Element79 Gold has issued a notice of force majeure to Condor Resources, temporarily suspending payment obligations under the Lucero Project agreement held with its subsidiary, Calipuy Resources. Element79 Gold Corp is a mining company focused on exploring and developing gold and silver assets. Its key asset is the past-producing Lucero Project in Peru, where it aims to resume operations.
The company says it remains committed to advancing the Lucero Project into a commercially viable mining operation and is pursuing alternatives to move the project forward while working with stakeholders to end the force majeure event. Element79 acquired Calipuy in June 2022 and assumed its payment obligations, after Calipuy initially entered into a deal with Condor in December 2020 to purchase Condor’s Peruvian subsidiary, Minas Lucero del Sur SAC, owner of the Lucero Project, for US$3.5 million, potentially increasing to US$6 million based on the price of gold at the time of final payment.
Element79 states it has faced significant difficulties in advancing the project since acquiring Calipuy. Due to conflicts with local communities, delays in legislative and policy approvals, and municipal inaction preventing the enforcement of mineral claims, Element79 has been unable to access the project to perform exploration or commercial mining operations. Calipuy had paid US$465,000 before Element79 assumed obligations, with Condor receiving 250,000 Element79 shares as part of the initial payment.
As a result of these issues, Element79 has provided notice to suspend payment obligations until the end of the force majeure event, or 24 months from the notice date, whichever occurs sooner. The company has noted that it is currently uncertain as to when the force majeure event will cease. A force majeure event refers to an unforeseen and uncontrollable circumstance that prevents someone from fulfilling their contractual obligations.
