Another Year of Record Revenue for Orogen

Source: Adrian Day 03/31/2025

Global Analyst Adrian Day reviews fourth-quarter financials from the last of the companies on his list to report and address your questions, including on the move of gold from London to New York, on uranium, Mexico, and more.

Orogen Royalties Inc. (OGN:TSX.V) reported fourth-quarter and annual financials last week, including record annual revenue of $9.9 million, up 22% from 2023. Royalty revenue was up 34%, while lower prospect generation revenue fell 26%, the result of reduced activity. The company ended the year with almost $27 million and no debt.

Orogen is in a very strong position with both a solid balance sheet and increasing revenue, one of the few juniors to have free cash flow. The market, of course, is waiting for developments on the potential sale of its royalty in AngloGold Ashanti Ltd.’s (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE) Expanded Silicon Project (ESP).

Orogen has the option of selling it — if the price is right, keeping it — to form the foundation of a larger royalty company or perhaps combining in some fashion with Altius, which also holds a royalty on the ESP and owns nearly 20% of the company. Altius separately has indicated that it has asked potential buyers to make bids but has stated that it may or may not sell (or swap) the royalty it holds. We expect some development over the next 30 to 60 days. After strong appreciation in the last seven days, we are holding.

Please note that my comments, judgments, and predictions are my own. Unless
clearly noted otherwise, they do not necessarily reflect the thinking of the
companies under discussion. There has been some misunderstanding on this.

TOP BUYS this week, include Altius Minerals Corp. (ALS:TSX), Ares Capital Corp. (ARCC:NASDAQ), and Metalla Royalty & Streaming Ltd. (MTA:TSX.V; MTA:NYSE American).

Answers to your Questions

Q. Massive amounts of gold have been moved from London to New York, and customers in London are now experiencing long delays getting their gold from Bank of England vaults. Are the banks moving gold to the COMEX because of concerns of a short-squeeze on physical? Also, is the Fort Knox gold really there? It sure seems as though there is not as much physical gold as there are claims. — E.M, Denver

A. We have received a few questions on this topic, so even though it is “old news,” we’ll address it as we see it. Estimates of 400 metric tonnes or over $4 billion at today’s prices has been moved from London vaults to the COMEX since November. This has led to weeks-long delays in getting bars out of Bank of England storage. Amid reports of a possible revaluation of the U.S. government’s gold holdings and even a possible role for gold in the reset monetary system (see last Bulletin, #952), as well as renewed calls for a full audit of Fort Knox, this had led to rumors that not all the gold that is supposed to be is, leading to a massive short-squeeze on the COMEX as traders demand physical delivery. Are these events connected? Do they account for gold’s recent rally? While the move of gold to New York is interesting and has ramifications in the short term on the gold price, I do not believe it is indicative of a massive short-squeeze, nor is it related to the possible revaluation of the U.S.’s gold holdings.

Why Is Gold Moving From London

Rather, the move across the Atlantic started for prosaic reasons, concerns about the possible imposition of tariffs. Banks like JP Morgan and HSBC hold large bullion reserves in London and often lend this gold to other traders. It simply made sense to bring to the gold to where it might be needed, and avoid the possibility of another 10% or 20% added to the price of importing the gold (through tariffs) at a later stage. We saw much the same phenomenon in 2020 when COVID lockdowns threatened the ability to even get the gold.

The transfer of gold and the threat of tariffs led to premiums on New York gold over London gold, actually exceeding $50 an ounce, and thus induced more London holders to move their gold and avoid the higher costs of buying new gold for delivery in New York. That brought in the arbitrageurs. The total cost involved in moving the gold is estimated (by the World Gold Council) at $3 to $5 an ounce. So, the move became a self-fulfilling loop.

Do the Delays Mean Not All the Gold Is There?

But what about the delays in getting gold out of the Bank of England vaults? This, too, has a prosaic explanation. First, the gold is fully allocated. If I want to take delivery of my bars, the Bank staff have to locate (the easy part) and retrieve (more difficult) my actual bars. This may involve moving many other bars on top of and surrounding my bars, a time-consuming task.

