Machacala Property

Machacala Property

Machacala consists of over 4,000 hectares located in the District of Carabamba, Province of Julcan, Department of La Libertad. In 2004, Gold Hawk Resources, Inc. ("Gold Hawk") estimated a total inferred resource of 420,000 Au Eq ounces hosted within 1,560,000 tonnes, which equates to a gold equivalent grade of 8.4g/t, however individual gold and silver grades were not reported.(6) This historic estimate is the most recent historic resource estimate relevant to Machacala, uses only the categories set out in Sections 1.2 and 1.3 of National Instrument 43-101 Standards of Disclosure for Mineral Projects, and was prepared to the quality and rigour as defined by NI 43-101 standards in 2004. A qualified person has not conducted sufficient work on the historical estimate required to categorize this resource to the CIM definition of a current mineral resource, which may include the preparation of a new NI 43-101 Technical Report. Element79 Gold is not treating this historic estimate as current mineral resources and a qualified person has not reviewed the work to define the quality of work associated with this historic estimate.

Machacala was first commercially mined in the 1950s before being acquired and operated by Minera Santa Isabel, S.A. from 1979 to 1991 which mined 230,000 metric tonnes averaging 10.5 g/t Au Eq (6.0 g/t Au and 340 g/t Ag) representing 78,000 Au Eq ounces.(6) Operations were suspended in 1991 due to the persistence of a low gold ($360/oz) and silver ($3.81/oz) price. Neighboring concessions include those owned by Fortescue Metals Group (ASX Listed) and by Fresnillo Peru S.A.C., a subsidiary of Fresnillo plc (LSE Listed).(4,5)

The project was most recently explored by Gold Hawk and Meridian Gold between 1997 and 2004, with a total of 8,500m in 45 core and RC drill holes completed. Highlights of this drilling include 11.6 g/t Au Eq (11.32 g/t Au and 23.6 g/t Ag) over 3.7m in the Casa Fuerza vein, and 15.7 g/t Au Eq (13.55 g/t Au and 164 g/t Ag) in the Fragua vein. Machacala hosts multiple low-sulphidation epithermal Au-Ag veins, of which only four have been only modestly exploited.(4)

"Machacala possesses significant historical data, as well as 8,500 meters of recent drilling, which will streamline the definition of NI 43-101 compliant resources," commented Neil Pettigrew, M.Sc., P.Geo, Director of Element79 Gold. "The project is also at a low elevation and has excellent infrastructure which will facilitate returning the project to production."

Figure. 1 Location Map of the Lucero and Machacala Projects

Sources

1. Presentation provided by Calipuy Resources Inc.
2. NI 43-101 Technical Report on the Lucero Property, Arequipa Region, Peru, September 4th, 2021, provided by Calipuy Resources Inc.
3. https://web.archive.org/web/20220308020414/https://condorresources.com/portfolio/lucero/
4. https://web.archive.org/web/20220308020532/https://www.sandstormgold.com/our-royalties/lucero/
5. https://web.archive.org/web/20220308020602/https://www.sandstormgold.com/our-royalties/
6. NI 43-101 Technical Report on the Machacala Project, La Libertad-Peru (Draft), provided by Calipuy Resources Inc.
7. https://web.archive.org/web/20220308020649/https://www.sec.gov/Archives/edgar/data/1397970/000118374013000409/f8k08162013ex99-2.htm
8. https://web.archive.org/web/20220308020657/https://www.affinitygold.com/machacala-highlights

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