Orogen options the Sarape gold project to Hochschild Sarape gold project optioned to Hochschild Mining for a net smelter return royalty, cash, and exploration expenses
Orogen options the Sarape gold project to
Hochschild
Sarape gold project optioned to Hochschild Mining for a net smelter return
royalty, cash, and
exploration expenses
VANCOUVER, BC
,
Aug. 27, 2020
/CNW/ - (TSXV: OGN) Orogen Royalties Inc. ("Orogen" or the
"Company") is pleased to announce it has optioned the Sarape gold property in
Sonora, Mexico
to
Minera Hochschild Mexico, S.A. de C.V., a subsidiary of Hochschild Mining PLC ("Hochschild").
Hochschild can earn a 100% interest in the Sarape project by making cash payments of
US$5.35
million
and completing expenditures of
US$5.0 million
over a five-year period. Upon exercise of the
option, Hochschild will grant to Orogen a 3% net smelter return royalty ("NSR") of which 1% can be
purchased for
US$2.0 million
.
"This transaction with Hochschild demonstrates Orogen's ability to develop a quality portfolio of
organically created royalty assets in a cost-effective manner," commented Orogen CEO
Paddy
Nicol
. "Hochschild has considerable experience in the Americas and we welcome their expertise in
advancing exploration on Orogen's Sarape gold project. The Sarape project is a low sulphidation
epithermal gold target located in the same valley as Premier Gold's Mercedes mine, SilverCrest's
Las Chispas project and First Majestic's
Santa Elena
and Ermitaño mines."
Under the terms of the agreement Hochschild can earn a 100% interest in the Sarape project over a
five-year period subject to the following terms:
Cash and Work expenditures
Cash Payments ($US)
Cumulative Exploration
Expenditures ($US)
On signing
$50,000
-
12 months from signing
$50,000
-
18 months from signing
-
$500,000
24 months from signing
$50,000
-
36 months from signing
$100,000
$2,000,000
48 months from signing
$100,000
$3,000,000
60 months from signing
$5,000,000
$5,000,000
Once Hochschild has earned a 100% interest in the Sarape project, it will grant to Orogen a 3%
NSR of which 1% can be purchased for
US$2.0 million
. Hochschild will also make annual advance
cash payments of
US$50,000
to be set off against the 1% royalty buy-back. Orogen will be the
operator for the first three years of the agreement.
About the Sarape project
Sarape is a gold-silver epithermal vein prospect located in the Rio Sonora valley of northern
Mexico
,
an emerging gold-silver mining district that includes First Majestic Silver's
Santa Elena
mine and
Ermitaño gold-silver development project, Premier Gold Mines' Mercedes mine and SilverCrest
Metals' Las Chispas project. Orogen (Evrim) staked Sarape in 2017 following First Majestic's initial
discovery of bonanza gold-silver grades at Ermitaño. The 53 square kilometre Sarape property
covers two prominent quartz-carbonate veins with high-level epithermal geochemistry and vein
textures: the six-kilometre long Sarape vein and the 2.6 kilometre-long Chiltepin vein. Initial mapping
and sampling identified tan-green quartz with elevated gold-silver values on the eastern limits of the
exposed veins suggesting proximity to a boiling zone with bonanza gold-silver values at depth.
A previous exploration partner optioned Sarape from Orogen (Evrim) in 2018 and completed eight
drill holes testing a 380-metre-long section of the Sarape vein and an additional drill hole on the
eastern extremity of the Chiltepin vein. The Sarape drill holes intersected vein textures, gold-silver
values, pathfinder elements and vein widths up 23 metres indicative of a boiling horizon in a dilation
zone between 100 and 350 metres below surface. Only three holes are interpreted to have tested
this target level over a strike length of 150 metres. The single hole on the Chiltepin vein failed to
intersect the vein at depth. The balance of the six-kilometre Sarape vein, including areas of
anomalous pathfinder geochemistry and vein splays and flexures, remains untested as does the
entire 2.6 kilometre-long Chiltepin vein. Recent work has also identified a fault scarp with veining in
the projected intersection of the Sarape and Chiltepin veins 1.5 kilometres east of the exposed
veins.
Figure 1 – Geologic map of the Sarape project showing the extent of the Sarape and Chiltepin veins,
surface gold values in rock-chip samples and location of previous drilling. (CNW Group/Orogen
Royalties Inc.)
Qualified Person Statement
Orogen's disclosure of technical and scientific information in this news release has been reviewed by
Dave Groves
, Vice President, Exploration for Orogen. Mr. Groves is a Certified Professional
Geologist (#11456) with the American Institute of Professional Geologists and a Qualified Person
under the definition of National Instrument 43-101.
About Orogen Royalties
Orogen Royalties Inc. is focused on precious and base metals project generation and royalty
creation in western North America. Orogen'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, USA
, being advanced by AngloGold Ashanti, NA. The Company is
well financed with several additional projects under active joint ventures and alliances.
On Behalf of the Board
OROGEN ROYALTIES INC.
Paddy Nicol
President & CEO
Orogen Royalties Inc.
1201 - 510 West Hastings Street
Vancouver, BC
Canada
V6B 1L8
Forward Looking Information
This news release includes certain statements that may be deemed "forward looking statements".
All statements in this presentation, other than statements of historical facts, that address events or
developments that Orogen Royalties Inc. (the "Company") expect to occur, are forward looking
statements. Forward looking statements are statements that are not historical facts and are
generally, but not always, identified by the words "expects", "plans", "anticipates", "believes",
"intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions
"will", "would", "may", "could" or "should" occur.
Forward looking information relates to statements concerning the Company's future outlook and
anticipated events or results, as well as the Company's management expectations with respect to
the proposed business combination (the "Transaction"). This document also contains forward-looking
statements regarding the anticipated completion of the Transaction and timing thereof. Forward-
looking statements in this document are based on certain key expectations and assumptions made
by the Company, including expectations and assumptions concerning the receipt, in a timely manner,
of regulatory and stock exchange approvals in respect of the Transaction.
Although the Company believe the expectations expressed in such forward looking statements are
based on reasonable assumptions, such statements are not guarantees of future performance and
actual results may differ materially from those in the forward looking statements. Factors that could
cause the actual results to differ materially from those in forward looking statements include market
prices, exploitation and exploration successes, and continued availability of capital and financing, and
general economic, market or business conditions. Furthermore, the extent to which COVID-19 may
impact the Company's business will depend on future developments such as the geographic spread
of the disease, the duration of the outbreak, travel restrictions, physical distancing, business
closures or business disruptions, and the effectiveness of actions taken in
Canada
and other
countries to contain and treat the disease. Although it is not possible to reliably estimate the length
or severity of these developments and their financial impact as of the date of approval of these
condensed interim consolidated financial statements, continuation of the prevailing conditions could
have a significant adverse impact on the Company's financial position and results of operations for
future periods.
Investors are cautioned that any such statements are not guarantees of future performance and
actual results or developments may differ materially from those projected in the forward looking
statements. Forward looking statements are based on the beliefs, estimates and opinions of the
Company's management on the date the statements are made. Except as required by securities
laws, the Company undertakes no obligation to update these forward looking statements in the event
that management's beliefs, estimates or opinions, or other factors, should change.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
SOURCE
Orogen Royalties Inc.
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For further information:
To find out more about Orogen, please contact Paddy Nicol, President &
CEO at 604-248-8648, and Liliana Wong, Manager of Marketing and Investor Relations at 604-248-
8648. Visit our website at www.orogenroyalties.com.
CO: Orogen Royalties Inc.
CNW 07:00e 27-AUG-20