The Strategic Implications of LunR Royalties' TSXV Listing and Its Impact on NGEx's Future Value Creation

The recent spin-off of LunR Royalties from NGEx Minerals Ltd. and its subsequent listing on the TSX Venture Exchange (TSXV) represents a pivotal moment in the evolution of both companies. By separating royalty assets from exploration operations, NGEx has executed a corporate restructuring that aims to unlock value for shareholders while positioning LunR as a standalone entity in the growing royalty and streaming sector. This analysis examines the strategic rationale behind the spin-off, the mechanics of the TSXV listing, and the potential implications for NGEx's long-term value creation.

Spin-Off Mechanics and TSXV Listing: A Structural Realignment

NGEx completed the spin-off of LunR Royalties on October 23, 2025, via a statutory plan of arrangement under the Canada Business Corporations Act. Shareholders received 1/4 of a LunR share for each NGEx share held, with NGEx retaining a 19.9% stake in the new entity. This structure ensures that NGEx shareholders now have dual exposure to both the exploration projects (Lunahuasi and Los Helados) and the associated royalty interests, which LunR holds as a 1.00% and 1.38% net smelter return (NSR) royalty, respectively according to Q3 results.

LunR's TSXV listing, which commenced on December 19, 2025 under the ticker "LUNR," further solidifies its independence. The company operates as a Tier 2 Investment Issuer, with 4.7 million stock options held in escrow to be released over 36 months. This listing provides LunR with access to capital markets, a critical enabler for acquiring additional royalty assets and diversifying its portfolio-a strategy common among successful royalty companies like Franco-Nevada and Royal Gold.

Strategic Implications for NGEx: Focused Exploration and Capital Efficiency

The spin-off allows NGEx to concentrate its resources on advancing the Lunahuasi and Los Helados projects, which have demonstrated significant high-grade mineralization. By transferring royalty assets to LunR, NGEx can streamline its capital allocation toward exploration and drilling programs, such as the ongoing Phase 4 campaign at Lunahuasi, which aims to expand known mineralized zones.

The separation of royalty assets also reduces complexity, enabling NGEx to be evaluated purely on its exploration potential rather than the combined value of its projects and royalties.

Simultaneously, the spin-off was accompanied by a C$175 million private placement, upsized from an initial C$100 million target due to strong investor demand according to Q2 results. This capital infusion supports NGEx's operational flexibility, particularly as it continues to operate without revenue and reports ongoing losses.

LunR Royalties: A Standalone Royalty Play with Diversification Potential

As a newly listed entity, LunR's value proposition lies in its ability to leverage the inherent stability of royalty assets. Royalty companies typically benefit from lower capital intensity and higher margins compared to exploration-focused peers, as they earn income from production without bearing operational risks. LunR's current portfolio includes two geographically diverse NSR royalties, which could serve as a foundation for future acquisitions.

The TSXV listing provides LunR with a platform to raise capital for such acquisitions, a strategy that could accelerate portfolio diversification. For example, LunR could target underappreciated royalties in jurisdictions with active mining activity, such as Latin America or Africa. This approach aligns with industry trends, as royalty companies increasingly act as consolidators in the mining sector.

Market Reaction and Analyst Perspectives: Mixed Signals Amid Uncertainty

The market's response to the spin-off has been cautiously optimistic. NGEx shares experienced a short-term uptick following the announcement, but analysts remain divided. One analyst assigned a "Hold" rating with a C$26.00 price target, while TipRanks' AI model labeled the stock a "Underperform" due to financial weaknesses. These divergent views reflect uncertainties around NGEx's ability to monetize its exploration projects and the liquidity of LunR's shares, which only began trading in late 2025.

Retail investors also appear conflicted, with fair value estimates for NGEx ranging widely. This volatility underscores the risks inherent in exploration-focused companies, even with royalty assets in the background according to market analysis. For LunR, the challenge will be to demonstrate growth potential through strategic acquisitions and production from its existing royalties, which are tied to projects still in the development phase.

Risks and Challenges: Balancing Opportunity and Volatility

While the spin-off offers clear strategic benefits, it also introduces risks. NGEx's ongoing losses and lack of revenue raise questions about its long-term viability without significant discoveries at Lunahuasi or Los Helados according to financial reports. Meanwhile, LunR's value is contingent on the success of these projects, which are still in the exploration stage. If production timelines are delayed or costs escalate, the royalties' value could be diminished.

Additionally, the 19.9% ownership stake NGEx retains in LunR may limit its ability to fully capitalize on the royalty assets. While this stake provides a residual upside, it also means NGEx shareholders are exposed to the same risks as LunR's public shareholders, including market volatility and operational delays according to official statements.

Conclusion: A Calculated Move Toward Value Creation

The LunR spin-off and TSXV listing represent a calculated attempt to unlock value through corporate restructuring. By separating exploration and royalty assets, NGEx has created a clearer path for capital allocation and shareholder focus. LunR, meanwhile, has positioned itself to benefit from the growing demand for diversified, low-risk mining investments.

However, the success of this strategy hinges on NGEx's ability to deliver meaningful discoveries at Lunahuasi and Los Helados, as well as LunR's capacity to grow its royalty portfolio. Investors should monitor the Phase 4 drilling results and LunR's capital-raising activities closely. If executed effectively, this spin-off could serve as a blueprint for how junior miners leverage royalty structures to enhance shareholder value in a volatile market.