Balance sheet adjustment: Element79 Gold cleans the slate

Element79 Gold (WKN A3EX7N / CSE ELEM) wants to bring the formerly producing Lucero gold and silver mine in Peru back into production as quickly as possible. While this work is being progressed, the management team around CEO James Tworek is “cleaning the slate” and using part of the proceeds from the sale of the Maverick Springs project (Nevada) to settle existing liabilities.

In particular, this includes the full and final repayment of the Waterton Contingent Value Rights Agreement. Here, Element79 Gold has paid a total of CAD 2,200,000, which covers all principal, interest and fees. In addition, further capital from the sale of Maverick Springs was used to repay and redeem additional loans and major liabilities. The exact amounts involved will be disclosed in the company’s third quarter financial statements. According to Element79, these are currently on schedule to be ready before or on the due date.

In addition, the Company issued new shares to settle liabilities totaling $568,710.61 arising from quarterly directors’ fees, payments to officers and management for backdated salaries and certain creditors. These shares were issued at an assumed price of CAD 0.23. Which puts their recipients at the same level as the investors in the company’s last capital increase.

Improved accessibility for US investors

In addition to this balance sheet adjustment, which is intended to form the basis for further growth, Element79 Gold has also applied for the company’s shares to be upgraded from OTC Verified Pink to the OTCQB in the USA. This is expected to improve visibility and simplify trading for US investors interested in the mining sector.

This is because OTCQB is a marketplace for U.S. and international companies in the start-up and development stages that are committed to providing a high-quality trading and information experience for their U.S. investors. In order for companies like Element79 Gold to be traded on the OTCQB, they must keep their financial reports up to date, pass a minimum price audit and undergo a company review and management certification every six months.

Conclusion: Element79 Gold is pulling out all the stops to realize its plans with the formerly producing Lucero mine as planned. The “aggressive” repayment/reduction of liabilities that has now been announced could be an important piece of the puzzle. According to the company, this clean-up of the balance sheet sets the stage for future financings on the way back to production. In our view, the listing on the OTCQB, which is regarded as “higher quality”, particularly in the USA, is another small but not insignificant part of the company’s positioning for future success.