Can you explain the circumstances leading to Element 29 Resources’ (E29) IPO in December 2020?

E29 has recently taken two new copper assets to the market, which is quite unusual in our peer group as most companies only have one key copper asset. The acquisition of the Elida and Flor de Cobre projects in early 2020 prompted the company to complete an IPO in December, raising C$6.7 million to further exploration and development in 2021.

What is the history of the Flor de Cobre property and the Candelaria discovery?

Flor de Cobre is a copper porphyry located in Southern Peru, near Arequipa and very close to the Chapi and Cerro Verde mines. Until recently, it was privately owned by a family who did not have the resources to develop the asset and were happy to sell at the right time. The Candelaria discovery has an historic resource on the project, which was drilled in the 1990s by Phelps Dodge. It was not developed at the time because copper grades needed to be 1% or better to be feasible as a leach project, and the copper price was only US$1/lb at that time. In today’s world, a 57 million tonne resource at 0.67% copper, all above 200 meters (m) from surface, is very attractive. In 2021, E29 plans to modernize this historical resource through a drilling campaign in and around the existing holes. They expect to get their drill permits in Q3 2021 with drills turning shortly thereafter. Additionally, there is another target on the project called Atravezado, which has a similar surface expression as Candelaria but has yet to be drilled. This has the potential to add additional material for an SX-EW type plant.

Can you tell us about the Elida property and the potential you see in this asset?

Elida is a large property of just under 20,000 hectares located 170 km northwest of Lima, and it was drilled by Lundin Mining in 2014-15. There are five individual porphyry targets on Elida, and Lundin drilled numerous holes with 500 to 600 m long intersections returning good copper, molybdenum, and silver grades. The copper equivalent (CuEq) grade is above 0.5%, which is attractive at today’s metal prices. E29 recently received their drill permits and is currently executing the 4,000-meter diamond drill program. They expect to have drill results in Q3 2021 with the goal of publishing a maiden resource estimate early in 2022.

A number of projects in Peru have been stalled due to community conflicts. Where does E29 sit in this regard?

E29’s projects are close to the coast, and there are no communities living on either project. The Aco community is located near Elida, and E29 has a very good relationship with them, which was started with Lundin. They renewed their community agreement with them for five more years during the COVID lockdown and intend to show the community that they will be involved in the project as a main stakeholder. At Flor de Cobre, the Candelaria property is largely owned by the government and a local company. The Atravezado target involves a community that E29 already has an agreement with to do the surface work, and they have helped with geophysical labor and camp work.