4.4 million CAD in cash generated from sale

Now the deal is done and dusted! As previously reported by Goldinvest.de, Element79 Gold (CSE ELEM / WKN A3EX7N) is selling the former main project of its Nevada project portfolio Maverick Springs to the Australian company Sun Silver. The process has dragged on, but now CEO James Tworek’s company can announce the exercise of the binding option agreement to complete the sale of Maverick Springs!

Element79 acquired the project in 2021 and has since developed it further. Among other things, a resource update was carried out, certifying Maverick Springs inferred resources of 3.71 million ounces of gold equivalent in accordance with the Canadian NI 43-101 standard.

Element79 had already started looking for financing partners for Maverick Springs last year, as the formerly producing Lucero gold mine was already coming into focus at that time. In August 2023, the company then negotiated and later signed the binding option agreement with Sun Silver.

Proceeds from the sale support Lucero development

Element79 is now focusing almost exclusively on the development of the high-grade Lucero project in Peru, where it sees the potential for a return to production in the foreseeable future. The proceeds from the Mavericks Springs transaction come at just the right time. According to Element79, the adjusted costs for the original acquisition of Maverick Springs were CAD 3.337 million, while the project can now be sold for CAD 5.033 million. This means that the value of Maverick Springs has been increased by CAD 1.696 million. This means an ROI (return on investment) of 51% – within just 28 months, as Element79 Gold calculates.

As the company further explains, the sale will generate a total of CAD 4.4 million in cash. In addition, Element79 will receive 3.5 million Sun Silver shares at AUD 0.20, which represents a fair market value of AUD 700,000. It is expected that the Sun Silver shares will be tradable on the ASX from approximately May 15.

According to Element79, it will use CAD 2.2 million of the proceeds from the sale to repay a loan in connection with the acquisition of the Nevada projects. The remaining capital will be used to fund other corporate projects and operations and to reduce capital debt and liabilities.

“The successful completion of the transaction underscores Element79’s unwavering commitment to executing its strategic plan,” said James Tworek, CEO of the company. “This is a critical milestone in the Company’s history: it is a testament to our team’s ability to create value through project execution and indicates a potential inflection point in our ongoing mission to build a stronger and more focused company; it underpins careful financial management by cleaning up the balance sheet from past efforts; and it provides non-dilutive capital to support operations and advance strategic exploration programs on our core properties to create further value for our investors.”

Conclusion: With the Maverick Springs transaction, we believe Element79 has not only shown that it is possible to create value for shareholders, but also that it is now possible to intensify efforts in relation to the ongoing exploration and optimization of the main Lucero project. This should be all the easier as the company is now in a much more stable financial position. We are excited to see what Element79 Gold can achieve this year.

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