In a fulminant price movement, gold price its way back up to the USD 1,750 per ounce mark in November. It remains to be seen how sustainable this move will be, but it is a welcome sign of life for the gold mining industry, which has recently come under pressure. This could also be an opportunity for the company, to which we would like to draw the attention of the readers of Goldinvest.de today, to move up the value curve again.

We are talking about the Canadian gold and silver explorer Element79 Gold (CSE ELEM / WKN A3E41D), which not only has extremely promising exploration projects in "Elephant Country" Nevada and in Canada, but also the prospect of gold production starting up on its properties in Peru in the near future.

Historic gold mines to deliver cash flow soon

In the middle of this year Element79 completed the acquisition of Calipuy Resources and thus secured a 100% interest in no less than two formerly producing, high-grade gold and silver mines in Peru. One is the Machacala mine, whose historical production was 10.5 g/t gold equivalent (6.0 g/t gold and 340 g/t silver), and the other is the Lucero mine, one of the highest-grade gold and silver mines in Peru's history. It has historically produced at an average of 19 g/t gold equivalent (14 g/t gold and 450 g/t silver)!

For both projects, which have already received approval to mine 350 tons of ore per day, Element79 is pursuing a two-step strategy. The first step is to conduct exploration activities and develop a mining plan by reviewing and evaluating existing workings and exploring previously identified veins at surface and underground. At the same time, past work will be brought up to modern NI 43-101 compliant standards to provide confidence in a potential operating life of at least 5 to 10 years, based on all available historical work.

At the same time, the Company intends to use the regional infrastructure to establish commercial offtake agreements, sustainably process an average of 150 tonnes per day of high-grade ore, and generate cash flow to fund the Company and exploration work on the Company's projects in the U.S. and Canada.

Machacala already has an inferred resource estimate from 2004 of 420,000 gold equivalent ounces from 1,560,000 tonnes of ore. This would equate to a gold equivalent grade of 8.4 grams per tonne. However, this is historical data that is not yet NI 43-101 compliant, but - as is also planned - has yet to be converted into a resource estimate conforming to the current standard.

There are currently no historical or NI 43-101 compliant resources on Lucero. However, the project is poorly explored, yet, so there is significant potential for the extension of known veins and/or the discovery of new veins if modern exploration methods are applied. After all, surface sampling results are available that returned up to 33.6 g/t gold. The former operator of the Lucero mine, Condor Resources, had also identified a highly sulfidized epithermal alteration zone of 1,300 by 1,400 meters between 2012 and 2020, where peak values from samples returned 80.1 g/t gold equivalent per ton (33.4 grams gold and 3,500 grams silver per ton).

Element79, according to the presentation, gives itself six to 12 months to complete the aforementioned steps on Machacala and Lucero and then achieve the cash flows it hopes to generate.

Flagship Maverick Springs project already at 278 million silver equivalent ounces

This cash flow is primarily meant to fund the expansion of the existing NI 43-101 compliant resource at Element79's flagship project, the Maverick Springs property in Nevada, which currently totals 125,421,000 tonnes of ore averaging 68.9 g/t silver equivalent, or 278 million silver equivalent ounces (175.7 million ounces of silver and 1.37 million ounces of gold)!

Maverick Springs has a number of advantages, for example, it is located in a mining friendly and stable environment, in close proximity to a proven productive gold district with numerous, large gold mines. In particular, we believe this close proximity to the world-famous Carlin trend is promising. This is because it is a belt of gold deposits about five miles wide and 40 miles long that is considered one of the richest gold mining districts in the world. More gold has been produced in the Carlin Trend than in all other U.S. mining districts combined! And just 30 kilometers from Maverick Springs is the Bald Mountain mine, operated by Kinross and in production since 2016, producing 205,000 gold equivalent ounces each year.

A precise timetable does not yet exist, but according to CEO Tworek, Element79 plans to upgrade the inferred resource to the indicated category with aggressive drilling - and to expand it in the process. A Preliminary Economic Assessment (PEA) is expected to be completed as early as next year, which should provide a more meaningful indication of the project's potential value.

