Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Orogen Royalties Announces Profitable 2022 Fiscal Year End Results
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Orogen Royalties Announces Profitable 2022 Fiscal Year End Results
Vancouver, B.C. March 30, 2023 (TSX.V:OGN) (OTCQX:OGNRF) Orogen Royalties Inc. (“Orogen” or the “Company”)
is pleased to report operating and financial results for the fiscal year ended December 31, 2022, and updates on
corporate and operational activities.
“Fiscal 2022 marks Orogen’s first year of profitability resulting from strong revenue from our royalty and prospect
generation business coupled with tight cost controls,” commented Orogen’s CEO, Paddy Nicol. “The Ermitaño gold-
silver mine in Mexico, where Orogen holds a 2% NSR royalty, delivered solid revenue and 2023 guidance from
operator First Majestic Silver points to another strong year. We transacted on eight mineral projects that profitably
supported our prospect generation business and added eight new royalties. Orogen now holds 44 royalty and mineral
property interests including 23 royalties, 14 projects under option, two alliances, and five projects available for
option or sale. Finally, we are very encouraged by the recent developments on AngloGold Ashanti’s Silicon project
in Nevada, where Orogen holds a 1% NSR royalty. Gold and silver resources at the Central-Silicon area continue to
display exceptional promise with additional potential to come from the Merlin area, thought to be one of the most
significant exploration targets in the greater Silicon camp.”
Fiscal 2022 Year End Highlights
All amounts are in Canadian dollars unless otherwise stated.
• Net Income from Operations: Net income was $840,178 or $0.005 per share compared to a net loss of
$2,831,445 or $0.02 per share in 2021, representing a $3,671,623 increase in net income. This was due to a
significant increase in royalty revenue, a profitable prospect generation business, and a 7% reduction in
general and administrative expenses.
• Royalty Revenue: Royalty revenue of $3,744,776 was earned from the Ermitaño royalty during the fiscal year
ended December 31, 2022, with 1,588 attributable gold equivalent ounces (“GEOs”) sold at average price of
US$1,791 per ounce. This is an increase of $3,135,488 or 515% compared to a revenue of $609,288 earned
in 2021. The Company holds a 2.0% uncapped and non-buyable net smelter return (“NSR”) royalty on the
Ermitaño Mine with First Majestic Silver Corp. (“First Majestic”) as the operator that began commercial
production in the fourth quarter of 2021.
• Prospect Generation: Net income of $316,761 from prospect generation activities compared to $288,733
reported in 2021, representing a 10% increase. During the year, the Company recorded $881,118 (2021 -
$1,654,845) in revenues and $564,357 (2021 - $1,366,112) in expenses that includes exploration
expenditures and impairment costs.
• G&A Expenses: General and administrative expenses of $3,257,516 were incurred in 2022 compared to
$3,508,917 incurred in 2021, representing a 7% reduction.
• Cash flow: Cash flow of $687,115 was generated from operating activities in 2022 compared to $3,529,230
that was used in operating activities in 2021. Cash flow generated from operating activities, excluding
changes in non-cash working capital, was $786,053 in 2022 compared to $2,371,252 that was used in 2021.
• Working Capital: The Company has working capital of $12,083,375 at December 31, 2022 compared to
$10,239,343 at the beginning of the fiscal year. The Company has no long-term debt.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For complete details of the Company’s financial results, please refer to the audited consolidated financial statements
and MD&A for the year ended December 31, 2022 and 2021. The Company’s filings are available on SEDAR at
www.sedar.com and on Orogen’s website at www.orogenroyalties.com. Please also see non-IFRS Measures at the
end of this news release.
