Regulus Resources (TSXV: REG; OTC: RGLSF) has secured a US$5 million investment from Osisko Gold Royalties in exchange for a net smelter return (NSR) ranging from 0.125% to 1.5% on certain claims of the company’s AntaKori project, as well as a right (currently held by Regulus) to buy back a 1% NSR from a third party on certain AntaKori claims.
AntaKori is a copper-gold-silver project located in the Yanacocha-Hualgayoc mining district of northern Peru. The deposit currently hosts indicated mineral resources of 250 million tonnes with a grade of 0.48% copper, 0.29 g/t gold and 7.5 g/t silver, plus inferred mineral resources of 267 million tonnes at 0.41% copper, 0.26 g/t gold and 7.8 g/t silver.
Proceeds from the investment will be used by Regulus for exploration activities at AntaKori. This investment represents the second completed by Osisko on the AntaKori project, the first being a strategic partnership between Regulus and Osisko announced on October 1, 2020.
“The continued support of Osisko is a strong endorsement of the AntaKori project. Given that equity markets are currently very challenging, we believe this transaction adds value to shareholders by avoiding equity dilution while providing Regulus with cash to continue to advance work programs at AntaKori,” stated Regulus CEO John Black.
As part of the US$5 million investment, Osisko will receive NSR on certain claims ranging from 0.125% to 1.5%, as well as a right to buy back a 1% NSR on the Maria Eugenia, Maria Eugenia No1 and Rita Margot claims for US$4.5 million. As per the strategic partnership, Osisko previously held the right to acquire half of the 1% NSR on these claims if Regulus had exercised its buyback right.
The next major milestone for the project, according to Regulus, will be a decision on the Colquirrumi claims, in which the company can earn up to 70% interest from Peruvian mining giant Buenaventura by completing 7,500 metres of drilling. Upon completing the 7,500 metres, Buenaventura can elect to either give Regulus a 70% interest in the claims or pay Regulus US$9 million and give up only a 30% interest in the claims, with Buenaventura retaining a 70% interest.
“We plan to complete the 7,500 metres of drilling in October and expect a decision from Buenaventura in Q1 2023,” Black continued. “With either a 70% or 30% interest, we retain the ability to layback onto these claims which will enable us to increase the size of the pit and thereby increase our resource base at AntaKori.
“With two drill rigs active on the project, we will continue drilling to expand the mineralized footprint of the project, with the target of completing a resource update around mid-2023.”