Were the gold unallocated — meaning if I ask for my five bars, they could give me any five bars — the talk would be far easier. And there is a limit on the staff entrusted to these tasks. Then, gold bound for the COMEX has first to travel to Switzerland where the refiners recast from the London-standard 400 ounce bars to the COMEX I kilogram bars There is a very real capacity limit at the refiners. Then, there are limits to how much gold can be carried on each passenger plane. Again, interesting, but nothing nefarious.

We discussed Fort Knox gold in our last Bulletin. Again, I do not think the developments are connected. I’ve heard concocted stories that it is the U.S. military flying in the gold to refill the empty vaults at Fort Knox and other depositories ahead of any audit. Wouldn’t someone notice heavy traffic in armoured vehicles? It would make a great Hollywood spy movie, but is not the cause of the gold movement. This has been positive for the gold price, and when, eventually, the tariff threat has diminished, and London storage is built up again, the price may fall back. But clearly not all of the move in the gold price since November — over $400 — can be attributed to the gold transfer. As for concerns that all the holders of long contracts on COMEX were going to ask for delivery, causing an explosion in the price, well we have had several expiration dates and there were no fireworks. So we might use those words of the London bobby, “Move along sir, nothing to see here.”

Do I Need a Canadian Broker for Junior Stocks

Q. I have experienced difficulties buying some Canadian stocks at different brokerages. Both Fidelity and Schwab refuse to allow me to buy one in which I am interested. What do I do? — D.G., NY

A. We continue to hear from readers on this topic. On the general issue of the difficulty in buying smaller Canadian stocks. To address your question, opening an account with a Canadian firm may provide U.S. investors with a way to buy low-priced Canadian stocks (as well as private placements). You would have to open the account with the U.S. branch of a Canadian firm (such as Haywood or Canaccord, but don’t expect that to necessarily be plain sailing. I invite readers to let me know of their experiences.

Swiss Banks May Not Be the Answer

I would have replied that one can use an offshore bank for such purposes . . . until last month, when one major Swiss firm rejected orders to buy a stock, saying that they no longer allow purchases of any U.S. or Canadian stock trading for less than $5 a share (and ADRs trading OTC for $10 a share). In Bulletin #950, I said the prohibition was on stocks under $3/share; it is, in fact, $5.

This means, for example, that the bank will refuse to execute an order for Metella, as well as many other New York Stock Exchange-listed stocks, which is quite ludicrous. These are not “penny stocks,” as generally understood. As I wrote last time, there is no regulatory requirement or even guideline that justifies this.

So for the bank to state that they are making the changes “according to U.S. and Canadian regulations” is disingenuous. To make matters worse, various representatives of the bank have given contradictory (and false) reasons for the new rules. I would rather that they just said that they could not be bothered instead of making up excuses. I believe that I have exhausted this topic, so unless there is some new development, I simply refer you to what I have already written on the topic.

Value of Silicon Royalty Inside Altius

Q. Would you agree that Silicon Merlin accounts for something like 50% of Altius’ current market cap? — G.D., Fla.

A. The 1.5% royalty on Silicon-Merlin is now, by my estimates, Altius’ most valuable single asset, but, given the market cap of CA$1.2 billion, 50% is a little high in my view but not far off. I could see a valuation of up to $400 million or more. The question is whether another company would be willing to pay what Altius thinks it is worth. I suspect not. Royalty companies rarely pay full price for upside, while Altius sees additional certain upside. Imagine had the royalty been sold a couple of years ago when the resource was estimated at just 5 million ounces! It is now over 13 million.

Patience With Exploration Companies

Q. Many years ago, I bought Virginia as recommended. I remember holding it all the way on down to 25c. Sure was demoralizing. But I held on for the whole 12 (?) years and still have the shares today, re-investing after the takeover. I’ll do likewise with Midland. Is there still a major shortage of geologists or something? — P.L., Ill.

