Orvana enters definitive deal to reacquire Taguas NSR

Executive Summary

• Orvana Minerals Corp. has entered into a definitive agreement to repurchase a 1% Net Smelter Return (NSR) royalty on its Taguas property in Argentina from related party Compania Minera Taguas S.A.
• The transaction reduces the total third-party royalty burden on the Taguas property from 2.5% to 1.5%, aiming to improve project economics, cash flows, and net present value.
• The purchase price is $5.6 million (U.S.), payable in installments through October 2028, with the transfer of interest becoming effective upon the completion of the first $1.4 million installment expected by October 31, 2025.

Key Details

• Transaction Structure: Orvana repurchases 1% of the 2.5% NSR previously granted to Compania Minera Taguas S.A. in 2021. Orvana retains a 1% NSR, while Compania Taguas retains the remaining 1.5% NSR. Orvana’s subsidiary, Orvana Argentina SA, continues to own 100% of the Taguas property.
• Financial Consideration: The total purchase price is $5.6 million (U.S.).
• Payment Schedule: Payments are made in installments through October 2028.
• Closing Conditions: The transfer of the 1% NSR interest becomes effective upon completion of the first $1.4 million (U.S.) installment, expected by October 31, 2025. Until full payment, Compania Taguas maintains a security interest in the transferred NSR.
• Strategic Rationale:
  • Improves project economics by reducing royalty obligations from 2.5% to 1.5%.
  • Enhances flexibility for potential partners, joint ventures, or project debt structures.
  • Maintains a direct financial interest in the project's upside while keeping strategic options open.
• Regulatory & Governance:
  • The transaction is a related party transaction as Minera S.A. owns both Compania Taguas and Fabulosa Mines Ltd. (which owns 51.9% of Orvana).
  • Orvana was exempt from formal valuation and minority shareholder approval under Multilateral Instrument 61-101 as consideration did not exceed 25% of market capitalization.
  • An independent valuation was obtained to comply with Toronto Stock Exchange (TSX) requirements for related party transactions exceeding 2% of market capitalization.
  • The TSX has provided conditional acceptance of the transaction.
• Operational Context:
  • The Taguas property consists of 15 mining concessions covering 3,273.87 hectares in San Juan province, Argentina.
  • Orvana is preparing for a geophysical survey and deep drilling program to test gold-copper porphyry potential.
  • Next phase of exploration includes geological modeling and geophysical surveys to identify targets up to 1,500 meters deep, with deep exploration drilling expected to commence in 2026.

Notable Quotes

• "This transaction reflects our commitment to optimizing long-term value from Taguas as we continue to reposition the project toward a larger-scale copper-gold opportunity," said Juan Gavidia, chief executive officer of Orvana. "Our exploration team is preparing for a geophysical survey and deep drilling program that will test the property's gold-copper porphyry potential."