Summary of Results
Consolidated Statement of Income and Comprehensive
Income
For the Year Ended December 31
2022 2021
Income from Royalties $ 3,744,776 $ 609,288
Income from Prospect Generation activities 316,761 288,733
Other income 89,889 100,136
Total income 4,151,426 998,157
G&A 3,257,516 3,508,917
Operating income (loss) before other adjustments $ 893,910 $ (2,510,760)
Other income (loss) 15,960 8,757
Gain (loss) on marketable securities fair value adjustment (198,388) (194,521)
Net income (loss) before income tax $ 711,482 $ (2,696,524)
Income tax recovery (expenses) 128,696 (134,921)
Net income (loss) and comprehensive income (loss) for
the period
$ 840,178 (2,831,445)
Basic income (loss) per share $ 0.00 $ (0.02)
Diluted income (loss) per share $ 0.00 $ (0.02)
Non-IFRS and Other Measures
GEOs 1,588 268
Average realized gold price per GEO US$ 1,791 US$ 1,795
Cash flow from operating activities, excluding changes in
non-cash working capital
$ 786,053 $ (2,371,252)
To date, the Company has over 44 royalty and mineral property assets in Canada, United States, Mexico, Argentina
and Kenya including 23 royalties, 14 mineral properties under option, two alliances and five projects that are
available for sale or option. During the year ended December 31, 2022, the Company sold two projects, entered into
six earn-in agreements, and added eight royalty assets to its portfolio. The Company capitalized $1,816,452 in
acquisition and exploration expenditures, and received $2,605,094 in recoveries from project sales, expense
reimbursements and payments from partners on active earn-in agreements, joint ventures, or alliances. A gain of
$842,797 was recognized because of these activities resulting in a net income of $316,761 after impairment and
exploration expense deductions for the Company’s prospect generation business.
Total general and administrative expenses for the 2022 fiscal year was $3,257,516, a 7% reduction compared to
$3,508,917 incurred in 2021 and this was due to a reduction in salary expense that was offset by higher accounting,
legal, general overhead, and professional fees. Lower head count and salary costs charged to alliances contributed
to lower salary expenses for 2022.
Q4-2022 Summary
The Company reported its highest net income in the fourth quarter, and this was due an increase in royalty revenue,
significant reduction in G&A expenses, and a gain from fair value adjustments of marketable securities.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
During the three-month ended December 31, 2022, the Company reported net income of $939,271 compared to a
net loss of $2,304,254 reported during the same period in 2021 and this represents an increase of $2,973,525 in net
income and this was due to:
• Royalty Revenue: $904,681 (2021 - $609,288) in royalty revenue generated from the Ermitaño mine. This
represents 424 GEOs (2021 – 268 GEOs) based on an average price of US$1,726 (2021 - $1,795) per ounce,
a 9% increase in production compared to the average production of the last three quarters.
• Prospect Generation: The Company reported a loss of $86,154 (2021 – loss $1,211,182) from prospect
generation activities from $216,058 (2021 - $154,930) in revenues less $302,212 (2021 - $1,366,112) in
expenses including impairment cost of $155,548 (2021 - $1,403,648).
• G&A Expenses: The Company incurred $716,859 (2021 - $1,415,896) in general and administrative expenses,
representing a 49% reduction due to lower expenses in most categories including share based compensation,
salaries, and professional fees.
• Marketable Securities Fair Value Adjustment: The Company recognized a gain of $677,076 (2021 – $90,670)
in adjusting marketable securities to fair value. The gain was due to an improvement in the value of the
Company’s equity investment portfolio compared to the previous quarter.
Ermitaño (Sonora, Mexico)
First Majestic operates the Ermitaño mine where the Company holds an uncapped and non-buyable 2.0% NSR
royalty. During the 2022 fiscal year, First Majestic reported that the Ermitaño mine contributed to more than 60% of
the plant feed at the Santa Elena operation after it commenced commercial production in later 2021. The Company
received total royalty revenue of $3,744,776 (US$2,844,357) with 1,588 GEOs sold at an average price of US$1,791
per ounce. Highlights include the following:
• Successful expansion of liquid natural gas powerplant at the Santa Elena mine from 12 MW to 24 MW to
supply lower cost, cleaner power to operations which includes the Ermitaño mine.
• Strong production from the Ermitaño mine continued with its second highest quarterly production in Q4.
First Majestic expects production between 7.8 and 8.7 million silver equivalent ounces for 2023 as it
transitions to full production at the Ermitaño mine.
• First Majestic expects underground development will focus exclusively in the Ermitaño mine to achieve 2,500
tonnes per day of underground ore extraction throughout 2023.
• Approximately 20,000 metres of infill drilling at the Ermitaño mine to convert Inferred Resources to Indicated
Resources and mine expansion for 2023.
In accordance with First Majestic’s 2023 guidance, using a silver to gold ratio of 84:1 and gold price of US$1,800 per
ounce, the Company forecasts that production between 92,000 and 103,000 gold equivalent ounces is forecasted
for the Ermitaño mine for 2023 resulting in revenue of approximately US$3.4M for 2023, a 20% increase in revenue
compared to 2022.
Note: For full updates on the Santa Elena mine, refer to First Majestic’s MD&A for the year ended December 31, 2022
that was filed on SEDAR (www.sedar.com) on February 23, 2023.
