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About Orogen Royalties Inc. (OTCQX: OGNRF, TSXV: OGN)
Orogen Royalties Inc. is a Vancouver-based royalty and mineral exploration company focused on the organic creation and acquisition of royalties on precious and base metal discoveries in North America. The company employs a unique business model that combines royalty acquisitions with prospect generation, enabling it to generate long-term revenue streams while minimizing upfront costs and financial risk. Orogen's portfolio includes high-quality royalties on producing and advanced-stage assets, as well as a pipeline of exploration-stage projects.
Core Business Model
Orogen's primary revenue streams are derived from royalty payments on operating mines and advanced development projects. The company holds a 2% net smelter return (NSR) royalty on the Ermitaño gold-silver mine in Sonora, Mexico, operated by First Majestic Silver Corp., and a 1% NSR royalty on the Expanded Silicon gold project in Nevada, USA, being advanced by AngloGold Ashanti. Additionally, Orogen generates income through the sale and optioning of mineral projects developed under its prospect generation strategy.
Key Assets and Operations
- Ermitaño Gold-Silver Mine: Located in Sonora, Mexico, this producing mine is a cornerstone asset for Orogen, generating consistent royalty revenue. The mine has demonstrated strong production metrics, with high gold and silver recoveries and ongoing exploration success, including the discovery of the Navidad vein system.
- Expanded Silicon Project: Situated in Nevada, USA, this advanced-stage gold project includes the Merlin and Silicon deposits, with total inferred and indicated resources exceeding 16 million ounces of gold. AngloGold Ashanti continues to advance the project with significant drilling and prefeasibility studies.
- Prospect Generation Portfolio: Orogen's exploration efforts have resulted in a diverse portfolio of royalties and projects, including the TCS VHMS project in British Columbia and the Si2 gold project in Nevada. These assets are often optioned to partners, creating additional royalty opportunities.
Competitive Position
Orogen operates within the competitive royalty and streaming sector, distinguishing itself through its low-cost, organic royalty creation model. This approach allows the company to build a robust portfolio without incurring significant debt or shareholder dilution. By focusing on early-stage exploration and leveraging partnerships with operators, Orogen mitigates risks while maintaining exposure to high-potential discoveries.
Industry Context
The mining and royalty industry is characterized by cyclical commodity prices, operational dependencies on mine operators, and the need for strategic asset diversification. Orogen's focus on precious metals aligns with strong demand for gold and silver as safe-haven assets and industrial inputs. The company's geographic focus on North America provides access to politically stable jurisdictions with established mining infrastructure.
Strategic Focus
Orogen aims to expand its royalty portfolio through both acquisitions and organic creation. The company's financial discipline, as evidenced by its debt-free balance sheet and strong working capital, positions it to capitalize on counter-cyclical growth opportunities. Ongoing exploration and development by operators at key assets like Ermitaño and Expanded Silicon are expected to enhance the value of Orogen's royalty interests over time.
Conclusion
Orogen Royalties Inc. is a well-positioned player in the royalty and exploration sector, offering investors exposure to precious metal assets with reduced financial risk. Its innovative business model, high-quality asset portfolio, and strategic focus on North American jurisdictions underscore its potential as a significant value creator in the mining industry.
Orogen Royalties reported its first profitable year for fiscal 2022, with net income reaching $840,178 or $0.005 per share. This marks a significant turnaround from a loss of $2,831,445 in 2021. The company attributed its success to a boost in royalty revenue, particularly from the Ermitaño mine, yielding $3,744,776 in revenue, a 515% increase from the previous year. General and administrative expenses decreased by 7% to $3,257,516. Orogen's working capital rose to $12,083,375, reflecting a stronger financial position. The company successfully expanded its portfolio to 44 royalty and mineral property interests, signaling growth potential.
Orogen Royalties Inc. has announced the signing of a purchase agreement with P2 Gold Inc. and an option agreement with Kingfisher Metals Inc. regarding the Ball Creek property in British Columbia. P2 Gold acquires an 18,893-hectare section for $1 million in shares, along with a 1% net smelter return (NSR) royalty. Kingfisher can earn a 100% interest in a 35,020-hectare section by spending $7.5 million on exploration over four years. The agreements enhance Orogen's royalty positions and access to copper-gold resources, including a US$2.5 million cash payment and a 3% NSR on the Hank project.
Orogen Royalties Inc. (TSXV:OGN)(OTCQX:OGNRF) announced a significant increase in gold resources at the Silicon deposit, now totaling 4.2 million ounces, a 25% increase over 2022. Indicated resources comprise 3.4 million ounces from 121.56 million tonnes grading 0.87 g/t gold, fully converting previous inferred resources. An additional 800,000 ounces are classified as inferred. A pre-feasibility study is expected in 2023, integrating the nearby Merlin area. Over US$50 million is allocated for ongoing exploration in the Silicon camp, employing twelve drill rigs. CEO Paddy Nicol emphasized the enhanced resource confidence and future potential.
Orogen Royalties Inc. (Ticker: OGNRF) has authorized the grant of 156,000 Restricted Share Units (RSUs), 156,000 Deferred Share Units (DSUs), and 238,000 Stock Options to independent board members. This compensation is part of the Omnibus Equity Incentive Compensation Plan approved on October 27, 2022. The RSUs will vest after two years, while the DSUs vest in equal parts over three and four years. Stock Options are valid for five years at an exercise price of $0.53, with progressive vesting over three years. The grants await regulatory approval from the TSX Venture Exchange.
Orogen Royalties Inc. (OGNRF) reported strong fiscal 2022 performance, highlighting $5.6 million in partner-funded exploration. The company established eight new option and sale agreements and generated five new royalties across Mexico, Nevada, and British Columbia. Estimated income from project sales reached $620,000. Drilling activities are set to accelerate in 2023, including eight funded programs. Key projects included significant gold intersections at Spring Peak, with ongoing partnerships expected to enhance Orogen's royalty position. CEO Paddy Nicol emphasized the focus on expanding the project portfolio despite market challenges.
Orogen Royalties Inc. has signed a purchase agreement with Strikepoint Gold Inc. to sell its Cuprite gold project in Nevada for a total of approximately $450,000. Strikepoint will issue 6,428,571 shares, reimburse $35,208 in project costs, and grant a 3% net smelter return (NSR) royalty. The sale proceeds will be equally split between Orogen and its partner, Altius Minerals Corporation, each receiving 3,214,285 shares and a 1.5% NSR. The Cuprite project is considered a district-scale opportunity with significant geological potential, similar to AngloGold Ashanti's Silicon project.
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