agreement to sell the Maverick Springs project, an advanced-stage exploratory property with an Inferred Resource of 3.71MMoz AuEq (1.37MMoz Au and 175MMoz Ag). It anticipates completing this sale on or before July 21, 2024.
I’ve written about many gold companies that were the ‘on the property’ and ‘drills on the property’ potential market wunderkinder.
ELEM isn’t close to those; it has taken on the mantle of a giant gold company even at this early stage.
Do not discount the importance of today’s announcement.
Oh yes, I own a bit. How could you not?
Bob Beaty
For over 30 years, Bob Beaty has been explaining concepts and companies to the global investment community. One of the original writers for Jim Cramer’s Thestreet.com, he also wrote for AOL (Can/US), the Globe and Mail, and the Huffington Post. Over that period, he illuminated small-cap companies to investors with wit and pith but mostly opinion and facts. Investing should be fun. Pedantic, staid content is no fun.
Before embarking on his writing career, Bob had a successful international journey in the finance industry. He served as a broker, derivatives product manager, and a Director of London's Credit Suisse subsidiary. His career spanned across major financial hubs including Toronto, Vancouver, and the UK, giving him a unique global perspective. (He is still fondly remembering those English client lunches.)
Other than everything Groucho Marx and George Carlin ever said, Bob lives by a simple credo;
‘Never do anything the person standing in front of you can't understand.’ Hunter S. Thompson.
Let’s go.
