Element79 Gold Corp. (Element79, the Company) is heading towards completion of its 2022 M&A strategy, which envisages acquisition of diversified assets with project cycles ranging from early exploration to pre - production phase, all located in well - established mining jurisdictions , such as USA, Canada and Peru. With the latest targets expected to become part of Element79 umbrella in 2022, the Company proceeds with the exploration phase on its existing locations, targeting progress on the NI 43 - 101 - compliant technical studies and subsequent delineation of miner al resource estimates related to its newly acquired properties. Price Target (CAD) 1. 93 Element79 business strategy assumes creation of a balanced mix of early - stage exploration properties in Nevada and British Columbia and pre - production Peruvian assets with potential to be generating cashflow within next 18 months. Future success of this s trategy is closely connected to how efficient Element79 is in navigating its goals: ▪ P reliminary economic assessment (PEA) for Maverick Springs Au - Ag project in 12 months ; ▪ Acquisition of past producing Peruvian mines - Lucero and Machacala during 3Q202 2 , and subsequent consolidation of their exploration data into NI 43 - 101 compliant reports; ▪ Start of cashflow generation from Machacala’s artisanal production offtake/royalty agreements a nd reworking tailings in next 6 - 12 m onths ; ▪ Finalization of acquisition of Snowbird Au project in British Columbia , conduct of new drilling program and NI 43 - 101 compliant mineral resource estimate; ▪ Design of individualized s trateg y towards each property from Battle Mountain portfolio in Nevada. Actual Price (CAD) 0.6 5 Secto r Junior Mining Ticker C SE : ELEM 52 Week Range (CAD) 0.53 – 1.65 Avg Daily V ol ( K ) 104.7 Shares Out. (M) 53. 7 Market Cap (CADM) 34.9 EV (CADM) 3 5.2 Mr. Jan Balla, Partner jan.balla@kna - partners.com Mr. Ivan Panin, Senior Analyst ivan.panin@kna - partners.co m Mr. Stanislav Kartavykh , Senior Analyst stanislav.kartavykh@kna - partners.com We are initiating coverage of Element79 with a target price for next 12 months of CAD 1. 93 per share , impl ying 1 97 % upside potential from the current price of CAD 0.6 5 Our approach is based on relative valuation of relevant peer s, within group of junior gold exploration companies , with asset class comparable to Element79. E ligibility criteria have been derived from the Maverick Springs Project and defined as existence of and title to NI 43 - 101 - compliant mineral resource estimate in the inferred category. I ntroduction Properties Valuation Risk factors Sources Disclaimer Attachment Team Financials Structures Pictures An investment into exploration companies should be considered highly speculative. 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 Volume Close Element7 9, established in February 2020 , is a Canadian - based gold exploration and development company focused on the evaluation, acquisition and development of high - potential gold assets located in favourable and established mining jurisdictions such as USA, Canada and Peru. Element79 began tra ding on the Canadian Securities Exchange in August 2021 under the stock ticker symbol “ELEM” Element79 is cross - listed in the USA as ELMGF and on the Frankfurt Exchange as 7YS. Ever since its incorporation, Element79 has been building a diversified global M&A pipeline [ Source: Press release dated 15 August 2021] with p ortfolio ranging from early - stage greenfield ex ploration in USA and Canada to pre - production assets in Peru Maverick & Battle Mountain. Element79 has acquired its flagship Maverick Springs project located in the famous gold mining district of north - eastern Nevada, USA, between the Elko and White Pine Counties. The project has recently completed a NI 43 - 101 compliant, pit - constrained miner al resource estimate with an inferred resource of 1.37 Au Moz at average grade of 0.34 g/t and 175.7 Ag Moz at average grade of 43.5 g / t The acquisition of the Maverick Springs Project also included a portfolio of 15 early - stage exploration properties along the Battle Mountain trend in Nevada, which the Company is analysing for further merit of exploration, along with the potential for JV, sale or spinout. Snowbird. In August 2021, Element79 has executed a letter of intent to acquire a company holding the option to 100% interest of the Snowbird High - Grade Gold project, which consists of 10 mineral claims located in Central British Columbia, approximately 20 km west of Fort St. James. In March 2022, Element79 has signed a letter of intent to acquire the business and assets of Calipuy Resources Inc. which holds 100% interest in two past producing high - grade Au - Ag mines in Peru - Lucero and Machacal a Dale Property. Element79 also has an option to acquire 100% interest in the Dale Property which consists of 90 unpatented mining claims located approximately 