Element79 Gold Corp Secures LOI For Launching Tailings Reprocessing Business in Arequipa, Peru
ELEMENT79 G OLD C ORP SEC URES LOI F OR LAUNCHING TA ILINGS REPROCESSING B USINESS IN
AREQUIPA, PERU
Vancouver, BC – SEPTEMBER 26, 2024 – Element79 Gold Corp (CSE: ELEM, OTC: ELMGF, FSE: 7YS0,
Hereinafter “Element79 Gold”), a mining company focused on gold and silver committed to maximizing
shareholder value through responsible mining practices and sustainable development of its projects
is pleased to announce the signing of a Letter of Intent (LOI) with S.M.R.L. PALAZA 16 (“P alaza”),
marking a significant milestone in the Company’s strategic efforts to restart the Lucero mine and
concentrate its focus in the Arequipa, Peru region. This agreement represents a unique and
substantial economic opportunity for both parties involved , with multiple additional social and
environmental benefits for the local region and community.
Under the terms of the LOI, Element79 Gold will have the exclusive right to purchase and process
approximately 1.3 million tons of tailings currently controlled by Palaza . These tailings, a byproduct of
previous mining activities at the Shila and Paola Mines (now known as the Lucero Mine), present a
valuable resource for reprocessing for commercial benefit, to cooperatively strengthen regional and
community ties via Palaza's long-term relationships in the region, as well as the tailings project stands
to be come a stronger foothold for the Company’s mining operations in the region immediately
surrounding the Lucero mine.
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Image 1: Element79’s core mineral rights holdings of the Lucero past -producing mine, outlining the
tailings facilities (Relaveras) and former Staging Area (Desmontera)
Key Highlights of the LOI Agreement:
Strategic Acquisition: Element79 Gold will purchase the tailings from Palaza for a competitive price of
USD $10 per ton, plus VAT (18%), with a base case (optional total batch purchase) of $10 per metric ton
at USD 2,200 per ounce of gold, subject to increases based on the market value of gold at the time that
batches are purchased. This acquisition aligns with Element79 Gold 's strategic objective to enhance its
resource base. The 43 -101 and PEA Studies to be completed on the tailings piles during the Due
Diligence period and through 2024 will feed further institutional funding of the Company’s growth.
Construction of Processing Plant: Palaza has authorized Element79 Gold to construct a processing plant
on its property. This facility will not only process the acquired tailings but also become a foothold to
accommodate other mineral ore inputs, from Lucero’s production and regional Artisanal Small- scale
Miners (ASMs), with an eye to maximize operational efficiency and output.
Initial Deposit and Due Diligence: Element79 Gold will make an initial non -refundable deposit of USD
$25,000, followed by a comprehensive due diligence period of 75 days. This thorough evaluation will
ensure the viability and profitability of the reprocessing project. Upon completion of Due Diligence, an
additional USD $50,000 deposit will be required to proceed, in conjunction with the completion of the
Definitive Agreement. All deposits paid will be credited as prepayments for tailings.
Royalties and Economic Impact: In addition to the purchase price, for all tailings processed, Element79
Gold will pay Palaza a 1% royalty based on the London Metals Exchange (LME) spot price of gold,
reflecting the dynamic and lucrative nature of this venture. This agreement is poised to generate
significant economic benefits for both Element79 Gold and Palaza, as well as contribute positively to
the local economy in Chachas, and other neighbouring communities in Arequipa.
New Technologies Being Tested to Implement: Element79 Gold has been reviewing a number of ways
to increase the safety and minimize the environmental impact of the proposed tailings processing plant,
and through its due diligence period, will be testing milling and processing with and without chemicals,
milled ore beneficiation, efficiencies, and soil impermeability to prevent soil leaching.
Community and Environmental Considerations: The project will be executed with full compliance with
local regulations and in close collaboration with Chachas Community and other surface landholders.
Element79 Gold is committed to ensuring that all activities meet stringent environmental and
community standards.
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PROJECT DATA AND ECONOMIC PROJECTIONS
Total Tailings Volume: Approximately 1.3 million tons of tailings available for reprocessing, located on
the same ingress/egress road to the Lucero mine.
Processing Plant Capacity: The new plant will have the capability to handle up to 350 tons per day (tpd)
of mineral.