A. Thank you for your comments on Virginia and Midland. The truth is that exploration companies need a real discovery, and discoveries cannot be manufactured and certainly not on any timetable. Midland certainly has good management and geologists, it has a strong balance sheet, and it has multiple projects with potential, many with strong partners. That combination does not guarantee a discovery but it does give the company as good a shot as any. Even after a recent rally, the market is valuing Midland at just US$22 million, which is very low. Yes, there is still a shortage of geologists. It take years to work one’s way through school. And young people prepared to do the practical work, usually in inhospitable locations like steamy jungles or frigid, barren regions, are scarcer than they used to be.

Why Is the Uranium Price Down?

Q. I don’t understand why the uranium price is down so much. I read it was now at its lowest price in 18 months. I don’t see any news to account for this. The move towards using more nuclear energy seems on track. — W.W., Md.

A. You are correct that the long-term fundamentals of the market appear on track and the price decline over the past year from $95 to $65 a pound suggests something is happening.

First, it should be noted that it is the spot price that has collapsed, not the long-term contract pricing which accounts for most pounds bought and sold. The spot price can be volatile based on short-term factors.

In this case, apparently a fund (in Kazakhstan) that stored physical uranium was forced to liquidate selling on the spot market. We do not know how much material remains to be sold. But the broader issue, according to my friend and uranium expert Lobo Tiggre, could be repeated talk by President Trump about denuclearization. The last time the super powers decommissioned nuclear warheads, in the late 1980s, it was follow by a sustained period of low uranium prices.

Lobo thinks that any new “Megatons to Megawatts program” would take “many years and be relatively small in scope.” Meanwhile, demand for uranium continues to increase. The administration has included uranium in its list of critical minerals subject to expedited permitting; see below. This could mean an increase in U.S. production, though for now, I think the safest bet on uranium is the Sprott Physical Uranium Trust (U-U, Toronto, 21.22). I would prefer to buy on weakness after a nearly 10% rally in the last week.

Is the Climate for Mining in Mexico Improving?

Q. You recently mentioned that some new mine permits had been granted in Mexico after the last anti-mine government. Was this a one-off, or is the situation improving? — S.G., Calif.

A. Several permits have been granted recently, including Alamos Gold Inc.’s (AGI:TSX; AGI:NYSE) high-profile Puerto Del Aire, so this is definitely a move in the right direction. Mostly these are for existing development projects or re-starts. Heliostar Metals Ltd. (HSTR:TSX.V; HSTXF:OTC; RGG1:FRA) is up 20% since I recommended then, in early February. The new government of Claudia Sheinbaum has said that it is committed to accelerating new mining projects, and plans to publish a new regulatory framework in June, prepared in conjunction with the Chamber of Mines, which will provide more clarity.

However, it has also said that open-pit mines will not be covered in this document, but, in stating that upcoming legislation would not ban open-pit mines, the Mines Minister left the door open for later. The goal of the new framework will not be to weaken social licenses for new projects but to remove bureaucratic logjams. The Minister, in a talk at PDAC earlier this month, said that permits for several key projects were expected in coming months.

MAR-A-LAGO My last article on the so-called Mar-A-Lago Accord generated much response. I was particularly pleased that some colleagues in the business praised the article, one calling it “brilliant (with) great insights” and the other said it “addressed a most important topic in a way that few have chosen to consider, or at least not in the thoughtful manner that you did.” Very generous words from two people whom I admire a lot. Thank you guys!

The US Aims To Boost Mineral Production With Speedy Decisions

Somewhat connected, President Trump invoked Emergency Powers to boost U.S. production of critical minerals. Other countries, including Canada, have issued various regulations to increase domestic production of critical minerals, in an effort to wean them away from dependence on China. Critical minerals covered by the U.S. order will include uranium, copper, potash, and gold “and any other material as determined by the chairman of the newly-created National Energy Dominance Council (NEDC).”

