Orogen Royalties Announces Profitable Quarter and Strong Cashflow for Q2-2023 - Seite 2

Summary of Results

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First Majestic Silver Corp. ("First Majestic") operates the Ermitaño mine, where the Company holds a 2.0% net smelter return ("NSR") royalty. For the current quarter, the Company recorded $1,178,941 in royalty revenue consisting of 435 GEOs. Production at Ermitaño include 213,878 tonnes processed containing average gold and silver head grades of 3.12 grams per tonne ("g/t") and 39 g/t, respectively, producing 20,073 ounces gold and 142,037 ounces silver. Total GEOs produced attributable to the Company's NSR royalty decreased by 14% in the second quarter, due to lower gold grades compared to the previous quarter. However, both gold and silver recoveries achieved record highs in the second quarter averaging 94% and 52%, respectively, compared to 90% and 50% from the first quarter. These improvements in recovery were driven by investments made by First Majestic to improve plant performance when processing ore from Ermitaño. First Majestic forecasts production from Ermitaño to increase by 27% to between 48,000 to 53,000 ounces gold and 700,000 to 800,000 ounces silver for H2-2023.

During the current period, the Company incurred $956,030 (2022 - $875,220) in G&A expenses. This is an increase of 9% compared to the same period in 2022 and a reduction of 36% compared to the prior quarter. The reduction in G&A expenses was due to continued optimization of administrative functions and lower overhead costs, which were offset by higher stock-based compensation cost for long-term equity-based compensation vested during the period.

The Company capitalized $2,810,093 in acquisition and exploration expenditures from royalties and mineral property interests and recognized $238,261 in recoveries during the current period. During the quarter, the Company completed its first material royalty asset acquisition on the La Rica project located in Colombia. The Company acquired a 1.0% NSR royalty on the project by paying a cash consideration of US$1.75 million. The area of interest contains at least four undrilled copper-gold porphyry targets within a fifteen kilometre long trend of anomalous copper geochemistry on the western margin of the Mande Batholith. To date, the Company has 24 royalties in Canada, United States, Mexico, Argentina, Kenya, and Colombia, most of which were generated organically through the Company's prospect generation business. The Company also has 11 mineral properties under option, 8 projects that are available for sale or option and one alliance.