{kanada_flagge}Element 29 Resources (WKN A2QKKG / TSXV ECU) is exploring and developing two advanced copper projects in Peru – Elida and Flor de Cobre. The company has already taken a big step forward in 2022 and was able to present a first, strong initial mineral resource estimate (“MRE”) at its Elida copper deposit.
{kanada_flagge}Element 29 Resources (WKN A2QKKG / TSXV ECU) is exploring and developing two advanced copper projects in Peru – Elida and Flor de Cobre. The company has already taken a big step forward in 2022 and was able to present a first, strong initial mineral resource estimate (“MRE”) at its Elida copper deposit.
The MRE for the Elida copper deposit amounts to 2.24 billion pounds of contained copper. However, this initial MRE is only on a small portion of the first target they have been able to test on Elida so far – and they have already identified four other very similar targets in the project area. This means, in our view, that not only are there excellent opportunities to significantly expand this initial resource estimate by further drilling Zone 1, but that it is entirely possible that the company will prove four more similar deposits at Elida! In fact, the company is currently undertaking a phase two drill program at Elida.
And Elida, as mentioned, is just one of two main properties that Element 29, under the leadership of new CEO Steve Stakiw, is working hard to explore. The Flor de Cobre project also has the potential to host economically significant copper deposits. The company has drilled 4,532 metres at the Candelaria porphyry complex this year and has in the latest results proven up excellent 0.77% copper over 349 metres, including 123 metres of 1.42% copper. At Flor de Cobre, Element 29 has thus been able to confirm not only historic drilling but also deeper primary sulphide mineralization.
Here too, for Flor de Cobre, the company wants to define an initial mineral resource that meets current Canadian standards as quickly as possible. To this end, the company now intends to raise fresh capital and has announced that it will issue up to 6,250,000 units at CAD 0.20 per unit, with each unit consisting of one Element 29 share and half a warrant. Each whole warrant can then be exercised within a period of two years after completion of the placement at 0.30 CAD.
Conclusion: In our opinion, the Element 29 share price has developed almost diametrically opposed to the company’s progress at its projects. We believe this is largely due to the current market environment. While almost all experts are forecasting that copper demand, and thus the copper price, will increase significantly in the long term given the expected strong increase in demand from the electromobility and renewable energy sectors, at the same time there are significant concerns about the short-term global economic outlook given Russia’s war on Ukraine, ongoing COVID19 restrictions especially in China, and disrupted supply chains around the world, etc., etc. – which in turn is depressing copper demand and price in the short term. Given this, we believe that investors who believe, as we do, that the demand for copper will increase dramatically in the long term should take a closer look at an advanced explorer such as Element 29 Resources, which of course remains a risky speculation, still. By the way, the last financing – a little more than a year ago – the company carried out at 0.60 CAD per unit. Currently, interested investors who are willing to take the risks could get in at a considerably lower price.
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