Orogen Royalties said revenue jumped 70% in 2023

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Orogen Royalties Inc. [OGN-TSXV, OGNRF-OTCQX] released its preliminary financial results, reporting total revenue of $8.0 million for the year ended December 31, 2023, marking an increase of 70% from $4.7 million in 2022.

The increase was attributed to sharply higher revenue (an 58% increase) from the Ermitano mine in Sonora, Mexico, as well as a year-over-year 105% increase in prospect generation revenue.

Orogen holds a 2.0% net smelter return royalty on First Majestic Silver Corp.’s [FR-TSX, AG-NYSE, FMV-Frankfurt] Ermitano Mine. According to First Majestic, forecasted production guidance from the Santa Elena mine complex in 2024 is 81,000 to 90,000 ounces of gold and 1.1 million to 1.2 million ounces of silver, with over 90% of the production coming from the Ermitano mine.

The Santa Elena mine operation consists of the Santa Elena and Ermitano underground mines. A single processing plant treats the Santa Elena and Ermitano ores separately.

Orogen estimates that the production forecasts will result in royalty revenues of between $4.5 million (US$3.3 million) and $5.0 million (US$3.7 million) based on a gold price of US$2,000 an ounce.

The company also holds a 1.0% NSR royalty on the Expanded Silicon gold project, which is located in Nevada. On February 23, 2024, project owner AngloGold Ashanti Ltd. [AU-NYSE, ANG-JSE, AGG-ASX]), announced an initial inferred resource of 9.05 million ounces of gold at the Merlin deposit.  The resource at Merlin is a significant discovery, separate and contiguous to the previously announced 4.22 million-ounce-gold resource at the Silicon deposit. To date Orogen said its royalty interest exposure is 13.27 million ounces of gold.

Over US$73.9 million was invested by AngloGold on the Expanded Silicon project in 2023, including 129,000 metres of drilling, with a focus on the Merlin deposit. AngloGold has launched a prefeasibility study for the Expanded Silicon project with a focus on mining, processing, and infrastructure trade-off studies, drilling for resource conversion and extension, and exploration programs. In addition, AngloGold is working on hydrogeological, geotechnical and metallurgical programs.

“The year 2023 was transformative for Orogen where we achieved record financial performance,’’ said Orogen CEO Paddy Nicol. “This was largely due to increased production from the Ermitano mine and strong performance in our prospector generation business,’’ he said. “The market was active during the beginning of 2023, and we were able to profitably transact on several quality projects and create new royalties for Orogen.’’

Nicol went on to say that the ongoing alliance in Nevada with Altius Minerals Corp. [ALS-TSX, ATUSF-OTCQX], has proven to be successful for both groups with new projects generated at a low cost. “The company’s financial position continues to strengthen and positions the company to take advantage of cyclical growth opportunities to create value for shareholders,’’ Nicol said.

Orogen’s preliminary financial results were released after the close of trading on March 18, 2024, when the shares closed at 84 cents. The shares trade in a 52-week range of 91 cents and 45.5 cents.

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