Could you update our readers on the results of Element 29’s recent drilling program at Elida?

We completed the Phase 1 drill program at Elida in mid-December 2021. The results were better than we had expected, demonstrating multiple long intercepts of great copper mineralization. For example, the last hole we drilled had a 909 m interval of 0.55% copper equivalent, including a 340 m interval of 0.67% copper equivalent. This proved to us that continuity of copper mineralization at Elida is incredibly significant. We plan to publish an initial resource estimate by Q3 2022.

What are your upcoming plans for the Candelaria copper porphyry?

We started drilling at Candelaria in early February 2022. This copper porphyry, which is part of the Flor de Cobre project, was explored in the mid 1990s by junior resource company Rio Amarillo in partnership with Phelps Dodge. Their team had outlined a historical resource estimate of 57.4 million tonnes of 0.67% secondary copper as a supergene enrichment blanket. While we do not expect the historical resource estimate to change significantly, we plan to verify these results and to extend the drilling to depths of over 500 m to also test the primary copper sulfide potential in the hypogene mineralization below the enrichment blanket. The deeper part of the Candelaria porphyry has never been explored and Element 29 is excited about the potential for this drilling campaign to significantly increase the overall resources for this project.

What is the current state of the Atravezado target?

Atravezado is an additional target in the Flor de Cobre project that has similar surface mineralization to Candelaria. Element 29 has begun the permitting process here and hopes to complete it before the end of 2022. The social licenses will take time, as the nearby community has been designated an indigenous community, meaning there are additional processes involved, all of which are the right thing to do. We do not anticipate any major complications in coming to an agreement with this community as they are very familiar with mining.

How does Element 29 approach its relationships with local communities?

Element 29 approaches community relations with the mentality of creating economic benefits for everybody involved. In addition to our financial investments in the communities and to lease certain grounds and infrastructure, we like to hire and spend locally and create opportunities for community businesses. We view local communities as stakeholders in the company, so they should expect not only economic benefits but also that Element 29 be a good steward to the environment and approach business matters ethically.

What are the opportunities and challenges present in Peru’s mining industry?

Porphyry copper projects are massive operations that take billions of dollars to develop, generate tax wealth and employment for decades and generates immense downstream value for the whole country. The costs of production in Peru are also very low, particularly thanks to fair taxation and low fixed costs like energy and labor. Nonetheless, Peru seems to be lacking political stability as of late. If there is a perception of instability, it makes it much harder for companies to attract foreign investment for mine development all the way down to early grassroots exploration. This is something that the country should take seriously, given the importance of mining to the national and local economies.

How do you see the demand for copper evolving over the next few years?

Poor copper prices before 2020 meant that significantly less money was invested into exploration and development of Tier 1 copper projects. As a result, we expect to see a lot of investment in large scale copper projects to meet the supply gap. This will not be an easy task. Overall, we are very bullish about copper in the near-term and long-term.

What is Element 29’s growth strategy, and what does the company hope to achieve in this regard by the end of 2022?

Element 29's strategy is to move our Flor de Cobre project towards production as quickly as possible. At the same time, we plan to continue building our overall copper resource base to over 4 million tonnes of copper.

By the end of 2022, we hope to have initial resource estimates for both the Elida and Flor de Cobre projects. At Elida, we will undertake a phase 2 drill program to expand the initial resource estimate that we hope to have that out by mid 2022. At Flor de Cobre, we plan to move the project towards a PEA to ultimately make a production decision.