Silicon (Nevada, USA)
Orogen holds an uncapped and non-buyable 1.0% NSR royalty on 79 square kilometres of ground at the Silicon
project that includes the Silicon deposit and the Merlin area located Nye County, Nevada, US. The project is owned
and operated by AngloGold Ashanti NA (“AngloGold”). As disclosed in AngloGold’s Mineral Resource and Mineral
Reserve Report as at December 31, 2022, the following activities were completed as at December 31, 2022:
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
• Exploration drilling comprised of 262 RC drill holes, 65 DD holes and 40 RC pre-collar/diamond tail for a total
of 146,109 metres.
• Detailed geological mapping at 1:5,000 scale has been completed over a total of 58 square kilometres.
• Ground geophysics was carried out on the project including a total of 1,307 kilomet res of induced
polarization/resistivity, ground magnetics and gravity surveys.
• Geochemical sampling comprising outcrop rock chip sampling and 2.6 x 2.3 kilometres soil survey was also
carried out at various phases of the exploration program.
• Drilling program is continuing to infill and further delineate the deposit as well as collect test work material
in support of the planned pre-feasibility study that includes the Merlin area.
A US $50 million exploration budget including 12 drill rigs is planned for Silicon, Merlin and the greater district for
2023.
Total mineral resource declared by AngloGold on the Silicon deposit is 4.22 million ounce gold and 17.7 million ounce
silver at the Central-Silicon zone, including indicated resources of 3.4 million and inferred resources of 800,000
ounces gold. This is a change from an inferred mineral resource of 3.37 million ounces gold declared in 2022. The
increase in mineral resource ounces was a result of successful greenfields exploration, supported by an open pit
optimization at US$1,750 per ounce gold to demonstrate reasonable prospect of economic extraction. Testing
completed in 2022 provided more details regarding metallurgical variability of the transitional and unoxidized
material. This resulted in a reduction in heap leach recovery compared to the previous assumptions. Continued
studies will further refine the recovery estimates and evaluate the addition of a third processing option that may be
more suitable for those materials. The table below illustrates the year-on-year changes in mineral resource1:
Source: AngloGold Ashanti Mineral Resource and Mineral Reserve Report as at December 31, 2022
Additional highlights include the following:
• Indicated resources of 121.56 million tonnes grading 0.87 g/t gold for 3.4 million ounces and 3.98 g/t silver
for 15.54 million ounces.
• Additional inferred resources of 36.03 million tonnes grading 0.70 g/t gold for 800,000 ounces and 1.92 g/t
silver for 2.23 million ounces.
• Silicon pre-feasibility study to integrate Merlin area for potentially larger scale mining activity is expected
to be completed in 2023.
These results show that resources at the Silicon deposit have increased both in confidence and size. AngloGold has
invested a significant amount of capital to date for Silicon and the surrounding district including US$614 million in
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
acquisition of Corvus Gold Inc. and Coeur Sterling Inc. The pre-feasibility study report on Silicon, including the
Merlin area, will be an important milestone for Orogen as it will provide a more complete indication of scale and
size of the project.
Note: AngloGold’s Mineral Resource and Mineral Reserve Report as at December 31, 2022 was filed on March 17,
2023 and can be found at www.anglogoldashanti.com or on EDGAR at www.sec.gov.
Qualified Person Statement
All technical data, as disclosed in this press release, has been verified by Laurence Pryer, Ph.D., P.Geo., VP Exploration
for Orogen. Dr. Pryer is a qualified person as defined under the terms of National Instrument 43-101.
Certain technical disclosure in this release is a summary of previously released third-party information and the
Company is relying on the interpretation provided. Additional information can be found on the links in the footnotes.
About Orogen Royalties Inc.
Orogen Royalties is focused on organic royalty creation and royalty acquisitions on precious and base metal
discoveries in western North America. The Company's royalty portfolio includes the Ermitaño gold and silver Mine in
Sonora, Mexico (2.0% NSR royalty) operated by First Majestic Silver Corp. and the Silicon gold project (1.0% NSR
royalty) in Nevada, U.S., being advanced by AngloGold Ashanti. The Company is well financed with several projects
actively being developed by joint venture partners.
On Behalf of the Board
OROGEN ROYALTIES INC.
Paddy Nicol
President & CEO
To find out more about Orogen, please contact Paddy Nicol, President & CEO at 604-248-8648, and Marco LoCascio,
Vice President of Corporate Development at 604-248-8648. Visit our website at www.orogenroyalties.com.