100 km southwest of Timmins, Ontario, Canada in the Timmins Mining Division, Dale Township. Element 79’s team consists of executive management, board of directors and strategic advisors with deep roots in mining, exploration, project development and corporate finance. Apart from this, external mining professionals are involved in the process , with each of Element79’s properties having a dedicated team. M&A strategy focused on asset base diversification ▪ Greenfield early exploration to potentially near - term production projects ▪ Established mining jurisdictions (Nevada, British Columbia, Peru) Secured cashflow position ▪ Equity financing provided by Crescita Capital LLC recently upsized by USD 5 ,000,000 to fund upcoming acquisitions & working capi tal Team ▪ Experienced m ining p rofessionals working in tandem with corporate finance specialists ▪ E xternal mining experts involved ESG initiatives ▪ Good relations with local neighbouring communities in Peru Concentration of exposure ▪ Focus on two metals - gold and silver Titles ▪ Titles to majority of properties have yet to be acquired ▪ Once acquired, good standing shall be constan tly monitored NSR ▪ Currently existing NSR royalties decreasing economic efficiency of assets MRE ▪ Defined only for Maverick Springs ( resource in inferred category) Exploration of underexplored properties ▪ 80% of Maverick Springs area never drilled or explored ▪ Peruvian assets unexplored by modern technology ▪ SGS exploration program @ Maverick Springs & Dale Near term cash generation at Machacala ▪ Re - establishing artisanal production using offtake/royalty agreements ▪ R e - working the existing tailings (reportedly 200,000 tonnes @ 1.26 g/t Au and 74 g/t Ag) Resource delineation ▪ PEA for Maverick Springs expected in 2023 ▪ NI 43 - 101 for Snowbird and Per uvian assets Past producing mines in Peru ▪ High - grade former mines with near - term produc tion potential ▪ Reprocessing of t ailings at Shila Operating mines in close neighbourhood ▪ Bald Mountain @ Kinross ▪ Chimpo - Orcopampa @ Buenaventura ▪ Cote Gold Project @ IAMGOLD Commercially unviable assets ▪ Recently acquired assets/orebodies may not behave as expected Legislative & regulatory ▪ Changes in mining legislative , environmental and regulatory requirements may have adverse impac t on Element79 Social communities ▪ Recent protests in Peru adversely impacting operations ▪ Landowners may refus e to provide access to properties Cash deficiency ▪ Lack of cashflow to finance acquisitions and further exploration programs Gold price ▪ D ecrease of gold and silver prices in future Acquisition price ▪ Overpaying for an acquisition Description. Located in the well - known gold mining district of north - eastern Nevada, Maverick Springs project consists of 247 unpatented lode mining claims with a total area of approximately 4 , 800 acre s. The p roperty is situated within the Maverick Springs Range in Elko and White Pine Counties, a pproximately 85 km southeast of the town of Elko, Nevada The nearest source of power is the eastern Nevada grid system, located approximately 32 km to the northwest. [ Source: Maverick Springs Technical Report, p. 11] Historic drilling. Claims at Maverick Springs were first staked in 1986 by Artemis Exploration Company, and several e xploration programs were conducted at the property between 1987 and 2008 [Maverick Springs Technical Report, p. 11 and 13] 195 holes were drilled over that period, equalling 188,746.6 ft (57,530 m). The current database totals 31,987 assay samples representing 159,233.9 ft (48,534.5 m) of drilling, with an average of 5 ft (1.5 m) per sample More than 80% out of total drilling (157 holes) has been done using RC and core 70% of overall drilling was conducted in pre - 2002 period [ Source: Maverick Springs Technical Report, p. 61] Mineral resource estimate. Updated mineral resource estimate (MRE) and National Instrument (NI) 43 - 101 Technical Report was prepared with an effective date of 7 October 2021 by Allan Armitage, PhD., P. Geo. and Rohan Millar, B.Sc., P. Geo. of SGS Canada Inc. , both of whom are quali fied persons as defined by NI 43 - 101 This report is available under the Company’s profile on SEDAR at www.sedar.com Constrained by a conceptual pit, the current MRE has been classified as inferred resources of 1.37 Au Moz at average grade 0.34 g/t and 175.7 Ag Moz at average grade 43.5 g / t within 12 5,421,000 tonnes [ Source: Maverick Springs Technical Report, p. 13] Using LME prices as of 1 June 2022, inferred resources amount to 3. 4 5 AuEq Moz at an average grade of 0. 