The Sarape gold-silver project is located in the Rio Sonora valley of northern Mexico, an emerging gold-silver mining district
Canada-based Orogen Royalties has optioned the Sarape gold property in Sonora, Mexico to Hochschild Mining subsidiary Minera Hochschild Mexico, for a net smelter return royalty, cash, and exploration expenses.
The Sarape gold-silver project is located in the Rio Sonora valley of northern Mexico, an emerging gold-silver mining district.
Hochschild will have the option to acquire a 100% stake in the Sarape project by paying $5.35m and complete a $5m investment over a five-year period.
Hochschild to grant 3% net smelter return royalty to Orogen
Hochschild, upon exercising the option, will grant a 3% net smelter return royalty (NSR) to Orogen, of which 1% can be purchased for $2m.
Orogen CEO Paddy Nicol said: “This transaction with Hochschild demonstrates Orogen’s ability to develop a quality portfolio of organically created royalty assets in a cost-effective manner.
“Hochschild has considerable experience in the Americas and we welcome their expertise in advancing exploration on Orogen’s Sarape gold project.
“The Sarape project is a low sulphidation epithermal gold target located in the same valley as Premier Gold’s Mercedes mine, SilverCrest’s Las Chispas project and First Majestic’s Santa Elena and Ermitaño mines.”
Additionally, Hochschild will make $50,000 in annual advance cash payments against the 1% royalty buy-back.
For the first three years of the agreement, Orogen will serve as the operator of the project.
Sarape prospect is located in the same valley as Premier Gold’s Mercedes mine, SilverCrest’s Las Chispas project and First Majestic’s Santa Elena and Ermitaño mines.
Orogen Royalties is focused on precious and base metals project generation as well as royalty creation in western North America.
Its royalty portfolio includes the Ermitaño West gold deposit in Sonora, Mexico (2% NSR) which is being developed by First Majestic Silver and the AngloGold Ashanti’s Silicon gold project (1% NSR) in Nevada, US.