Element 29: The Peruvian Copper Assets

FULL DISCLOSURE: This is sponsored content for Element 29 Resources.

Element 29 Resources Inc. (TSXV: ECU) is a Vancouver-based copper exploration and development company advancing its Elida and Flor de Cobre projects in Peru, the world’s second largest copper producing country.

Peru is a mining-friendly jurisdiction, with the minerals industry accounting for roughly 60% of the country’s exports and 10% of its GDP as of 2021, with the industry exporting $27.2 billion in goods. The country has an estimated 200 operating mines, along with several major projects ready for development, with investment in the sector pegged at more than $53 billion. The industry employs over 237,000 workers.

The Elida Project

The current focus of Element 29 is it’s Elida copper project, which consists of a porphyry copper-molybdenum deposits found north of Lima. The project has several location advantages, including lower elevation at 1,600 metres, ease of access to transportation routes, a nearby national electrical transmission grid, ports, and a nearby hydroelectric generating station.

The relatively low altitude enables more efficient operations than commonly seen elsewhere in Peru, where the workforce operates at much higher altitudes. Here, efficiencies can decline by up to 30% due to the effects of high altitude on people and machinery. 

The 19,210-hectare, 100% owned project, was discovered in 2011 by members of the team and saw an initial mineral resource estimate published in late 2022. Copper mineralization is hosted within a large 2.5 square kilometre alteration system, containing five porphyry centers.

The mineral resource estimate consists of a pit-constrained inferred mineral resource of 321.7 million tonnes grading 0.32% copper, 0.03% molybdenum and 2.6 g/t silver at Zone 1. This translates to 2.24 billion contained pounds of copper, 205.7 million pounds of molybdenum, and 27.0 million ounces of silver.

Element 29 completed a 4,500 metre drill program on the Zone 1 target in 2021 and intersected a number of long intervals of copper-molybdenum-silver mineralization from bedrock to depths of over 900 metres and showed that mineralization remains open at depth.

A recent Phase II drill program evaluated the continuity of the Zone 1 mineralization along strike and in between the wider spaced Phase 1 drill holes. 

One of the highlights from the Phase II drill program came from hole ELID032: 

  • 404.5 metres of 0.45% copper, 0.032% molybdenum, and 3.6 g/t silver, for a 0.55% copper equivalent grade and ended in mineralization grading 0.75% copper, 0.032% molybdenum and 7.2 g/t silver for a 0.87% copper equivalent grade.

The Phase II program confirmed the consistency and continuity of copper mineralization within the Zone 1 resource shell. While the current drill permit allows the Company to drill test all five targets, three of these targets remain untested.  

The initial mineral resource on Zone 1 is based on copper mineralization beginning at bedrock surface and within a conceptual open pit with a low modeled strip ratio of 0.74:1. There are higher grade copper zones located near surface within the resource.

Copper mineralization is confirmed to depths of more than 900 metres, with the resource remaining open for expansion laterally and at depth. Element 29 highlighted hole ELID025, which intersected 908.75 metres of 0.49% copper equivalent, consisting of 0.39% copper, 0.035% molybdenum, and 2.9 g/t silver.

The Flor de Cobre Project

In addition to its flagship Elida Copper project, Element 29 also owns and operates the Flor de Cobre Project, which is found to the south of Arequipa, Peru’s second largest city. The project is close to several of the world’s largest copper-molybdenum porphyry deposits, such as Freeport-McMoran Inc.’s (NYSE: FCX) Cerro Verde Mine, Southern Copper Corp.’s (NYSE: SCCO) Cuajone and Toquepala Mines, the Quellaveco Mine operated by Anglo American Plc.(OTCQ: NGLOY), and Nexa Resources SA’s (NYSE: NEXA) Chapi Mine.

The 1,927-hectare Flor de Cobre property hosts two porphyry copper targets, the 127 hectare Candelaria Zone, and the 1,800-hectare Atravesado Zone.

The Candelaria zone was first discovered in the 1930’s and hosted a small-scale, high-grade copper mine. It was explored by Rio Amarillo/Phelps Dodge (now Freeport) in the 1990’s, who completed diamond and reverse circulation drill programs highlighted by a historical drill intercept of 272 metres of 0.92% copper starting at a depth of 78 metres, including 116 metres of 1.4% copper as secondary enrichment, followed by 156 metres of 0.58% copper as primary sulfides from drill hole K-008. Rio Amarillo tabled a historical copper resource estimate of 57.4 million tonnes of 0.67% copper.

Element 29 conducted a 4,500-metre twelve-hole drill program in 2022 that was designed to confirm the Candelaria zone’s historical drilling data and to test the primary copper sulfide mineralization at depth.

Highlights include drill hole FDC001;

  • 349 metres of 0.77% copper from 78 metres below surface, including 123 metres of enrichment mineralization grading 1.42% copper overlying 226 metres of primary sulfide mineralization grading 0.42% copper. 

The drill results will enable the company to incorporate the historical data into an initial mineral resource estimate for the Candelaria zone in accordance with NI 43-101.

Flor de Cobre’s Atravesado porphyry zone meanwhile is advancing through the drill permitting process. Although the 1800-hectare porphyry copper center is untested and without any historical drilling, it has abundant copper mineralization at surface coinciding with a prominent geophysical signature. As well, due to its very large size and its location only 26 kilometres southeast of Freeport-McMoran’s Cerro Verde copper mine, it is a high-priority target and a significant discovery opportunity for Element 29. 

In addition to its main projects, Element 29 also owns two early-stage projects in the Southern Peru Copper Belt; the Muñaorjo Copper-Gold Porphyry/skarn and the Pahuay Copper-Molybdenum porphyry. The company is currently developing plans for an upcoming exploration program on these properties.

FULL DISCLOSURE: Element 29 Resources is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Element 29 Resources. The author has been compensated to cover Element 29 Resources on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.

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