Triple Flag to acquire Orogen Royalties for $420M

Triple Flag Precious Metals (TSX: TFPM; NYSE: TFPM) announced Tuesday that it has entered into an agreement to acquire Orogen Royalties (TSXV: OGN; US-OTC: OGNRF) in a transaction valued at about $421 million (US$305 million).

The acquisition will give Triple Flag access to a 1% net smelter return (NSR) royalty on the Expanded Silicon gold project in Nevada. Owner AngloGold Ashanti (NYSE: AU) considers it one of the most significant new gold discoveries in the United States in over a decade.

Altius Minerals (TSX: ALS; US-OTC: ATUSF) owns 19.6% of Orogen and in January won a partial arbitration ruling concerning a 2015 royalty agreement with AngloGold Ashanti. The panel said the agreement not only includes the entire 26.6-sq-km base area of interest, but also certain contiguous and adjacent lands that extend beyond the area.

Shares of Orogen rose 28% on Tuesday afternoon in Toronto to $1.86 apiece, bringing the company’s market capitalization to $375 million. Altius added 4.2% to $20.53. Triple Flag stock fell 0.4% to $30.70 each for a company market value of $6.16 billion. 

Nevada asset

The Expanded Silicon project is located in Nevada’s Beatty District and includes the Merlin and Silicon deposits. The royalty covers 74 sq. km and comes with no caps, step-downs, or buydown provisions.

The resource has expanded since AngloGold began drilling at the site in 2018. As of Dec. 31, the Merlin deposit contained 355 million inferred tonnes grading 1.06 grams gold per tonne for 12.1 million oz. contained metal. The Silicon deposit hosts 121 million tonnes grading 0.87 gram gold in the indicated category, plus 36 million tonnes grading 0.7 gram in the inferred category.

In total, 430 km have been drilled at Expanded Silicon to date, including 132 km at Merlin in 2024. The project has potential for heap leach and milling processing, AngloGold says. 

Orogen spinout

As part of the deal, a new entity — named Orogen Spinco for now and to be led by Orogen CEO Paddy Nicol — will be created to hold all of Orogen’s other mineral interests, excluding the Expanded Silicon NSR royalty. The spinoff has an implied value of $78 million, according to investment bank Raymond James. 

Altius has agreed to support the deal subject to certain conditions including an ability to rescind its support if a superior offer is received prior to closing, which is expected in this year’s third quarter, Raymond James mining analyst Brian MacArthur said on Tuyesday.

“Of note, Orogen Spinco will hold all of Orogen’s mineral interests except for the 1% Expanded Silicon NSR royalty implying the transaction valued the 1% Expanded Silicon NSR royalty at about $343 million,”MacArthur said in a note. “Altius will maintain exposure to the new Silicon gold district discoveries in Nevada through a significant shareholding in Triple Flag as well as through its own separate 1.5% NSR royalty.”

Triple Flag has also committed to a $10-million equity investment in Orogen Spinco, securing about 11% upon its public debut.

Triple Flag and Orogen have also agreed to explore a generative exploration alliance focused on the western United States. Backed by an initial budget of US$435,000, the initiative will aim to identify gold and silver targets geologically similar to the Expanded Silicon asset.