Element79 set to launch Peru tailings reprocessing business
Mining company Element79 Gold is making headway with its vision of restarting the past-producing Lucero gold and silver mine in the Arequipa region of Peru.
The CSE-listed company has signed a letter of intent with Peruvian company Palaza 16 for the exclusive right to purchase and process about 1.3-million tons of tailings – a byproduct of previous mining activities at Shila and Paola mine, now known as the Lucero mine.
Palaza 16 has allowed Element79 Gold to construct a processing plant on its property. This 350 t/d 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.
Element79 points out that artisanal small-scale miners currently ship mined ores about 600 km away to have it processed.
Element79 will purchase the tailings from Palaza 16 for $10/t, plus 18% value-added tax, with a base case (optional total batch purchase) of $10/t at $2 200/oz of gold, subject to increases based on the market value of gold at the time that batches are purchased.
In addition, for all tailings processed, Element79 will pay Palaza 16 a 1% royalty based on the London Metals Exchange spot price of gold.
According to Palaza 16’s estimates, there is about 50 000 oz of gold equivalent recoverable through the life of the project.
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