88 g/t Update of MRE involved assessment of all surface drilling data completed between 1987 - 2008 (i.e. incorporating additional 52 drills completed since 2004 when last historical MRE was prepared by Snowden), re - interpretation of three - dimensional mineral resource model and application of reduction coefficients on the hist orical data available [ Source: Company press release dated 31 January 2022] Title. In Decembe r 2021, Element79 acquired through its fully incorporated subsidiary 1316524 B.C. Ltd., a 100% interest in the M ining Lease Agreement for the Maverick Springs project and a 100% interest in the lode claims that comprise the Battle Mountain portfolio [ Source: Maverick Springs Technical Report, p. 19 ] Detailed description of the acquisition and payment terms can be found in the Section 7 (Attachment) of this report. Though the original term of the Mining Lease Agreement with Artemis Exploration, wh ich is the underlying owner of all Maverick Spring’s lode claims, has expired, the terms of the agreement continue so long as exploration is being conducted on a continuous basis [ Source: Maverick Springs Technical Report, p. 1 9 ] Certain terms of the Mining Lease Agreement are currently being updated and re - negotiated. NSR. Currently, there is a total net smelte r return (NSR) royalty of 7.4% payable to two entities. Firstly, there is a NSR royalty equal to 5.9% granted to Artemis Exploration Company pursuant to the M ining L ease A greement Secondly, there is a 1.5% NSR royalty granted to Maverix Metals Inc. Moreover, t he Artemis Exploration Company NSR royalty arrangement assumes an ongoing advance royalty payment, with an advance payment of USD 100,000 due in October each year. This advance royalty can be credited against future production royalty payments [ Source: Maverick Springs Technical Report, p. 1 9 ] Element79 is currently re - negotiating terms related to NSR royalties to increase economic efficiency of Maverick Springs project in future Exploration p otential. According to SGS Canada Inc. NI 43 - 101 report on Maverick Springs , the interpreted mineralisation at the property covers approximately 20% of the are a The drilling outside the mineralised envelope, is considered sparse to non - existent [Maverick Springs Technical Report, p. 53] This exploration potential of the Maverick Springs p roperty may result in expansion and upgrade of the existing resource [ Source: Maverick Springs Technical Report, p. 53] , which could have a positive impact on any future open pit mining. Upcoming catalysts Element79 has recently initiated a 3 - month resource upgrade program to assess historical test works to validate and verify their accura cy in a certified laboratory. S mall scale exploration work s as well as tendering of vendors to cond uct future drilling program are ongoing , nevertheless detailed drill ing program (as recommended in Maverick Springs Technical Report ) is not expected to be scheduled prior to obtaining the results of the technical reassessment of resource related data. Once the technical reassessment has been completed, Element79 plans to progress to conceptual engineering targeting preliminary economic assessment report ( PEA ) in 2023 [Source: Company Management , Company presentation for 2Q2022, Company press release 18 April 2022 ]. Bald Mountai n is an operating mine in the close neighbourhood of Maverick Springs, located 110 km southeast of Elko, along the southern extension of the prolific Carlin trend, acquired by Kinross in January 2016 Bald Mountain is an open - pit mine with approximately 3.6 Au Moz of estimated measured and indicated gold resources (as at 31 December 2021) [Source: www.kinross.com] Element79 is currently performing due diligence on two properties with high grade Au - Ag potential, located in Peru (Lucero and Machacala) , owned by Calipuy Resources Inc., with the intent of closing the purchase tran saction during 3Q2022. Both considered to be near production assets, Element79’s the strategy at Lucero and Machacala is focused on three key factors [Source: Company presentation for 2Q2022] 1. Exploration program conducted to review previous workings and explore identified sur face and underground veins. 2. Upgrade of previous work on site to modern 43 - 101 standards providing confidence in being able to responsibly extract ore for sale within 12 - 18 months from acquisition of both properties 3. Leverage regional infrastructure for commercial offtake, providing non - dilutive cash flow to fund corporate operations and exploration initiatives across the company's portfolio of projects. Description. The Lucero property, with elevation between 2 , 900 - 5 , 400 m above sea leve l, is situated in the Arequipa Region in the southern Peru. The property is in the Shila - Paula mining district and encompasses the historical Shila Mine. Three - phase electrical energy from the national grid is available in the town of Chachas , located 40 km from Lucero. S ubject to permitting, surface water is available in streams and small lakes throughout the year Lucero consists of 19 mining concessions, with a total area of approximately 9,600 ha, held by Minas Lucero del Sur S.A.C. While h istorical exploration and mining has been conducted on three of the