TSXV:OGN
January 19, 2021

How does Orogen find new gold targets?

Orogen combines new innovative technologies with a mineral systems approach to identify discovery opportunities. Orogen focuses their efforts on new projects in “Elephant Country” to increase the odds of identifying large new mineral deposits.

The “Elephant Country” Strategy

Your best chance of discovering a “jackpot” deposit is by exploring in an area which is known to have world-class deposits. These deposits typically occur in clusters or mineral belts with certain common geologic characteristics. Orogen currently controls projects in multiple world class jurisdictions including:

The Golden Triangle - This region is home to some of the richest gold ore bodies in the world, as well as abundant silver, nickel, and copper deposits. Orogen’s Ball Creek project covers 524 km2 of prospective terrain in this jurisdiction with four outcropping porphyry centers.

Golden Triangle in British Columbia, Orogen Royalties
Ball Creek project in the Golden Triangle, British Columbia, Orogen Royalties

Central Nevada’s Carlin Camp – This portion of northern Nevada hosts greater than 250 million ounces of gold, making it one of the leading gold producers in the world. The majority of the gold produced comes from two main trends; the Carlin trend and the Battle Mountain-Eureka trend.  Orogen controls multiple projects within these trends including the Maggie Creek and Diamond Point projects located in the Carlin trend and the Ecru project in the Battle Mountain-Eureka trend.

There are some benefits to adopting the “Elephant Country” strategy:

●      Scientific advancements on adjacent ore deposits help develop new exploration targets

●      High quality regional data sets are often available to help targeting

●      Major mining companies are active in these jurisdictions and provide opportunities for collaboration and joint ventures

The “Elephant Country” approach requires a company to have financial capability and commercial skills to acquire ground in a competitive environment. Orogen’s organic royalty generation platform provides long term exploration funding through royalty revenue and joint venture partnerships, which allows the company to acquire and advance these projects systematically over time.  Multi-year exploration programs allow Orogen to select the best possible, yet affordable, ground at the district scale in “Elephant Country”.

The ‘Explorability’ Challenge

Most of our partners are looking for large mineral systems with multi-million-ounce potential. When we organize exploration projects, we think BIG, as larger volumes can leverage high development, operation and production costs.

The main challenge is that it is getting harder and harder to find new mineral deposits, let alone large multi-million-ounce ones.

Most producing companies look for at least 1 or 2 million ounces of gold (about 200,000 ounces mined a year, over a decade) or 500,000 tonnes of copper, along with decent grades. Sometimes, small deposits may be considered if the grade is identified as higher than a gram per tonne. Why is this? When gold ore has a high grade, it takes relatively less effort to extract an ounce of gold from the ground and, since less ore has to be dug out, it reduces the input costs for the gold mining company. Furthermore, the World Gold Council defines a high-quality underground mine as having a gold ore density between 8 and 10 grams per tonne. Open-pit mines tend to have a lower grade, but they can be considered very valuable because of the lower average operating costs necessary to develop them. Underground mines incur higher extraction costs such as the need for large ventilation systems but are often less sensitive to gold price due to their high grades. Case in point, the following chart from Reid 2020 (GSN symposium publication) shows that the most recent gold discoveries in Nevada are concealed, or under cover:

Resources:

https://www.bcbusiness.ca/Enter-the-Golden-Triangle

J. M. A. Hronsky & D. I. Groves (2008) Science of targeting: definition, strategies, targeting and performance measurement, Australian Journal of Earth Sciences, 55:1, 3-12, DOI: 10.1080/08120090701581356

Information announced by First Majestic on March 30, 2020

Metal prices used by First Majestic for mineral resource estimates were US$18.50/oz silver and US$1,450/oz gold: https://www.firstmajestic.com/investors/news-releases/first-majestic-announces-high-grade-drill-results-from-its-2019-exploration-program-at-the-ermitao-project-within-the-santa-elena-land-package

Muntean 2020 PDAC presentation Carlin-Style Deposits in Nevada: Exploration Activity and Targeting Criteria

Reid, R., Johnson, C. and Ressel, M. 2020,  History of the Modern Gold Rush in Nevada, Geological Society of Nevada symposium 2020 proceedings