Trump’s edict requires each department and agency involved in mine permitting, within 10 days, to provide a list of all project for which a plan, a permit application, or other application has been submitted. Within another 10 days, each agency, in conjunction with the NEDC, “must identify projects that can be immediately approved or for which permits can immediately be issued.” If those timelines are met, never in the history of government will a bureaucracy have moved so fast! Among projects with pending permits that could benefit are Ivanhoe Electric and Dakota Gold, two companies we like.

Dakota Gold Corp. (DC:NYSE American) after a large overnight equity raise, is a particularly good buy. President and CEO is Robert Quartermain, who had successes with Silver Standard and Pretium Resources. The company is attempting to redevelop the old Homestake Mine, as well as nearby deposits.

WHAT TOOK YOU SO LONG? Finally, last week, the VanEck Gold Miners ETF (GDX) reported net inflows, of just $6.4 million. This was the first net inflow reported this year, and flows subsequently turned negative again. In all, the fund has seen a total of $1.72 billion in net outflows this year. VanEck has still not reported a single day of net inflows for the sister “junior” fund, GDXJ; net inflows were last reported for that fund on August 12. While somewhat amazing and distressing, from a contrarian perspective it offers hope.

THE FED TURNS AGAIN There were a few noteworthy observations from the Federal Reserve’s latest meeting statement and chairman Jerome Powell’s subsequent press conference. It was amusing that so many of the press questioners felt obliged to toss in some anti-Trump comment (“government by tweet,” “the courts have ruled against. . . “, and so on). Powell refused to take the bait and kept his answers on monetary policy. Most important, though, was the reduction in the pace of the roll-off from the Fed’s balance sheet, down from an already-cut $25 billion a month to just $5 billion, what Bill Fleckenstein calls “a rounding error.”

Note that the Fed’s balance sheet stands at $6.76 trillion after three years of QT. That’s an “E” for effort. Even now, the Fed’s balance sheet remains up over 60% from the eve of Covid. The run-off in Mortgage Backed Securities will continue as before, so the entire reduction in QT is from Treasuries. Worse, any “excess” roll-off in MBSs will be reinvested into Treasuries. Powell was at pains repeatedly to say that nothing should be read into this. It was to do with money markets, he said, or maybe to do with the debt ceiling, but “don’t take any signal from it.” Baloney! This move is clearly to help the long-term Treasury market which already has few buyers at current rates. In my view, it is a precursor to the a new round of QE from the Fed, likely later this year. It won’t be called QE, but that is what it will be.

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Important Disclosures:

1. Dakota Gold Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Dakota Gold Corp., Orogen Royalties Inc., Altius Minerals Corp., Heliostar Metals Ltd., and Metalla Royalty & Streaming.
3. Adrian Day: I, or members of my immediate household or family, own securities of: All. My company has a financial relationship with: All. I determined which companies would be included in this article based on my research and understanding of the sector.
4. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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Adrian Day’s Global Analyst is distributed for $990 per year by Investment Consultants International, Ltd., P.O. Box 6644, Annapolis, MD 21401. (410) 224-8885. www.AdrianDayGlobalAnalyst.com. Publisher: Adrian Day. Owner: Investment Consultants International, Ltd. Staff may have positions in securities discussed herein. Adrian Day is also President of Global Strategic Management (GSM), a registered investment advisor, and a separate company from this service. In his capacity as GSM president, Adrian Day may be buying or selling for clients securities recommended herein concurrently, before or after recommendations herein, and may be acting for clients in a manner contrary to recommendations herein. This is not a solicitation for GSM. Views herein are the editor’s opinion and not fact. All information is believed to be correct, but its accuracy cannot be guaranteed. The owner and editor are not responsible for errors and omissions. © 2023. Adrian Day’s Global Analyst. Information and advice herein are intended purely for the subscriber’s own account. Under no circumstances may any part of a Global Analyst e-mail be copied or distributed without prior written permission of the editor. Given the nature of this service, we will pursue any violations aggressively.

( Companies Mentioned: OGN:TSX.V, )

Source: https://www.streetwisereports.com/article/2025/03/31/another-year-of-record-revenue-for-orogen.html