Economic Impact: The agreement is expected to generate substantial revenue streams for both parties,
with significant contributions to the local economy through job creation and community investments.
Potential Revenue Generation from Tailings:
NOTE: *all estimates subject to change via data collected via the Due Diligence period, to be
reaffirmed via third-party Pre-Economic Analysis report*
Estimated Recovery: Based on 2011 and 2012 Plenge Lab tests, AuEq found in the tailings at that time
was approximately 1.5g/t. Gold solubility/recovery from the tailings is projected at 85% and silver at
75%. Palaza’s estimates are that there is approximately 50,000oz of gold equivalent recoverable
through the life of the project.
Projected Revenue: Potential estimated gross AuEq of $100 million (assuming $2,000 gold price) with
80% recoverable resources ($80 million), minus $16 million input (tailings) cost and scalable $6 -20
million plant cost, resulting in $44 -58 million gross over a 15 -year project life ($2.9-5.3 million annual
gross).
SOC
IAL AND ENVIRONMENTAL BENEFITS:
Social: This venture has been a long -standing issue for the local population by completing the final
remediation of the with the four piles of dry- stacked tailings that have been left inert and covered by
“bio-membranes” and limestone rock for approximately 19 years without remediation. In reprocessing
these tailings , they will be put in their final resting place along with additional tailings created by
production from Lucero and other regional ASMs.
Environmental: Cleans up a benign environmental issue that has been outstanding for the past 20 years.
Economic: Creates a revenue-positive project that serves as a catalyst for building a production plant
on-site and becoming a regional hub for local ASMs. A common thread of conversation with the
Chachas community and the Lomas Doradas artisanal mining association has been the desire to have a
plant more regionally proximate to the community, as they are currently shipping mined ores
approximately 600km away to have it processed today. Helping to eliminate l ogistical costs, risks and
time are all beneficial factors to local miners.
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N
EXT STEPS:
Due Diligence: Upon paying the deposit, the C ompany will have 75 days to complete due diligence,
which data will feed a 43-101 Mineral Resource Estimate report and Preliminary Economic Assessment
(PEA). A Go/No Go decision will follow these reports, with a USD $50,000 payment due upon the
completion of the Definitive Agreement. All deposits paid will be credited as prepayments for tailings.
The Company will pull augur samples from all four piles and, provided that lab tests meet required
internal decision -making standards, the Company will have a 43 -101 compliant Mineral Resource
Estimate of the tailings generated as well as a third-party PEA completed, which will encompass the
project economics, work flow through the life of the project and the final resting place for up to 2.5M
tons of tailings generated from processing the tailings and other throughput.
The Company anticipates that these reports will form the foundation of what it will require to obtain
institutional funding for the development of the mill/tailings processing facility as well restart
commercial production at the Lucero mine.
Permitting, Community Consultation: Secur ing permits for working with the tailings and building a
plant will be process undertaken with the Chachas community and state authorities through Fall
2024/Winter 2025, aiming for a 90- day plant construction start in estimated end of Q1 to start of Q2
2025 after the rainy season ends.
"We are thrilled to enter into this strategic partnership with Palaza, which underscores our ongoing
commitment to strengthening our presence and operational capacity with innovative and sustainable
mining practices," said James Tworek, CEO and Director of Element79 Gold Corp. "The Palaza team have
worked in the region for decades, have solid local relationships and have valuable experience of having
explored and worked at the Shila mine in the past. The end point of this agreement not only enhances
Element79’s accessible resource base but also positions us for long-term growth and profitability, while
helping remediate the tailings piles to stable closure as well as provide a solution to many of the local
logistical obstacles to increasing production from the Lucero mine and other mines in the region. We
are confident that the reprocessing of these tailings will yield significant economic benefits for both
Parties and the Communities involved as well as strengthen our presence in the Peruvian mining
sector."
Qu a lifie d Pe rson
T he techni cal i nformati on i n thi s rel ease has been revi ewed and veri fi ed by K i m K i rkl and, F el l ow of
A usI MM #309585, C hi ef Operati ng Offi cer of E l ement79 Gol d C orp, and a " qual i fi ed person" as defi ned
by Nati onal I nstrument 43 -101.
