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Mining Company Provides Update on Drilling and Development

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Orogen has released information on its drilling progress and its asset portfolio. Read on to see why two experts rate this stock a Buy.

Orogen Royalties Inc. (OGN:TSX.V) has provided a drilling and resource development update on AngloGold Ashanti NA's Silicon-Merlin gold project in Nevada, United States, where Orogen holds a 1% net smelter return (NSR) royalty.

The highlights of the Merlin project include an exploration target that ranges from 230 million to 250 million tons, grading 0.8 to 1.0 grams per ton (g/t) of gold. The exploration target at Merlin is exclusive of the 3.4 million ounces of gold indicated and 800,000 ounces of inferred gold resources at Central Silicon. Impressive drill hole intercepts include drill hole MER-23-0105-RD, grading 3.27 g/t gold over 285m, and drill hole MDT-21, grading 2.61 g/t gold over 214.8m.

Over 261 drill holes totaling over 120km of drilling at Merlin were completed as of July 2023. The Merlin zone remains open to the west, southwest, and north.

According to Paddy Nicol, the CEO of Orogen, "This is an excellent start for the resource development program at Merlin. AngloGold anticipates completion of the resource delineation drilling program by the end of Q3 of 2023.

According to Global Analyst Adrian Day, Orogen has performed above expectations. 

By year-end, AngloGold plans to release a concept study on the combined Silicon-Merlin project, including an initial mineral resource declaration at Merlin.

Drilling is also continuing at both Silicon Central and Merlin for resource conversion and expansion. In combination with he previously announced resources at Central Silicon, the new announcement clearly indicates that a world-class deposit is developing within Orogen's royalty area of interest (AOI)."

Orogen has also provided an update on its royalty portfolio and forecast for H2 of 2023. Orogen holds a royalty interest in 72,500m of drilling, including the Silicon Merlin gold project, the Ermitano gold-silver mine, and the MPD South (Axe) copper-gold porphyry project.

Sadif Investment Analytics rated the company as a "Strong Buy" and cited its strong financials, reasonable earnings quality, and low all-around risk.

Total exposure to drill projects in 2023 is estimated to be at over 100,000m, including Orogen's Project Generation business. AngloGold Ashanti NA's 6 to 8 million ounces gold exploration target at Merlin adds to the existing resources at Central Silicon of 3.4 million ounces gold and 800,000 ounces gold inferred, where Orogen holds a 1% net smelter return royalty.

According to Nicol, "Our royalty portfolio consists of 24 projects . . . Most of our royalties were generated organically through our prospect generation business, and we benefit from exploration and advancement on these assets with no capital or risk exposure to the company."

A Compelling Story for Gold

Analysts and gold producers are optimistic about the market for precious metals and have remained bullish despite a global shift in focus to lithium. According to Jake Klein, the executive chairman of Evolution Mining, "I think the gold story is compelling. It's a store of value, and as people think about their portfolio, it is an alternative to the U.S. dollar." Investors have traditionally looked to gold as a safe haven investment when the dollar is weak.

For gold, 1.00 g/t renders an open-cut project viable, while 5.00 g/t gold is considered high grade. For underground projects, 4.00 g/t makes a project viable.

Out-Performing Expectations

According to Global Analyst Adrian Day, Orogen has performed above expectations. Adrian Day highlighted the company's excellent portfolio of royalties, commenting, "Silicon-Merlin could form the long-term cash-flowing foundation for Orogen, which has current cash flow from its Ermitano royalty, to continue generating prospects and building a large company. Silicon revenue should commence before Ermitano."

He rated the company as a Buy on account of its assets, balance sheet, and management. 

Sadif Investment Analytics rated the company as a "Strong Buy" and cited its strong financials, reasonable earnings quality, and low all-around risk.

streetwise book logoStreetwise Ownership Overview*

Orogen Royalties Inc. (OGN:TSX.V)

*Share Structure as of 8/25/2023

The report stated, "The current market sentiment in relation to the company is positive with favorable technical indicators, positive estimates, and an attractive valuation." 

Ownership and Share Summary

Management and insiders own 3.99% of the company. Director Roland Wayne Butler owns 1.45% of the company with 2.80 million shares. President, CEO, and Director John Patrick Nicol owns 0.97% with 1.88 million shares. Technical Advisor Robert P. Felder owns 0.66% with 1.28 million shares. VP of Corporate Development Marco LoCascio owns 0.54% with 1.04 million shares. Director Timothy Mark Janke owns 0.30% with 0.58 million shares, and VP of Exploration Laurence Pryer owns 0.05% with 0.10 million shares.

Institutions own 27.79% of the company. Altius Minerals Corp. owns 15.16% with 29.32 million shares, Sprott Asset Management, LLC, owns 9.93% with 19.20 million shares, and Euro Pacific Asset Management, LLC, owns 2.70% with 5.22 million shares.

There are 193.4 million shares outstanding and 156.39 million free-float traded shares. The company has a market cap of CA$85.68 million. It trades in the 52-week period between CA$0.38 and CA$0.61.

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Important Disclosures:

  1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Orogen Royalties Inc.
  2. Amanda Duvall rote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
  3. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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