Unlocking Value Through Strategic Spin-Out and High-Grade Discoveries at NGEx Minerals

In the ever-shifting landscape of resource investing, the ability to separate value from noise is a rare skill. NGEx Minerals (NGEX) has emerged as a compelling case study in this regard, leveraging a dual strategy of asset rationalization and high-impact exploration to unlock shareholder value. By spinning out its net smelter return (NSR) royalties on the Lunahuasi and Los Helados projects while simultaneously unveiling groundbreaking drill results at Lunahuasi, the company is positioning itself as a catalyst-driven play with significant upside for investors seeking exposure to high-grade copper-gold porphyry growth.

The Spin-Out: A Strategic Move to Focus on Core Assets

NGEx's decision to spin out its NSR royalties via a statutory plan of arrangement is not merely a corporate maneuver—it is a calculated step to streamline operations and sharpen focus on its most promising assets. The spin-out will create Delta Royalties Corp. (RoyaltyCo), a new entity that will hold a 1% NSR royalty on the Lunahuasi Project and a 1.38% NSR royalty on the Chilean portion of the Los Helados Project. Shareholders will receive 1/4 of a RoyaltyCo share for every NGEX share held, effectively diversifying their exposure while retaining their stake in NGEx's exploration-driven growth.

This move mirrors the playbook of successful mining companies that have historically separated royalty assets from core operations to unlock latent value. By doing so, NGEx is not only creating a new revenue stream through RoyaltyCo but also allowing its management to concentrate on advancing Lunahuasi and Los Helados without the distraction of managing royalty income. The spin-out is expected to be finalized in Q4 2025, pending regulatory and shareholder approvals, with RoyaltyCo potentially listing on the TSX-V.

High-Grade Discoveries at Lunahuasi: A Game-Changer

The true catalyst for NGEx's re-rating lies in the Phase 3 drill results from the Lunahuasi Project, which have redefined the project's potential. The discovery of a copper-gold porphyry system adjacent to existing high-grade vein structures is a seismic shift in the project's valuation. Drillhole DPDH027, for instance, intersected 1,619.4 meters at 0.87% CuEq, including a standout 743 meters at 0.56% CuEq, with sub-intervals like 18 meters at 2.68% CuEq and 17.8 meters at 1.23% CuEq. These results suggest a large-scale porphyry system that could rival some of the world's most productive deposits.

But the story doesn't end there. The same program uncovered ultra high-grade gold in quartz veins, with drillhole DPDH046 returning 2.2 meters at 142.27 g/t Au and 3.6 meters at 245.39 g/t Au. This rare mineralization style—common in world-class gold projects like El Indio—adds a second, high-margin component to Lunahuasi's value proposition. Together, these discoveries transform Lunahuasi from a high-grade copper-gold project into a multi-commodity, multi-tenement asset with the potential to support a mineable deposit.

The Investment Thesis: Catalysts and Upside

For investors, the combination of the spin-out and the drill results creates a powerful flywheel. The spin-out ensures that shareholders benefit from both the exploration upside of Lunahuasi and the steady royalty income from RoyaltyCo. Meanwhile, the Phase 3 results provide a clear roadmap for resource growth, with the upcoming Phase 4 drill program (planned for October 2025) poised to define the full extent of the porphyry and gold systems.

The key metrics to watch include:
1. Shareholder approval of the spin-out at the September 12 meeting.
2. Regulatory approvals for the TSX-V listing of RoyaltyCo.
3. Phase 4 drilling outcomes, which could lead to a formal resource estimate and preliminary economic assessment (PEA).

Risks and Considerations

As with any junior miner, NGEx's strategy is not without risks. The spin-out requires regulatory and court approvals, and the success of the Phase 4 drilling is critical to maintaining investor confidence. Additionally, the market for copper and gold remains volatile, though the long-term fundamentals for both metals remain robust due to decarbonization and electrification trends.

Conclusion: A Strategic Play for the Long-Term

NGEx Minerals has executed a masterstroke by aligning its corporate strategy with the geological potential of its flagship assets. The spin-out of royalties is a smart way to monetize non-core value, while the discoveries at Lunahuasi provide a clear path to resource growth and eventual development. For investors with a medium-term horizon, NGEX offers a rare combination of strategic clarity, geological promise, and capital-efficient execution.

The upcoming shareholder vote and the Phase 4 drill program are critical inflection points. If executed successfully, NGEx could evolve from a speculative junior explorer into a mid-tier copper-gold developer with a royalty arm to boot. In a market that often undervalues exploration-stage assets, this is a compelling opportunity to bet on the next phase of the resource cycle.