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A
bout S.M.R.L. PALAZA 16
S.M.R.L. PALAZA 16 is a Peruvian mining company with extensive experience in the management of
Andean mining projects, including reprocessing of mining tailings. Located in the Arequipa region,
PALAZA is dedicated to leveraging its decades of experience in the region and resources for sustainable
and profitable operations.
A
bout Element79 Gold Corp
E l ement79 Gol d i s a mi ni ng company wi th a focus on expl ori ng and devel opi ng i ts past -produci ng, hi gh-
grade gol d and si l ver mi ne, the L ucero proj ect l ocated i n A requi pa, Peru, wi th the i ntent to restart
producti on i n the near term.
T he C ompany hol ds a portfol i o of four properti es al ong the B attl e Mountai n trend i n Nevada, and the
proj ects are bel i eved to have si gni fi cant potenti al for near -term resource devel opment. T he C ompany
has retai ned the C l over proj ect for resource devel opment purposes and si gned a bi ndi ng agreement to
sel l three proj ects wi th a cl osi ng date on or before November 30, 2024.
T he C ompany al so hol ds an opti on to acqui re a 100% i nterest i n the Dal e Property, 90 unpatented
mi ni ng cl ai ms l ocated approxi matel y 100 km southwest of T i mmi ns, Ontari o, and has recentl y
announced that i t has transferred thi s proj ect to i ts whol l y owned subsi di ary, Synergy Metal s C orp, and
i s advanci ng through the Pl an of A rrangement spi n- out process.
Fo
r more information about the Company, please visit www.element79.gold
C
ontact Information For corporate matters, please contact:
James C. Tworek, Chief Executive Officer and Director
E-mail: [email protected]
Fo
r investor relations inquiries, please contact:
Investor Relations Department
Phone: +1.403.850.8050
E-mail: [email protected]
Cautionary Note Regarding Forward-Looking Statements This press contains "forward-looking information" and
"forward-looking statements" under applicable securities laws (collectively, "forward-looking statements").
These statements relate to future events or the Company's future performance, business prospects or
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opportunities that are based on forecasts of future results, estimates of amounts not yet determinable and
assumptions of management made considering management's experience and perception of historical trends,
current conditions and expected future developments. Forward-looking statements include, but are not limited
to, statements with respect to: the Company's business strategy; future planning processes; exploration
activities; the timing and result of exploration activities; capital projects and exploration activities and the
possible results thereof; acquisition opportunities; and the impact of acquisitions, if any, on the Company.
Assumptions may prove to be incorrect and actual results may differ materially from those anticipated.
Consequently, forward-looking statements cannot be guaranteed. As such, investors are cautioned not to place
undue reliance upon forward-looking statements as there can be no assurance that the plans, assumptions or
expectations upon which they are placed will occur. All sta tements other than statements of historical fact may
be forward-looking statements. Any statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using
words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project",
"predict", "forecast", "potential", "target", 4 of 4 "intend", "could", "might", "should", "believe" and similar
expressions) are not statements of historical fact and may be "forward -looking statements". Actual results may
vary from forward -looking statements. Forward -looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause actual results to materially differ from those expressed or implied
by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions;
actual results of exploration activities; conclusions of economic ev aluations; changes in project parameters as
plans continue to be refined; commodity prices; variations in ore reserves, grade or recovery rates; actual
performance of plant, equipment or processes relative to specifications and expectations; accidents; lab our
relations; relations with local communities; changes in national or local governments; changes in applicable
legislation or application thereof; delays in obtaining approvals or financing or in the completion of development
or construction activities; exchange rate fluctuations; requirements for additional capital; government
regulation; environmental risks; reclamation expenses; outcomes of pending litigation; limitations on insurance
coverage as well as those factors discussed in the Company's other p ublic disclosure documents, available on
www.sedarplus.ca. Although the Company has attempted to identify important factors that could cause actual
results to differ materially from those contained in forward-looking statements, there may be other factors that
cause results not to be as anticipated, estimated or intended. The Company believes that the expectations
reflected in these forward-looking statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking statements included herein should not be unduly
relied upon. These statements speak only as of the date hereof. The Company does not intend, and does not
assume any obligation, to update these forward-looking statements, except as required by applicable
laws. Neither the Canadian Securities Exchange nor the Market Regulator (as that term is defined in the policies
of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.