What do you know about OGN’s other asset, Ermitano?
What is a net smelter royalty?
What’s your overall assessment of OGN?
Thanks!
Did you know expanded Silicon/Merlin owned by Angologold is expected to produce 1.8 mil gold oz in year 4. This would make it the largest gold mine in the world. @OrogenRoyalties owns 1% NSR worth $45 mil FCF in year 4.
OGN has more than 20 royalty streams, outlined here. Ermintano is in production, and produced 100,000 ozs of gold last year and 1.2M ozs of silver. The Silicon Project is in development, with production of 500,000 ozs expected starting in 2026. Typically projects get delayed so we would not count on that timeline. In February, OGN held a conference call to discuss the project. A value to the NSR was not revealed, but the orginal production estimate was for 300,000 ounces, and the project still has significant exploration potential. It will generate substantial cash flow, certainly, once it enters commercial production. OGN has minimal current revenues. But our impressiion is positive. It has recognized several good projects early on, and will benefit from them for a long time.
NSR is a royalty which refers to the fraction of net smelter return that a mine operator is obligated to pay the owner of the royalty agreement. The royalty is paid in variable or fixed payments based on sales revenue received by a mining operator in return for mining output. It is contingent only on the sales price and quantity of product sold. Thus, the royalty owner does not incur any production/environmental or other risks that the miner incurs.