Transformative deal: Element79 Gold opens the door for Lucero cash flow in 2024!

Extremely promising news today from gold and silver company Element79 Gold (WKN A3EX7N / CSE ELEM)! CEO James Tworek’s company announces the signing of a letter of intent with Compañía de Minas Buenaventura (BVN), which, according to Element79, is a big step towards the goal of generating revenue and cash flow from the formerly producing Lucero property near Chachas, in Arequipa, Peru – this year!

According to Element79 CEO James C. Tworek, the letter of intent also represents a key, transformative moment for his company. It confirms the concept that the former producing mine still has “valuable economic potential” that can be leveraged by joining forces with a regional partner and thus paving the way for commercial production in the near future. Of course, Tworek added, the Element79 team still has a number of project milestones to reach before they will be able to make this potential offtake agreement a reality.

Pilot phase contains delivery of 200 tons of ore per day

The letter of intent between Element79 and BVN contains, among other things, a plan for a pilot bulk sampling program to be launched in the middle of this year, which will involve the extraction of a certain minimum volume of ore over a period of 12 months. This will then be processed in BVN’s to Orcopampa mill. The future partners have decided that a final agreement needs be reached 90 days before the start of this pilot program.

The plan is for Element79 to deliver an average of 200 tons of Lucero ore per day to the Orcopampa plant, with BVN having first right of refusal to the ore mined during the pilot program. The purchase price per tonne of ore will be determined per shipment from Element79 after BVN has taken samples and analyzed them. This will be done according to industry standards and the price will be based on the daily price of the London Metal Exchange.

The parties will coordinate the delivery of the Lucero ore in advance so that it can be seamlessly integrated into Orcopampa’s normal operations. Rigorous mechanisms will also be introduced to ensure compliance with agreed specifications.

Another important part of the letter of intent is that BVN will grant Element79 the right to access valuable historical information in its archives. This should, it is hoped by Element79 Gold, provide a more comprehensive understanding of the property and thus enable more effective and efficient mine planning. In particular, this knowledge should be crucial for creating an efficient bulk sampling and processing plan.

Conclusion: For now, it is “just” a declaration of intent, but should Element79 Gold actually manage to implement its plans efficiently and successfully, it could truly be considered a transformative moment for the company. Because then Element79 would transform from a pure explorer to a producer that generates revenue and cash flow in practically no time at all. Of course, this path is not without risks, but in our view it also holds enormous potential for the company and its shareholders. We are excited!