NGEx Minerals Advances with Royalties Spin-Out to Boost Shareholder Value

NGEx Minerals Ltd. (TSX: NGEX / OTCQX: NGXXF) has taken a key step in reshaping its asset structure by securing court approval for a planned spin-out of royalties from its flagship mining projects. The Supreme Court of British Columbia gave the green light to the transaction that will separate the net smelter return royalties from the Lunahuasi project in Argentina and the Los Helados project in Chile into a new wholly-owned subsidiary, LunR Royalties Corp. The move was approved by NGEx shareholders at a special meeting held on earlier in September, and is expected to close in the coming months.

The spin-out arrangement allows NGEx shareholders to retain their existing stake in NGEx while gaining direct exposure to the newly formed royalty vehicle. For every NGEx share held at the record date, shareholders will receive one new NGEx share and one-quarter of a share in LunR Royalties. Upon completion, NGEx expects to hold just under 20% of LunR Royalties, with the rest distributed among current NGEx shareholders on a pro-rata basis. This ensures shareholders benefit from both the ongoing exploration activities and the royalties representing future cash flows from mineral production. 

Lunahuasi and Los Helados are promising copper-gold-silver projects situated in a prolific mining district near the Caserones mine and several notable deposits. NGEx holds 100% ownership of Lunahuasi and is the majority partner and operator at Los Helados, the latter under a joint exploration agreement with Nippon Caserones Resources, which holds an indirect 30% interest in the nearby Caserones copper operation. This regional context supports the idea that the royalties have significant long-term potential as the projects develop further. 

The distinct feature of this spin-out is the clear separation of the royalty interests into a focused entity. Royalty streams often provide a more stable, long-term revenue base compared to the volatility and capital intensity associated with exploration and development phases. By creating LunR Royalties, NGEx aims to unlock additional value from these cash flow streams while focusing its core resources on advancing project development. This dual approach offers shareholders a way to participate in both growth potential and income generation. 

The transaction also includes an exchange of existing NGEx stock options for replacement options in both NGEx and LunR Royalties, with adjustments made to exercise prices reflecting relative share values. This detail underscores the company’s effort to maintain equity alignment with shareholders as the spin-out moves ahead. 

A noteworthy aspect for shareholders holding shares through Euroclear Sweden AG is the opportunity to cross-border their NGEx shares to the Canadian Depositary for Securities Limited before the effective date of the arrangement, ensuring seamless receipt of new shares in both entities. Those who do not complete this cross-border process will have their shares transferred automatically to the Canadian register before receiving the new shares. 

Market watchers see this spin-out as a strategic separation of two different value drivers. The royalty company can attract investors seeking exposure to stable, ongoing revenue from producing assets without the exploration risk, while NGEx remains focused on the technically demanding and capital-heavy stages of resource expansion and development. This approach is becoming popular in the mining sector as companies seek to maximize shareholder returns by tailoring investment risk profiles. 

The effective date for the transaction and the record date for share entitlements have yet to be set but will be publicly announced once determined. Completion is expected in the fourth quarter of 2025, subject to customary closing conditions and regulatory approvals. NGEx’s clear communication and court endorsement reduce uncertainty for shareholders as the company executes this restructuring. 

Overall, NGEx Minerals is advancing its plan to give shareholders more direct access to its royalty assets while preserving the ability to concentrate on exploration and project development. This balance aims to create long-term value through differentiated exposure to the mining lifecycle, a strategy that could appeal to a wider range of investors interested in both growth opportunities and royalty income streams.