concessions , majority of remaining concessions remains largely unexplored [Lucero Technical Report, p. 19] Mining concessions in Peru are granted for an unlimited period of time (as long as regular annual payments are made) and represent exclusive right to develop, explore and exploit the resources within the area covered by the concession, subject to obtaining relevant permits. Min ing concessions d o not confer title over the surface land. Project history. Between 1998 and 2004, t he reported annual production of the S hila Mine , historically operated by Minas Buenaventura , averaged approximately 16,300 Au oz and 437,000 Ag oz at average grades of 12.8 g/t Au and 338.1 g/t Ag, with metallurgical recoveries at the ore processing facility av eraging 94.5% and 85.0% for Au and Ag respectively [Source: Buenaventura Securities and Exchange Commission Form 20 - F/A for 2001 and for 2005]. Operations at Shil a Mine were suspended in 2005 due to the persistence of low gold and silver prices at the ti me [ Source: Company p ress r elease dated 17 March 2022] T he Shila Mine and Shila Plant were officially closed by Minas Buenaventura in 2015 with r emediation wor ks still on - going. Environmental liabilities related to historical formal mining have largely been remediated, including the closure of mine workings, dismantling of the Shila P lant, and covering/vegetating of tailings storage facilities [ Source: Lucero Technica l Report, p. 21]. Many historical workings have been sealed off, nevertheless informal artisanal miners maintain access to some [ Source: Lucero Technical Report, p. 20 ] Exploration. L ucero hosts an epithermal complex with both low - sulfidation, and high - sulfidation styles. Historically, high - grade bonanza - style direct shipping ore was mined at Lucero, but the property has not been systematically explored nor drilled in past. [Source: Lucero Technical Re port, p. 50] Ex ploration at the property developed along veins that are mineralized at surface. H istorical mining at Lucero has targeted high - grade Au - Ag mineralization hosted in low - sulfidation veins in the Apacheta, Pillune, and Sando Alcalde clusters Over 70 typicall y sub - vertical veins are reported at the property, fourteen of which have been partially exploited in past. Lucero a lso hosts unexplored high - sulfidation style mineralization which have returned 33.6 g/t Au at surface samples. Prospecting by previous operator Condor Resources Inc. from 2012 to 2020 identified the high - sulfidation epithermal alteration zone with structur es that returned peak sample values of 80.1 g/t AuEq (33.4 g/t Au and 3,500 g/t Ag). This alteration zone, measuring approximately 1,300 m by 1,400 m, exhibited no evidence of prior sampling or drilling and is believed to host potential for a bulk tonnage disseminated gold - silver deposit [Source: Company press release dated 10 March 2022] Mineral Resource Estimate. Latest NI 43 - 101 compliant Technical Report on Lucero was prepared with an effective date of 4 September 2021 by Esteban Manrique Zuniga of Mining Plus, who is a qualified person as defined by NI 43 - 101 Due to a lack of historical data, the project currently does not host any NI 43 - 101 compliant o r historic resources. Exploration potential. Element79 considers that both Peruvian properties include large areas w ith alteration signatures which have not been systematically explored by modern methods. Lucero has not been drilled beyond short production focused holes to assure short range planning , nor has it been looked at from the viewpoint of large tonnage targets [Source: Company press release dated 16 April 2022] T he NI 43 - 101 Technical Report on Lucero concludes that the p roject is underexplored and that there is significant exploration potential for extension of known veins as well as discovery of additional v eins. The metal endowment of low - sulfidation veins can be zoned vertically, veins that are barren at surface may contain precious metals at greater depth. Veins at surface rich in precious metals may transition to be more base metal rich at greater depth [ Source: Lucero T echnical R eport, p. 50 ] Furthermore, historical production records indicate that significant volumes of tailings from the Shila Plant with high - grade mineralization had been sent to tailings storage deposits. R eprocessing of these tailings may represent an additional upside with impact on economic efficiency of Lucero [Source: Lucero T echnical R eport, p. 50 ] Title. In January 2021, Calipuy Resources Inc. entered an agreement with Condor Resources (TSXV:CN) whereby Calipuy Resources Inc. agreed to purchase 100% interest in Lucero property for consideration of USD 3,500,000 payable over 5 years. In March 2022, Elem ent 79 signed a Letter of Intent to acquire all of the issued and outstanding securities of Calipuy Resources Inc. and all of its assets and undertakings (i.e. Lucero property