Orogen holds 2% NSR royalty
Owned by First Majestic Silver Corp.
First Majestic Silver Corp. completed its 100% earn-in for the project in September 2018, with US$1.5 million cash payment for a net smelter return (“NSR”) royalty for both Ermitaño (2% NSR) and Cumobabi (1.5% NSR) projects. During the option agreement, First Majestic paid US$75,000 upon signing the Agreement and US$50,000 each anniversary thereafter, completing over US$500,000 in exploration expenditures in the first year, and delivering a Production Notice specifying mine and construction plans with accompanying permits.
The Ermitaño Property consists of 165 square kilometres of contiguous mineral tenure located approximately 145 kilometres from Hermosillo and only 3.5 kilometres southeast of First Majestic’s Santa Elena gold-silver mine in Sonora, Mexico. Access to the property is by paved highway and secondary roads. The current indicated resource is 2,107,000 tonnes averaging 4.59 grams per tonne (“g/t”) gold and 70 g/t silver for 311,000 ounces of contained gold and 4.73 million ounces of contained silver1,2. The inferred resource is 3,733,000 tonnes averaging 3.08 g/t gold and 58 g/t silver for 370,000 ounces of contained gold and 6.98 million ounces of contained silver
First Majestic has announced plans to invest US$29.1 million in mine development, mine equipment and materials handling (3) The company also plans to drill approximately 15,000 metres in 50 drill holes. This drilling will focus on infill of the main resource area, including resource expansion in the eastern Ermitaño vein area, the Aitana vein, and several nearby newly identified targets.
At the end of the second quarter of 2020, a total of 468 metres of underground development had been completed. A news release from First Majestic from July 15, 2020 stated that approximately 480 metres of the main ramp and 80 metres of the lateral development remained to be developed in order to access the high-grade portion of the Ermitaño ore body (4).
First Majestic announced on the same news release that due to the temporary suspension of activities in the second quarter of 2020 caused by COVID-19, the Ermitaño pre-feasibility study is expected to be completed in the first half of 2021 and initial production from Ermitaño is planned for mid-2021.
1 Information announced by First Majestic on March 30, 2020
2 Metal prices used by First Majestic for mineral resource estimates were US$18.50/oz silver and US$1,450/oz gold
3 See First Majestic’s Annual Information Form filed on March 30, 2020
4 First Majestic news release July 15, 2020