Vancouver, B.C. August 27,2020 (TSX-V: 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 PremierGold’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
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$2.0million. 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 2.6kilometre-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 150metres. 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.
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.
President & CEO
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.
Orogen Royalties Inc.
1201 - 510 West Hastings Street
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 there of. 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.