[caption id="attachment_1003741418" align="alignnone" width="550"]
Drilling at First Majestic Silver's Ermitano project in Mexico. First Majestic Silver[/caption]
has announced its first deal since the formation of the company this month – a US$10.4-million option agreement with Hochschild Mining
The agreement will see Hochschild earn up to 100% of the Sarape gold project in Sonora, Mexico, by paying US$5.35 million in cash and spending US$5 million on exploration over five years.
Sarape is a 53-sq.-km gold-silver epithermal vein prospect in an emerging gold-silver district in the Rio Sonora Valley of northern Mexico that hosts First Majestic Silver
's Elena mine and Ermitano project, SilverCrest Metals
' Las Chispas project, and Premier Gold Mines
' Mercedes mine.
“This transaction with Hochschild demonstrates Orogen’s ability to develop a quality portfolio of organically created royalty assets in a cost-effective manner,” said Orogen CEO Paddy Nicol in a release. “Hochschild has considerable experience in the Americas and we welcome their expertise in advancing exploration on Orogen’s Sarape gold project.”
Orogen will be the project operator for the first three years of the agreement. The Vancouver-based junior was formed through the merger of Renaissance Gold and Evrim Resources, and listed on the TSX Venture Exchange on Aug. 18.
Once Hochschild has earned 100% of Sarape, Orogen will be granted a 3% NSR (net smelter return) royalty, 1% of which can be purchased by Hochschild for US$2 million.
The Sarape property hosts two prospective, prominent quartz-carbonate veins: the 6-km-long Sarape vein and the 2.6-km-long Chiltepin vein.
An eight-hole drill program conducted by Evrim Resources' previous JV partner in 2018 intersected vein textures, gold-silver values and vein widths up to 23 metres at depths of 100 to 350 metres.
Orogen also holds a 2% NSR royalty on Ermitano, where First Majestic is working on a prefeasibility study, expected early next year.
for more information.