Element79 Gold Announces Binding MOU for Sale of Lucero Project

Executive Summary

• Element79 Gold Corp. has entered into a binding MOU to sell 100% of its Lucero Project in Peru to a private purchaser for USD $2,000,000, aiming to mitigate financial and contractual risks stemming from a force majeure declaration in June 2025.
• The transaction will generate approximately USD $600,000 in net proceeds after covering concession maintenance costs and payments to Condor Resources Ltd., allowing the company to refocus capital and operations on its Nevada-based Battle Mountain projects.
• Element79 retains a contingent participation right to 25% of gross profits above $10,000,000 if the purchaser resells or monetizes the asset within 18 months of closing.

Key Details

• Transaction Structure: Binding MOU dated June 10, 2026, for the sale of 100% of shares of Minas Lucero del Sur S.A.C. (MLDS), including all associated mining concessions, mineral rights, permits, and related assets of the Lucero Project in Arequipa, Peru.
• Purchase Price & Deposit: Aggregate consideration of USD $2,000,000; purchasers will immediately pay a strictly non-refundable USD $300,000 deposit, which will be credited against the purchase price at closing.
• Closing Conditions: Scheduled on or before July 31, 2026, subject to customary closing conditions including receipt of applicable regulatory approvals.
• Proceeds Allocation: ~USD $1,100,000 allocated to outstanding progress payments and contractual obligations to Condor Resources Ltd.; ~USD $280,000 plus related fees allocated to maintaining Lucero concessions/mineral rights in good standing prior to June 30, 2026.
• Net Proceeds: Approximately USD $600,000 expected to be retained by Element79 Gold after all allocations.
• Contingent Participation Right: If purchasers complete a subsequent sale or monetization within 18 months of closing, Element79 retains 25% of gross profit realized above $10,000,000.
• Strategic Rationale: Divestiture follows a Board strategic review to eliminate ongoing financial/contractual exposure from force majeure conditions declared in June 2025 due to prolonged social/community impasses. Transfers responsibility for community negotiations (Comunidad Campesina de Chachas) and permitting to a private group better positioned for localized engagement.
• Post-Closing Liabilities: Buyers assume all ongoing rights, obligations, liabilities, community negotiations, permitting matters, formalization processes, and future contractual responsibilities, including future negotiations with Condor Resources Ltd.
• Project Specifications: Past-producing high-grade gold/silver asset covering ~10,813 hectares in Arequipa, Peru. Hosts numerous historically identified epithermal veins with historic grades averaging ~19 g/t Au (unverified). Includes extensive underground workings, existing mine infrastructure, and a significant tailings reprocessing opportunity.
• Future Corporate Focus: Company pivots to advancing its Battle Mountain, Nevada exploration portfolio, specifically the Gold Mountain and Elephant projects.

Notable Quotes

• James C. Tworek, Director: “This decision was not made lightly. Lucero had once been the cornerstone asset of Element79 Gold for several years, and we remain highly confident in the geological merit and long-term value of the project. However, after extensive debate and review, the Board determined that carrying the project forward under ongoing force majeure conditions would expose the Company and shareholders to increasing financial and contractual risk without a predictable timeline toward resolution. We believe transitioning Lucero into the hands of a private group capable of dedicating substantial localized resources toward community and social negotiations represents the best path forward for all stakeholders. The Company announced its pivot towards advancing its Battle Mountain, Nevada projects - Gold Mountain and Elephant - last June, and this asset sale helps increase focus on developing out those assets.”