Element79 Gold Eyes Lucero Mine Restart with Palaza Tailings Deal
Vancouver, BC -- September 26, 2024 -- NewsGenie -- Element79 Gold Corp has signed a Letter of Intent (LOI) with S.M.R.L. PALAZA 16 ("Palaza") to reprocess approximately 1.3 million tons of tailings at the Lucero Mine in Arequipa, Peru. The agreement aims to restart the Lucero mine and strengthen the Company’s regional focus.
Under the LOI, Element79 Gold gains exclusive rights to purchase and process tailings from previous mining activities at the Shila and Paola Mines (now known as the Lucero Mine). Element79 Gold will purchase the tailings from Palaza for USD $10 per ton, plus VAT (18%), with price adjustments based on gold market values. Palaza has authorized Element79 Gold to construct a processing plant on its property to process the acquired tailings.
Element79 Gold will make an initial non-refundable deposit of USD $25,000, followed by a 75-day due diligence period. 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. For all tailings processed, Element79 Gold will pay Palaza a 1% royalty based on the London Metals Exchange (LME) spot price of gold.
The project anticipates processing up to 350 tons per day. Based on 2011 and 2012 Plenge Lab tests, AuEq found in the tailings at that time was approximately 1.5g/t. Palaza’s estimates are that there is approximately 50,000oz of gold equivalent recoverable through the life of the project. 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).
Element79 Gold will adhere to local regulations and collaborate with the Chachas Community to ensure environmental and community standards are met. The Company will be testing milling and processing with and without chemicals, milled ore beneficiation, efficiencies, and soil impermeability to prevent soil leaching.
CEO James Tworek stated the agreement enhances Element79’s resource base and positions it for growth while remediating tailings and resolving logistical issues at the Lucero mine and in the region.
Due diligence, including a 43-101 Mineral Resource Estimate report and Preliminary Economic Assessment (PEA), will be completed within 75 days, guiding a final decision. Permitting and community consultation will proceed through Fall 2024/Winter 2025, with plant construction targeted for Q1/Q2 2025.
Kim Kirkland, Chief Operating Officer of Element79 Gold Corp, and a "qualified person" as defined by National Instrument 43-101, has reviewed and verified the technical information in this release.