- Orogen Royalties (TSXV:OGN) posted positive net income in Q2 2024, extending its profitable track record to two-and-a-half consecutive years
- The company expects seven partner-funded drill programs in 2024, opening shareholders up to robust upside as management waits for fat pitches to invest available cash
- Orogen is a royalty creator and acquirer focused on precious and base metal discoveries
- Orogen Royalties stock has added 126.23 per cent year-over-year and more than 300 per cent since inception in 2021
Orogen Royalties (TSXV:OGN) posted positive net income in Q2 2024, extending its profitable track record to two-and-a-half consecutive years.
The company took in net income of C$511,256, up by 288 per cent from C$131,616 year-over-year, supported by record royalty revenue and a 10 per cent reduction in general and administrative expenses year-over-year.
Royalty revenue came in at C$1,908,741, up by 62 per cent from C$1,178,941 year-over-year, with 610 attributable gold equivalent ounces sold, up by more than 40 per cent from 435 year-over-year, driven by higher gold prices, an increase in ore processed and higher gold grades. The company sold its ounces in Q2 2024 at an average price of US$2,338 per ounce, up from US$1,975 year-over-year.
Orogen’s globally diversified royalty portfolio, which stands at 25 according to the company’s latest investor presentation, has generated C$1,695,612 in cash from operating activities year to date, consistent with C$1,642,658 year-over-year. Excluding changes in non-cash working capital, the figure for the quarter rises to C$1,750,970, representing an 86 per cent increase year-over-year.
Working capital stood at C$22,996,411 as of June 30, 2024, up from C$18,254,073 at the beginning of the fiscal year, granting the company plenty of dry powder to continue creating shareholder value.
A profitable track record to watch
Orogen has been busy over the past two-and-a-half years, adding eight options, one alliance and 14 royalties to its asset base, allowing management to demonstrate its capital allocation skills by:
- Growing revenue from C$2.08 million in 2021 to C$5.98 million in 2023.
- Growing net income from C$840,000 in 2022 to C$3.04 million in 2023, followed by C$290,000 in Q1 2024.
- Attracting significant institutional ownership from the likes of Sprott Asset Management (9.6 per cent), Global Strategic Management (10.5 per cent) and Altius Minerals (18.1 per cent).
With seven partner-funded drill programs expected in 2024, shareholders are positioned to benefit from positive news flow as management looks for undervalued opportunities to put its cash to work.
Its most recent acquisition, the TCS copper-zinc project in northern British Columbia, features three high-priority targets backed by geophysical anomalies only 80 km from the Kutcho copper project, which houses measured and indicated resources of 22.8 million tons grading 1.52 per cent copper, 2.18 per cent zinc and 0.39 grams per ton of gold, and 12.8 million tons of inferred resources grading 1.10 per cent copper, 1.58 per cent zinc and 0.25 g/t gold.
Leadership insights
“We are pleased to deliver another strong financial quarter with record revenue generated from the Ermitaño mine where production continues to outperform First Majestic’s initial guidance,” Paddy Nicol, chief executive officer of Orogen Royalties, said in a statement. “Our focus on cost control has resulted in a strong conversion of royalty revenue into cash flow and net profit. Exploration efforts at Ermitaño also resulted in the recently announced discovery of the Navidad vein system, located within the company’s royalty area of interest. Although the full impact of the Navidad discovery is not yet known, we are optimistic that the Ermitaño royalty will continue to underpin the company’s profitability over the long-term.”
“Meanwhile, the Expanded Silicon gold project continues to advance under AngloGold Ashanti. Recent infill drill results from the Merlin deposit highlight a significant and growing high-grade core, with impressive results including 144.5 m grading 10.53 g/t gold,” Nicol added.
About Orogen Royalties
Orogen is a royalty creator and acquirer focused on precious and base metal discoveries.
Orogen Royalties stock (TSXV:OGN) last traded at C$1.38 per share. The stock has added 126.23 per cent year-over-year and more than 300 per cent since inception in 2021.
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(Top photo from Orogen Royalties’ Expanded Silicon project in Nevada: Orogen Royalties)