The Battle Mountain portfolio

Together with Maverick Springs, Element79 then acquired no less than 15 (!) other projects along the Battle Mountain trend, which runs parallel to the Carlin trend in Nevada and also features huge, producing gold mines such as the Cortez and Goldrush mines – belonging to a joint venture between Newmont and Barrick Gold.

Much of Element79 Gold's Battle Mountain projects have had little or no exploration activity, but the properties, Elder Creek (155 holes including up to 3.19 g/t gold over 38.96 metres), Clover (104 holes with up to 25.3 g/t gold over 9.75 metres) and Long Peak (up to 8.02 g/t gold and 174 g/t silver over 9.14 metres) have been explored in more detail.

Element79 intends to focus on the further development of the main project Maverick Springs and to realize the value of the Battle Mountain portfolio primarily through sales, joint ventures or spin-outs, although it intends to explore some, particularly promising projects a little more closely itself in order to increase their value before divesting them in one way or another.

What the monetization of these 15 promising projects can look like, among other things, was shown just a few days ago, when the company reported two letters of intent for the sale of a total of five properties (Long Peak, Stargo, Elder Creek, North Mill Creek, Elephant). The agreements signed provide for Element79 to receive compensation in the amount of $2.125 million (in shares).

Exciting projects also in Canada

As a third pillar, Element79 still has the option on two project participations in Canada. On the one hand, it can secure up to 100% in the Snowbird gold project (by taking over Plutus Gold Corp., which in turn holds an option agreement with Gitennes Exploration Ltd.). Element79 Gold had financed the drill program that was part of Plutus' commitments.

Secondly, for the Dale project, Element79 has an agreement with the land owner, a private individual. Element79 has the option to earn a 100% interest in return for cash payments, the issuance of common shares, share payments and a 0.5% NSR royalty agreement until 2026. In addition, there is a further 1% fee in favor of Keystone Associates Inc.

Results from Snowbird have already been received from underground pick samples which returned up to 357.7 g/t over 0.6 meters. Drilling also assayed up to 8,508 g/t gold and 2,900 g/t silver over 0.15 metres, while trenching assays returned up to 13.03 g/t gold over 0.8 metres.

Dale is at an even earlier stage of exploration. Accordingly, no resource estimate is yet available. However, previous work has indicated up to 3.82 g/t gold in samples from the project area. Last year, Element79 Gold completed a high-resolution, drone-based magnetic survey and conducted trenching, channel and soil sampling and assaying of these samples for gold and silver inclusions as part of an initial exploration program. Grab samples assayed up to 4 g/t gold and rock samples assayed up to 1.2 ounces of silver per tonne.

For both projects, however, Element79 Gold did not yet publish a timeframe and/or budget for further action. Nevertheless, at first glance they appear to be attractive options for future development or monetization.

Conclusion : Element79 Gold (CSE ELEM / WKN A3E41D) is not your typical gold explorer that focuses on a single project and has no prospect of making money in the foreseeable future. On the contrary, CEO James Tworek's company is pursuing two strategies at once to raise capital that could fund future exploration at its very promising flagship project Maverick Springs. Not only is the near-term start of production in Peru meant to serve this goal, but also the sale of projects from the Battlemountain portfolio. Until that time comes, Element79 has access to an as yet unused financing reserve of approximately CAD 4.8 million, according to the CEO, which should be sufficient for at least the next two quarters.

With Maverick Springs, the company also has an advanced project in one of the most prospective regions in the world for the discovery of economic gold and silver deposits, which already has an inferred resource of 175.7 million ounces of silver and 1.37 million ounces of gold. We think Element79 is now well positioned to add or realize value from its projects, and thus regain a higher valuation in the market, assuming good exploration results and perhaps a better market environment. We will continue to report!

 

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According to §34 WpHG we would like to point out that partners, authors and/or employees of GOLDINVEST Consulting GmbH hold or may hold shares of Element79 Gold Corp. and therefore a conflict of interest exists or may exist. We also cannot exclude that other stock letters, media or research firms discuss the stocks we discuss during the same period. Therefore, symmetrical information and opinion generation may occur during this period. Furthermore, there is a consulting or other service contract between Element79 Gold Corp. and GOLDINVEST Consulting GmbH, directly or indirectly, which means that there is also a conflict of interest. Especially since GOLDINVEST Consulting GmbH is remunerated in this case for the reporting on the mentioned company.