and Machacala property) for USD 15,000,000 to be paid in common shares at an iss ue price of CAD 1.07 per share Finalization of this transaction is expected to take place by end of 3Q2022. A 0.5% NSR royalty is retained by Sandstorm Gold Ltd. The Chimpo - Orcopampa is an underground gold and silver operation approximately 20 km north - northwest of the Property and is operated by Buenaventura. The Chimpo - Orcopampa mine commenced operations in 1967 and currently there are two additional areas under exploitation - Nazareno and Prometida. Proven and probable reserves of Orcocampa as of December 2021 amount to 155,690 Au oz at average grade of 9.3 g /t and 295,407 Ag oz at average grade of 17.7 g /t Its m easured and indicated resources amount to 100,000 Au oz at average grade of 10.0 g/dmt and 263,000 Ag oz at average grade of 23.6 g/dmt [Source: www.buenaventura.com ] Description. Machacala consists of over 4,000 hectares in the District of Carabamba, Province of Julcan, Department of La Libertad. The property is located approximately 1 70 km southea st of the city of Trujillo, capital of the region, and 57 0 k m of Lima, capital of Peru. Machachala is at a low elevation with some existing infrastructure in place , which is expected to facilitate returning the project to production [Source: Company press release dated 10 March 2022] Project h istory. Mining activities at Machacala date back to 1950s. From 1979 to 1991 Machacala was operated by Minera Santa Isabel, S.A. 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 o z . Operations were suspended in 1991 due to the persistence of a lo w gold and silver prices [Source: Company press release dated 10 March 2022] Today, artisanal miners continue to actively leach tailings from prior mining activities. Exploration. Machacala hosts multiple low - sulphidation epithermal Au - Ag veins, of which four have been onl y modestly exploited. Machacala was most recently explored by Gold Hawk and Meridian Gold between 1997 and 2004, with a total of 8,500 m in 45 core and RC d rill 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 [Source: Company press release dated 10 March 2022] Mineral resources estimates In 2004, Gold Hawk Resources, Inc. estimated a total inferred resource of 420,000 Au Eq oz , hosted within 1,560,000 tonnes , which equates to a gold equivalent grade of 8.4 g/t, however individual gold and silver grades were not reported [Source: Company press release dated 10 March 2022] Element79 is not treating this historic estimate as current mi neral resources and a qualified person has not reviewed the work to define the quality of work associated with this historic estimate. As a result, there is no NI 43 - 101 compliant mineral resource estimate for Machacala property at the moment Element79 is pursu ing w orks related to geochemical surface data and conducting small scale drilling program to validate and re - assess the data in order to obtain updated MRE [Source: Company Management]. Title. In March 2022, Element79 has signed a letter of intent with Calipuy Resources Inc. to acquire Machacala and Lucero property, both owned by Calipuy Resources Inc. A definite agreement, pursuant to which Element79 shall acquire all of the issued and outstanding securities of Calipuy Resources Inc. and all of its assets and undertakings, is expected to be executed during 3Q2022 On closing of th is transaction, Element79 shall issue common shares to Calipuy Resources Inc. 's shareholders having an aggregate deemed value of USD 15 ,000,000 at an issue price of CAD1.07 per share Cashflow generation Element79 intends to gradually bring Machacala to cashflow generating stage within 6 - 12 months from acquisition by re - establishing artisanal production using offtake/royalty agreements and reworking the tailings in place. Machacala includes 200,000 tonnes of historic, non - NI 43 - 101 compliant tailings, which were estimated in 1997 by Gold Hawk to contain grades of 1.26 g/t Au and 74 g/t Ag [Source: Company press release date 17 March 2022] Description. The Snowbird High - Grade Gold Project (Snowbird) consists of 2,726 hectares across ten mineral claims located in Central British Columbia approximately 20 k m west of Fort St. James. The claims sit at low elevation with access via dirt roads that allows them to be drilled year - round. Exploration First discovered in the 1920s, Snowbird's original owners underwent limited underground development in the 1930s and 1940s A total of 226 shallow drill holes (both percussion and diamond) representing 19,580 m have been completed, the bulk of which occurred in the 1980s, with a total of 40 diamond drill holes (6,993 m ) drilled since 201 7. The Snowbird project includes two significant mineralized veins - the Main Vein and the Peg - leg Vein. Underground sampling on the Main Vein in the 1940s produced weighted averages of 10.5 g/t (cut to 30 g/t) and 357.7 g/t (uncut) ove r 0.6 