Orogen Resources Inc (CVE:OGN) has optioned the Sarape gold property in Sonora, Mexico to a subsidiary of Hochschild Mining PLC, the company announced Thursday.
Minera Hochschild Mexico SA de CV, the subsidiary, can earn a 100% interest in the project by paying US$5.35 million and completing additional expenditures of US$5 million over a five-year period.
When the option is exercised, Hochschild will grant Orogen a 3% net smelter return royalty (NSR), of which 1% can be purchased for US$2 million.
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"This transaction with Hochschild demonstrates Orogen's ability to develop a quality portfolio of organically created royalty assets in a cost-effective manner," Orogen CEO Paddy Nicol said in a statement. "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, Nicol added.
Orogen, based in Vancouver, is focused on precious and base metals project generation and royalty creation in western North America. The company’s royalty portfolio includes the Ermitaño West gold deposit in Sonora, Mexico (2% NSR) being developed by First Majestic Silver Corp and the Silicon gold project (1% NSR) in Nevada being advanced by AngloGold Ashanti, NA.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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