Developer Elemental Royalty announced the signing of an option agreement with First Quantum Minerals to transfer 100% of the rights to the Hachita project, located in southwestern New Mexico. The agreement includes upfront payments, NSR royalties and exploration commitments that consolidate its long-term growth strategy.
The structured settlement and the participation of the Hachita project
Under the terms of the agreement, First Quantum will be required to pay US$800,000 in staged payments over five years, in addition to exploration commitments of US$6 million. For its part, Elemental will maintain a 3% net smelter royalty on the project, with the possibility of a partial repurchase for $5 million within five years of resource declaration.
The Hachita project is located within the Sylvanite mining district, a historically underexplored area of the Laramide belt. Two main targets have been identified: a
The transaction aligns with Elemental’s focus on generating early stage royalty assets. By structuring farm-out agreements with operating companies such as First Quantum, the company secures future revenues through milestone payments, anticipated cash flows and production sharing. This allows it to expand its portfolio without directly incurring exploration expenditures.
The project is ready to enter a formal exploration campaign led by First Quantum. Geophysical data and shallow alteration zoning indicate the potential for deep mineralization. potential for deep mineralization in both the porphyry system and associated skarns . A final decision on development will depend on the results obtained over the next few years.
This type of transaction allows us to continue building a diversified portfolio, with quality assets and without committing our own capital to exploration.
David Cole, CEO of Elemental Royalty
Source and photo: Elemental Royalty