Earn-in agreement with Hochschild Mining
Located in Sonora
Sarape is located within the Rio Sonora valley near Premier Gold’s Mercedes mine, First Majestic’s Santa Elena mine and First Majestic’s Ermitaño Project.
Orogen has optioned the Sarape gold property in Sonora, Mexico to Minera Hochschild Mexico, S.A. de C.V., a subsidiary of Hochschild Mining.
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.
About the Project
Sarape was identified through Orogen’s generative program in the Rio Sonora valley in early 2017 following the discovery of a high-grade gold-silver ore shoot on the Ermitaño vein. The project is 100% owned by Orogen with no underlying royalties and is located near excellent infrastructure with roads and power crossing the 5,776-hectare property. Sarape is currently under an earn-in agreement with Hoschild Mining. 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. Further information about the earn-in agreement can be found on Orogen’s news release from August 27, 2020.
The Sarape Project is a 57 square-kilometre land package covering quartz-carbonate veins with high-level epithermal features developed on the margins of a horst. The Sarape vein, which varies in width from 3 to 12 metres, has been mapped and sampled over a strike length of five kilometres. The Chiltepin vein, which averages 3 metres in width on surface, has been traced over a strike length of 2.5 kilometres. Both veins display high-level epithermal features and elevated gold-silver values.
Coeur Mining completed a drill program in 2019 to test a range of elevations over 380 metres of strike length on the Sarape Vein. Drill results outlined a zone of brecciation and tan-green quartz development with subeconomic gold-silver values at approximately 150-200 metres below surface. More than 3 kilometres of the Sarape vein and over 2 kilometres of the Chiltepin vein remain untested by drilling.
Drill preparations are being initiated at the Sarape project. Hochschild has proposed an oriented core drill program for budget preparation and planning. The program is scheduled to begin in late February. Field visits have been completed with drill contractors and bids and budgeting are in progress. One hundred and fourteen metres of core were scanned and 10 samples were collected for fluid inclusions from the previous Coeur drilling. This data will improve our understanding of the temperature and pressure characteristics of the vein pulses intercepted to date and help refine the 2021 drill targeting.