By James Kwantes
Published first at Patreon
The announcement today by NGEx Minerals (NGEX.T) of a royalty spinout is a testament to the recurring, lasting value that can be created out of a world-class district by smart operators.
Lunahuasi, NGEx's remarkable copper-gold-silver discovery, is rightfully the new centre of attention in the Vicuña district. But NGEx also owns 69% of the Los Helados porphyry deposit, which hosts a combined 26.6 billion pounds of copper, 13.8M ounces of gold and 147.7M oz of silver (Indicated & Inferred).
The new royalty spinout will include a 1% NSR royalty on Lunahuasi and a 1.38% NSR on Los Helados, representing NGEx's ownership share (31% owner Nippon Caserones Resources will have a 0.62% NSR, representing the rest of the overall 2% Los Helados NSR).
NGEx shareholders get 1/4 of a royalty spinco share for each NGEx share held.
Guts, Glory ... and Another Lundin Moonshot?
In the above piece, posted on July 12, 2023 with NGEx at about $6.80 a share, I did a value calculation on the spinouts that have emerged from the original NGEx, NGEx Resources.
On November 13, 2015, you could have purchased an NGEx Resources share for 47 cents. That 47-cent share has turned into one-quarter of a Filo share (@ $6.25), half a new NGEx share (@ $3.40) and $1.60 for the JOSE shares = $11.25. That’s an excellent return, especially considering Filo-Josemaria-NGEx Minerals have raised about $500 million along the way.
Fast-forward to today: that one-quarter of a Filo share is worth $8 and the half of a new NGEx share, $9.40 at the time of writing.
That 47-cent NGEx Resources share has turned into $19, not including the pending NGEx royalty spinco.
When it comes to the Lundins and the Vicuña district, it's best to keep a calculator handy.
Disclosure: I own shares of NGEx Minerals and added on news of the royalty spinco. No business relationship with any company mentioned.