meters with an individual sample up to 5,074 g/t. Historical trench sampling along 66 m of the Peg - leg vein yielded gold assay values of 13.03 g/t across an average width of 0.8 m [Source: Company press release dated 25 August 2021] Geology. The Snowbird’s mineralized system is interpreted to be mesothermal (orogenic) system with geology that is analogous to the famed Mother Lode District of California, and the Bralorne Mine Complex of British Columbia. It also holds similarities to deposits in several other significant mining camps, including the Timmins Camp in the Abitibi Subprovince of Ontario which has produced over 70 Au Moz to date [ Source: Company press release dated 25 August 2021] Unlike shallow epithermal deposits, mesothermal deposits can have significant depth continuity extending to several kilometr e s. The gold system at the Snowbird project has only been tested to a maximum depth of 400 m (one hole) with the vast majority of the past drilling being shallower than 200 m Gold mineralization is hosted by stockwork quartz carbonate veins associated with fuchsite, pyrite, stibnite and arsenopyrite along the sheared contact between alter ed ultramafics and metasediments. The alteration associated with the sheared contact forms a magnetic low, which allows for delineation of the favourable contact using detailed magnetic surveys [Source: Company press release dated 25 August 2021] Mineral Resource Estimate. Currently there is no NI 43 - 101 compliant mineral resource estimate for the Snowbird project. Title On 25 August 2021, Element79 signed a binding l etter of i ntent to acquire 100% of the issued and outstanding shares in Plutus Gold Corp. for a USD 200,000 cash payment, and issuance of 8,000,000 of Element79’s common shares. Plutus Gold Corp. holds the option to acquire the Snowbird project from Gitennes Exploration Ltd. In order to exercis e its option to acquire the claims, Plutus Gold Corp. shall complet e further exploration work s on the Snowbird with expenditures total l ing USD 1,000,000 by 30 June 2022. E lement79 ha s finance d Plutus Gold Corp. 's d rill p rogram via a drawable loan facilit y up to CAD 1,100,000 in order to facilitate the fulfilment of Plutus Gold Corp. 's final obligations remaining under the o ption a greement between Plutus Gold Corp. and Gitennes Exploration Ltd. Drilling program. Plutus Gold Corp. has conducted its d rill p rogram on the Snowbird p roject in 2021. The work program include d a minimum of 3,000 m of drilling test ing of the Snowbird p roject mineralized system below 400 m vertical depth (i.e. below the ma ximum depth to which it has been tested to date). Upcoming catalysts. NI 43 - 101 compliant technical report is currently being prepared by Axiom Exploration Group Inc., incorporating the results of the drilling program as well as the historic data available. U pon closing the Snowbird Project acquisition , Element79 plans to conduct significant a dditional d rilling (10,000 – 20,000 m ), with aim to advance th is project to a NI 43 - 101 compliant resource stage [Source: Company press release dated 27 October 2021] Description. Dale property is an early - exploration project located approximately 100 km southwest of Timmins, Ontario, in the Porcupine Mining District, Dale Township. It is comprised of 90 unpatented single cell and boundary cell mining claims totalling approximately 1, 980 hectares [Source: Company prospectus dated 19 July 2021, p. 16 , Company press release dated 12 January 2022 ] Dale can be accessed year - round by air usi ng a float plane with skis or a combination of trucks, boat, all - terrain vehicle, or snow machine. Exploration work could be carried out year - round [Source: Company prospectus dated 19 July 2021, p. 16] The mineralization present on the Dale property is associated with zones of strong silicification and disseminated pyrite, which Element79 believes are prospective for bulk tonnage style gold mineralization. Historically, the property has yielded up to 3.8 2 g/t gold, including several highly anomalous samples grading greater than 0.1 g/t gold [Source: Company press release dated 12 January 2022]. Title. From 1968 to June 2012 the Dale p roperty was part of a 5 - township freehold mining patent that belonged to Algoma Eastern Railways (Algoma - Talisman Minerals Limited). On 1 June 2012, the ground opened for staking and was acquired by Keystone Associates. On 1 February 2013 Keystone entered an agreement to sell the claims to Mr. Jean Marc Gaudreau , who currently owns all 90 mining claims forming Dale property. Element79 has an option to acquire a 100% interest in the mining claims from Mr. Gaudreau, for (1) cash payment s amounting to USD 127,000 payable in tranches over four years (2) payment of 200,001 common shares of Element79 at a deemed price of USD 0.05 , (3) subsequent share payments totalling USD 192,000 and (4) a NSR royalty agreement equal to 0.5% [Source: