Junior explorer Regulus Resources Inc (TSX-V:REG) shares are trending higher on a US$5 million investment from Osisko Gold Royalties (TSX:OR) for a net smelter return ranging from 0.125% to 1.5% on certain claims of its AntaKori copper-gold-silver project in northern Peru.
The investment is the second completed by Osisko on the AntaKori project following a strategic partnership between Regulus and Osisko announced in October 2020, and it includes a right (currently held by Regulus) to buy back a 1% net smelter return from a third party on certain claims of AntaKori.
Shares of the Vancouver-based resource company were up nearly 8% on Friday following the news.
WATCH: Regulus Resources well funded to resume Peru-based copper project drill program in the next few days
Regulus CEO John Black called Osisko’s support “a strong endorsement” of AntaKori.
“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,” Black said in a statement.
The next major milestone for the project will be a decision on the Colquirrumi earn-in claims whereby Regulus can earn up to a 70% interest from Buenaventura by completing 7,500 metres of drilling, Black told shareholders.
Buenaventura can then decide whether to give Regulus a 70% interest in the claims or pay Regulus US$9 million and give Regulus a 30% interest in the claims, with Buenaventura retaining a 70% interest.
Black added that Regulus plans to complete the 7,500 metres of drilling in October and expects a decision from Buenaventura in the first quarter of 2023.
The firm is targeting a resource update to be out by mid-2023.
Contact Angela at angela@proactiveinvestors.com
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