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viewOrogen Royalties Inc.

Orogen Royalties looking to organic royalty creation following merger of equals

Snapshot

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

Gold

Quick facts: Orogen Royalties Inc.

Price: 0.295 CAD

TSX-V:OGN
Market: TSX-V
Market Cap: $51.15 m
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  • 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:

Orogen shares started trading on the TSX Venture Exchange on August 20. Under the term sheet for the deal, each Renaissance share was exchanged for 1.2448 Evrim shares, which resulted in Renaissance and Evrim shareholders each holding 50% of the issued and outstanding shares of Orogen.

In addition, each Renaissance warrant and option became exercisable for Orogen common shares, as adjusted in accordance with the exchange ratio.

Renaissance Gold boss Paddy Nicol took the reins as president and CEO of Orogen, while former Renaissance CEO Robert Felder was appointed a director and senior vice president of the merged group.

Another former Renaissance director Tim Janke also joined Orogen’s board, which comprises four directors, two from Evrim as well as the two from Renaissance. Paul van Eeden is chairman of the board, and David Caulfield is the other member.

At the end of June, following confirmation earlier that month of the Evrim merger plans, Renaissance Gold announced the sale of its South Roberts gold project in Nevada to a private US company as part of the firm’s evolution from prospect generator to royalty company.

The Vancouver-based company will retain a 1% net smelter return (NSR) royalty interest on any future production from South Roberts and a 0.5% NSR on any production from a separate group of claims known as RW.

Located in Eureka County, South Roberts is on the Battle Mountain-Eureka trend of prolific gold deposits and just south of McEwen Mining’s Gold Bar mine.

The project targets concealed Carlin-type gold mineralization and has not been adequately drill tested, providing opportunity for “world-class” discovery, according to Renaissance.

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.

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on 10/08/2020

4 min read