Compan y prospectus dated 19 July 2021, p. 16] As of 31 May 2022 , the claims are in good standing [Source: Company Management] NSR. Currently, there is a total net smelter return (NSR) royalty of 1 5 % to be payable to two entities. Firstly, a 1% NSR royalty had been granted to the benefit of Keystone Associates Inc. before an option agreement between Mr. Jean Marc Gaudreau and Element7 9 was concluded. Secondly, there is a 0.5% NSR royalty payable to Mr. Jean Marc Gaudreau, which is part of Element79’s option to purchase. Mineral resource estimate. The Property is an early - stage exploration property. Currently there is no NI 43 - 101 compliant mineral resource estimate for Dale property. Work program. In 2021 Element79 completed a high - resolution drone - based magnetic survey. Works covered during the Phase 1 exploration program included trenching, channel sampling, mapping and soil sampling and finally lab testing samples for gold and silver inclusions [Source: Company press release dated 15 December 2021] Based on the 2021 assays results, the Company intends to explore further before it initiates the Phase 2 work program (including 1,500m of diamond drilling) as recommended within the NI 43 - 101 Technical Report prepared by SGS Canada Inc. [Source: Company press release dated 12 January 2022 and Company Management ] Cote Gold Project Situated 45 k m south of the Dale p roperty , IAMGOLD’s Cote Gold Project’s commercial production shall start in 2 H 2023. Total measured and indicated resources of Cote Gold Project amount to 13. 55 Au Moz with average grade of 0.86 g/t. Total proven and probable reserves amount to 7.19 Au Moz with average grade 0.96 g/t [Source: Company press release dated 3 August 2021, www.iamgold.com ] Description. The Battle Mountain Portfolio is located within the Battle Mountain Trend in the gold mining region of north - eastern Nevada in close proximity to globally reputable gold deposits including Nevada Gold's Cortez M ine The portfolio is comprised of 15 greenfield, separate early - stage exploration projects that total over 44,478 acres across 2,203 unpatented claims in five counties: Elko County, Eureka County, Humboldt County, Lander County, and Nye County [Source: Company press release dated 23 December 2021 and Company c orporate p resentation for 2Q2022 ] Exploration. While drilling has been completed at some p rojects, such as Elder Creek (155 holes , 3.19 g/t Au over 38.96 m ) , Clover (104 holes , 25.3 g/t Au over 9.75 m ) and Long Peak (8.02 g/t Au and 174 g/t Ag over 9.14 m ), many have only surface samplin g and geophysical surveys completed. Mineral resource estimate. The 15 propert ies are all in an early - stage exploration phase Currently there is no NI 43 - 101 compliant mineral resource estimate for Battle Mountain portfolio. Title. Element79 has acquired the Battle Mountain portfolio together with Maverick Springs in December 2021 through its acquisition of 1316524 B.C. LLC. Details of this transaction are described in section 7 (Attachm ent) of this report. Upcoming catalysts Given the diversity of this portfolio, Element79 has stratified the Battle Mountain package into three tiers of properties based on the level of their current development and economic potential [Source: Company corporate presentation for 2Q2022 ]. Moreover, the portfolio is being reviewed for the projects' potential t o be developed in - house, joint - venturing, sale to third - parties or become properties of merit (alone or in smaller groups) for spin - out. [Source: Company corporate presentation for 2Q2022 ]. We base our approach on relative valuation method. Out of group of junior gold exploration companies, we have selected a relevant peer group based on asset class comparable to Element79’ s E ligibility criteria have been derived from the Maverick Springs Project and defined as existence of and title to asset with a NI 43 - 101 - compliant mineral resource estimate in the inferred category. C urrent MRE of Maverick Springs has been classified as inferred resources of 1.37 Au Moz at an average grade of 0.34 g/t and 175.7 Ag Moz at an average grade of 43.5 g/ t within 125,421,000 tonnes Using LME prices of 1 June 2022, inferred resources amount to 3.4 5 AuEq Moz at an average grade of 0.88 AuEq. The peer group consists of 10 junior exploration companies focusing primarily on gold and operating in the same regions/countries as Element79 , all wi th m ineral resource estimate in inferred resource category, as c onfirmed by the latest available NI 43 - 101 technical report Peers from other countries are used to justify the value of the asset class. T he target price per share is based on the Enterprise Value / Gold Equivalent Inferred Resource s Estimate (EV/AuEq IRE) calculation. Chart 1: Peer group Enterprise Value / AuEq IRE, CAD/oz Chart 2: Peer group AuEq Grades and IRE Taking into consideration AuEq estimates of the peer group, Element79 is currently trading at CAD 10. 