Element79 Gold declares force majeure on Lucero Project amid community conflict in Peru

Element79 Gold Corp. (CSE: ELEM | FSE: 7YS0 | OTC: ELMGF) has formally declared force majeure on its flagship Lucero Project in Peru, halting payment obligations tied to the asset amid sustained community conflict and regulatory gridlock. The Canadian mining company says the move will remain in place for up to 24 months or until the local environment stabilizes enough to allow exploration and production to resume.

The past-producing Lucero Project, located in the Arequipa region of southern Peru, has long been positioned as a cornerstone in Element79 Gold Corp.’s strategy to become a premier gold and silver producer in the Americas. However, two years after acquiring the site through its Peruvian subsidiary Calipuy Resources Inc., the firm has yet to commence meaningful operations due to access restrictions, delays from authorities, and municipal failures to enforce mineral rights. The suspension marks a pivotal moment for the junior miner, which is increasingly redirecting its resources toward the U.S., particularly Nevada’s mineral-rich Battle Mountain district.

Institutional investors and retail shareholders alike are now watching closely as Element79 Gold Corp. reconfigures its exploration roadmap to prioritize lower-risk jurisdictions while maintaining a long-term view on Peru.

What conditions triggered the force majeure declaration at Element79 Gold’s Lucero Project in Peru?

The decision by Element79 Gold Corp. to issue a notice of force majeure under the Lucero Project Agreement was rooted in escalating tensions with local stakeholders and prolonged governmental delays. According to the June 27 press release, the mining company has faced a confluence of operational hurdles since acquiring the Lucero Project on June 19, 2022. These include unresolved community opposition, a lack of legislative clarity from national authorities, and an inability to enforce mineral claims through local municipalities.

Such conditions have rendered it impossible for Element79 Gold Corp. to conduct on-the-ground work. The notice of force majeure, issued to Condor Resources Inc.—the entity from which the project was optioned in December 2020—serves as a contractual mechanism to pause financial obligations for a maximum of 24 months or until the situation improves.

The term “force majeure” generally covers unforeseeable or uncontrollable events that prevent a party from fulfilling contractual obligations. In this case, the mining company cited a “Force Majeure Event” due to external impediments that are beyond its control, and clearly documented its inability to initiate exploration or commercial mining activities on the Lucero asset.

This declaration ensures Element79 Gold Corp. is not penalized for missing milestone payments or work commitments during the suspension period, allowing it to protect liquidity and regulatory compliance without formally walking away from the project.

How are institutional investors responding to Element79 Gold’s operational challenges in Peru?

Institutional sentiment around Element79 Gold Corp. has recently shifted toward cautious optimism, reflecting a preference for jurisdictional de-risking and near-term exploration catalysts. Although some investors had originally viewed Lucero as the most advanced asset in the company’s portfolio, the lack of operational progress and sustained social tensions have tempered enthusiasm.

Analysts covering the junior mining sector suggest that the invocation of force majeure, while initially concerning, is increasingly viewed as a prudent legal and financial strategy rather than a harbinger of project abandonment. From a capital allocation perspective, this move allows the Canadian mining company to redirect resources toward U.S.-based assets while retaining future optionality on Lucero.

Notably, institutional commentary has also acknowledged the firm’s timely acquisition efforts in Nevada, which now appear critical in offsetting Peruvian risk. Element79 Gold Corp.’s recent Letter of Intent (LOI) to acquire the Gold Mountain Project—a drill-ready gold property in Lander County, Nevada—is now emerging as a central theme in forward-looking investor discussions.

As regulatory bottlenecks and stakeholder tensions in Peru continue to stall junior exploration, investor appetite is increasingly gravitating toward North American assets with stable permitting environments, road access, and historic drill data.

What strategic opportunity does the Gold Mountain Project present for Element79 Gold in 2025?

On June 17, 2025—just 10 days before the Lucero force majeure announcement—Element79 Gold Corp. signed an LOI to acquire the Gold Mountain Project, a 284-hectare claim package located in the heart of Nevada’s Battle Mountain Trend. The acquisition targets a highly prospective area with historical intersections of 10.67 meters at 0.99 grams per tonne of gold, as well as evidence of porphyry and skarn-style mineralization.

The transaction terms include an all-equity issuance of 100 million common shares to the vendor at a deemed value of either C$0.02 or the 10-day volume-weighted average price prior to closing, whichever is lower. Element79 Gold Corp. emphasized that this transaction will not result in a new control person or significant shareholder, and that no broker commissions are involved.

Technical groundwork conducted in 2023 and 2024 by the vendor includes detailed mapping and the submission of a Notice of Intent to the U.S. Bureau of Land Management (BLM), which was already approved for drilling. As such, the project is considered drill-ready and may serve as a critical near-term value inflection point for the mining company’s portfolio.

Management has expressed plans to initiate exploration work at Gold Mountain later in 2025, which may include RC drilling campaigns targeting both high-grade veins and deeper porphyry targets. This aligns with a broader institutional trend favoring assets in low-risk jurisdictions with legacy datasets and accessible infrastructure.

How is Element79 Gold rebalancing its portfolio and project risk across the Americas?

With the Lucero Project now temporarily suspended and a Nevada acquisition on track to close by the end of June, Element79 Gold Corp. is accelerating its strategic shift toward North America. The company has also resolved a legal dispute over the Elder Creek Claims in Nevada by divesting 23 overlapping claims and receiving USD $14,000 in compensation. The settlement clears the path for Element79 Gold to consolidate efforts around higher-priority Nevada assets.

In addition to the Gold Mountain Project, the Canadian gold and silver developer maintains exposure to multiple properties along the Battle Mountain Trend. These projects are considered central to its new exploration roadmap and benefit from the logistical advantages of being situated in one of the most mining-friendly jurisdictions globally.

In Ontario, the firm has completed the transfer of its Dale Property to a wholly owned subsidiary, Synergy Metals Corp., and is pursuing a formal Plan of Arrangement spin-out. While not a near-term cash event, the transaction may unlock shareholder value over time through future listing or asset monetization events.

As of mid-2025, Element79 Gold Corp. presents a rebalanced asset portfolio that spans two core regions: Nevada for active exploration and corporate growth, and Peru for longer-term optionality pending resolution of socio-political headwinds.

What are the short-term risks and long-term outlook for Element79 Gold shareholders?

The near-term risks facing Element79 Gold Corp. remain tied to project execution timelines, community engagement dynamics in Peru, and capital availability for planned exploration. While the force majeure on Lucero mitigates legal exposure, it also extends uncertainty around one of the company’s most historically valuable assets.

In contrast, the company’s expanding Nevada footprint may offer accelerated news flow, which could serve to offset market concerns about Peru. Institutional investors will be looking for timely drill mobilization, technical updates from Gold Mountain, and continued risk mitigation through strategic divestments and non-core asset exits.

Looking ahead, Element79 Gold Corp. is likely to be judged on its ability to execute in Nevada, secure permitting approvals, and convert early-stage properties into drill-defined resources. If successful, the firm could emerge as a leaner and more jurisdictionally de-risked junior explorer in 2026, potentially commanding renewed market interest.