Orogen Royalties Inc.
1015 – 789 West Pender Street
Vancouver, BC
Canada V6C 1H2
1. https://reports.anglogoldashanti.com/22/wp-content/uploads/2023/03/AGA-RR22.pdf
Forward Looking Information
This news release includes certain statements that may be deemed “forward looking statements”. All statements in this presentation, other than statements of
historical facts, that address events or developments that Orogen Royalties Inc. (the “Company“) expect to occur, are forward looking statements. Forward
looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”,
“believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur.
Although the Company believe the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results may differ materially from those in the forward looking statements. Facto rs that could cause the actual
results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, and continued availability of
capital and financing, and general economic, market or business conditions. Furthermore, the extent to which COVID-19 may impact the Company’s business
will depend on future developments such as the geographic spread of the disease, the duration of the outbreak, travel restrictions, physical distancing, business
closures or business disruptions, and the effectiveness of actions taken in Canada and other countries to contain and treat the disease. Although it is not possible
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
to reliably estimate the length or severity of these developments and their financial impact as of the date of approval of these condensed interim consolidated
financial statements, continuation of the prevailing conditions could have a significant adverse impact on the Company ’s financial position and results of
operations for future periods.
Forward-looking information in this news release includes disclosures regarding NSR royalty payments to be paid to the Company by First Majestic Silver Corp.
(“First Majestic”), the owners and operator of the Ermitaño mine located in Mexico and that the forecasted revenue which are based on First Majestic “NI 43-
101 Technical Report on Mineral Resource and Mineral Reserve Estimates” having an effective date of June 30, 2021. In addition to the technical report, the
disclosure herein also contains and the updated mineral reserve and resource estimates for the Ermitaño mine based on the San ta Elena Mineral Reserve,
Resource Estimates with an effective date of December 31, 2021 as announced by First Majestic on March 31, 2022 and as disclosed in their December 31, 2021
AIF, and First Majestic’s MD&A for the year ended December 31, 2022. Forward-looking statements are based on several mat erial assumptions, which
management of the Company believe to be reasonable, including, but not limited to, the continuation of mining operations in r espect of which the Company
will receive NSR royalty payments, that the commodity prices will not experience a material adverse change, mining operations that underlie the royalty will
operate in accordance with the disclosed parameters and other assumptions may be set out herein.
Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those
projected in the forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company’s management on
the date the statements are made. Except as required by securities laws, the Company undertakes no obligation to update these forward looking statements in
the event that management’s beliefs, estimates or opinions, or other factors, should change.
Except where otherwise stated, the disclosure in this news release relating to properties and operations in which Orogen hold s a Royalty are based on
information publicly disclosed by the owners or operators of these properties and information/data available in the public domain as at the date hereof, and
none of this information has been independently verified by Orogen. Specifically, as a Royalty holder and prospect generator, the Company has limited, if any,
access to properties on which it holds Royalty or other interests in its asset portfolio. The Company may from time to time receive operating information from
the owners and operators of the mining properties, which it is not permitted to disclose to the public. Orogen is dependent on, (i) the operators of the mining
properties and their qualified persons to provide information to Orogen, or (ii) on publicly available information to prepare disclosure pertaining to properties
and operations on the properties on which the Company holds Royalty or other interests, and generally has limited or no ability to independently verify su ch
information. Although the Company does not have any knowledge that such information may not be accurate, there can be no assurance that such third-party
information is complete or accurate. Some reported public information in respect of a mining property may relate to a larger property area than the area covered
by Orogen’s Royalty or other interest. Orogen’s Royalty or other interests may cover less than 100% of a specific mining property and may only apply to a portion
of the publicly reported mineral reserves, mineral resources and or production from a mining property.
Non-IFRS Measures
The Company has included certain results in this news release that do not have any standardized meaning prescribed by International Financial Reporting
Standards (“IFRS”) including total GEOs sold, average realized gold price per GEO, and cash flow from operating activities excluding changes in non-cash working
capital adjustments. The Company's royalty revenue is converted to a gold equivalent ounce by dividing the royalty revenue received during the period by the
average gold price of the period. The Company has also used the non-IFRS measure of operating cash flows excluding changes in non-cash working capital. This
measure is calculated by adding back the decrease or subtracting the increase in changes in non -cash working capital to or from cash provided by (used in)
operating activities.