viewOrogen Royalties Inc.

Orogen Royalties looking to organic royalty creation following merger of equals


The company was formed on August 18, 2020, from the merger of Renaissance Gold and Evrim Resources


Quick facts: Orogen Royalties Inc.

Price: 0.36 CAD

Market: TSX-V
Market Cap: $62.42 m
  • Formed by merger of Renaissance Gold and Evrim Resources
  • Focused on organic royalty creation driven by existing joint ventures and alliances
  • Industry knowledge coupled with geological expertise

What Orogen Royalties does:

Orogen Royalties Inc. (CVE:OGN) was formed on August 18, 2020, from the merger of Renaissance Gold Corp. (CVE:REN) and Evrim Resources Corp. (CVE:EVM).

The company has said its mission is to create and acquire precious metal royalties using its strengths as a prospect generator as well as established business relationships across the mining industry.

Organic royalty creation will be driven by existing joint ventures and alliances, and through prospect generative exploration that leads to new opportunities to create value for Orogen's shareholders and its exploration partners – a hallmark of Evrim and Renaissance that has existed for over a decade.

Strategic royalty acquisition will be supported by Orogen's industry knowledge coupled with geological expertise related to projects and critical types of deposit, it added.

Underpinning Orogen's strategic royalty focus are two organically created cornerstone assets: a 2% net smelter return royalty (NSR) on the Ermitaño West gold-silver deposit in Sonora, Mexico where production by First Majestic Silver Corp. is slated to begin in 2021, and a 1% NSR on the Silicon gold property in the Bare Mountain district of Nevada, USA, that is currently being explored by AngloGold Ashanti, NA.

In addition, the company has eight early-stage royalty assets in Mexico, Nevada, and Argentina and a broad portfolio of exploration projects in Canada, USA, and Mexico.

Orogen Royalties is building on the history of both Evrim and Renaissance, but with a renewed focus on organic royalty creation and royalty acquisition. The company is well-financed with several project under active joint ventures and alliances.

How is it doing:

In a 1Q 2021 update to its shareholders, Orogen Royalties said it is aiming to create more organic royalties and joint ventures this year.

Notably, the company revealed that at the Sarape project in Mexico, where it is in a joint venture with Hochschild Mining, there are preparations for a 2,500-metre drill program scheduled to start in late 1Q. If Hochschild exercises its option in the next five years, Orogen will retain a 3% net smelter royalty (NSR), of which 1% can be purchased for US$3 million.

As well, at the Maggie Creek gold project in Nevada, Orogen said its partner US Gold Corp has submitted a Notice of Intent (NOI) for a spring 2021 drill program aimed at testing the northeast extension of the Chukar-Alunite fault zone. US Gold has an option to earn up to 70% by spending C$4.5 million over seven years and producing a feasibility study by the end of the ninth agreement year.

Exploration is also continuing with three drill rigs this year at the Silicon gold project - where Orogen has a 1% NSR - in the Bare Mountain district of Nevada, adjacent to Coeur Mining's C-Horst and Corvus Gold's Lynnda Strip discoveries. Owner AngloGold Ashanti (AngloGold) resumed drilling on the Silicon property in the fourth quarter of 2020.

Also in Nevada, Orogen Royalties acquired the Pearl String high-sulphidation project with outcropping gold mineralization up to 12 grams per tonne (g/t) gold, the Kalium Canyon gold project, a steam-heated alteration cell similar to Orogen's Silicon discovery, and the Callaghan gold project targeting Carlin-type systems in a large area of shallow alluvial cover southwest of Nevada Gold Mine's Cortez camp.

The company noted that all of these exploration projects are being advanced to a drill-ready stage.

More recently, Orogen Royalties agreed to option the Lemon Lake copper-gold project in British Columbia to privately-held Acme Gold Company Limited. The royalties company said Acme Gold can acquire a 100% interest in the Lemon Lake project by making cash payments of $575,000 and work expenditures of $3 million over a five-year period, as well as by granting a 1% net smelter return (NSR) royalty to Orogen.

Previously, Orogen had optioned out its Baby Doe gold project in Nevada to Au-Reka Gold Corporation, which is a subsidiary of major Premier Gold Mines U.S.A. Premier Gold can earn an initial 55% interest in the project over four years by making cash payments of US$200,000 to Orogen and completing US$5 million in exploration.

On the management front, Orogen Royalties recently named Daniel Pace as the company’s new vice-president of Exploration, replacing the retiring Dave Groves.

Inflection points:

  • More news on organic royalty creation
  • First royalty asset to start production in 2021

What the boss says:

In a statement following completion of the merger, Orogen CEO, Paddy Nicol said: "Creating royalties organically through joint ventures and alliances represents the most elegant form of royalty creation.”

"Our intellectual investment into these projects is high while our cash outlay remains modest, and exploration success can lead to highly rewarding valuation events for our shareholders. The business relationships that have been forged by Evrim and Renaissance allow Orogen to be strategic and guided in its efforts to acquire royalties from mining companies and other entities," he added.

Contact Sean at sean@proactiveinvestors.com


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