2 /AuEq oz with a 6 6 % discount compared to its market peer’s median of CAD 30 3 /AuEq oz, implying an upside potential of 1 97 % from the current price of CAD 0.6 5 Based on the EV/AuEq IRE calculation, the target price for Element79 for next 12 months is CAD 1. 93 per share. Given that Element79 is a junior exploration company, there are certain risk factors associated with an investment in the Company’s securities. In reviewing this report, an investor should carefully consider the matters described under th e heading Risk Factors. An investment in the Company should be considered highly speculative and is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment. Sources: Company information, Toronto Stock Exchange, Canadian Securities Exchange, London Metal Exchange, KNA estimates, latest NI 43 - 101 reports related to the pears (listed in section 5 Sources of this report). AuEq : The calculation of AuEq is based on the LME prices as of 1 June 2022: Gold USD 1,845.8/oz, Silver USD 21.85/oz, Copper USD 9,504.5/t, Cobalt USD 73,636/t Element79 Gold Corp. versus junior gold exploration peers Shares outstanding Last price 01.06.2022 Market capitalization Cash Debt EV Resources (Inferred) Resources (Inferred) Gold grade Silver grade EV/AuEq* IRE M CAD/share CADM CADM CADM CADM Au, Koz AuEq, Koz g/t g/t CAD/oz Element79 Gold Corp. British Columbia, Canada Nevada, USA Peru CSE:ELEM FRA:7YS 53.7 0.65 34.9 0.0 0.4 35.2 1,370 3,450 0.34 43.50 10.2 Gold peers with inferred reserves Millennial Precious Metals Corp. Nevada, USA TSXV:MPM 138.6 0.39 54.1 7.8 0.7 46.9 1,203 1,305 0.45 3.18 36.0 Mawson Gold Limited Finland, Sweden TSX:MAW FRA:MXR 293.6 0.17 49.9 8.8 0.0 41.1 887 1,080 2.50 NA 38.0 Newcore Gold Ltd. Ghana, Africa TSXV:NCAU FRA:PI8 121.4 0.37 44.9 0.7 0.0 44.2 1,415 1,415 0.62 NA 31.3 Cassiar Gold Corp. British Columbia, Canada TSXV:GLDC FRA:756 66.7 0.67 44.7 3.9 0.0 40.8 1,390 1,390 1.14 NA 29.4 Gold Terra Resource Corp. Northwest Territories, Canada TSXV:YGT FRA:TX0 196.5 0.19 37.3 4.8 0.0 32.5 1,207 1,207 1.54 NA 26.9 Allegiant Gold Ltd. Nevada, USA TSXV:AUAU 102.3 0.34 34.8 7.2 0.1 27.6 1,404 1,507 0.53 4.40 18.3 Chakana Copper Corp. Ancash, Peru TSXV:PERU FRA:1ZX 157.7 0.15 22.9 1.7 0.2 21.4 190 635 0.88 54.29 33.8 Greenhawk Resources Inc. Nuukfjord, Greenland CSE:GRHK FRA:2V70 86.2 0.12 9.9 5.4 0.0 4.5 95 95 3.40 NA 47.6 West Red Lake Gold Mines Inc. Ontario, Canada CSE:RLG FRA:HYK 194.7 0.05 9.7 0.3 0.0 9.5 751 751 7.57 NA 12.7 Independence Gold Corp. British Columbia, Yukon, Canada TSXV:IGO 104.4 0.08 8.4 1.3 0.6 7.6 441 589 2.52 71.53 13.0 Gold peers with inferred reserves, median 30.3 to Gold peers with inferred reserves (66%) Element79 Gold Corp. upside vs. Gold peers with inferred reserves 197% Element79 Gold Corp. target price Target price implied by multiples of Gold peers with inferred reserves, CAD 1.93 Current price, CAD 0.65 Upside 197% Element79 Gold Corp. premium / (discount) Company Main exploration areas Ticker Element79 is an early - stage exploration company, and its properties are in exploration stage. An investment into exploration companies should be considered highly speculative as it involves risks and uncertainties, many of which are beyond control of these companies. Investors may incur loss on their investment since f ew properties that are explored are subsequently developed and ultimately brought into commercially viable production phase. The factors below do not represent a compl ete list of risks related to the Company. Additional risks and uncertainties presently not known or currently deemed immaterial, may also impair Element79’s operations. The Company has listed potential risk factors in its prospectus which is available under the Company’s profile on SEDAR at www.sedar.com The Company is focused on the acquisition, exploration and development of the properties . The Company has not defined or delineated any mineral resource or reserve on any of its properties yet , with exe m ption of Maverick Springs which has identified resources in inferred category. Ex ploration is commonly the longest and riskiest part of the road to establish a gold mine. There is no assurance that further mineral resources will be identified during exploration process, nor that the C ompany will be able to convert the current min eral resource into commercially minable reserves which can be legally and economically exploited. Moreover, current mineralization estimates for the Company’s properties may require adjustments or downward revisions based upon further exploration or develo pment work or actual production experience. The commercial viability of a minable reserves is dependent upon a number of factors, some of which are the particular attributes of the mineral deposit (such as size, grade and proximity to infrastructure), me tal prices and government regulations, including regulations relating to roya