Osisko Gold Royalties Ltd (the “Corporation” or “Osisko”) (OR: TSX & NYSE) today announced its consolidated financial results for the second quarter of 2023. Amounts presented are in Canadian dollars, except where otherwise noted.

Highlights – Second Quarter of 2023

  • 24,645 GEOs1 earned, an increase of 11% over the second quarter of 2022 (Q2 2022 – 22,243);
  • Revenues from royalties and streams of $60.5 million (Q2 2022 - $51.5 million);
  • Cash flows generated by operating activities2 of $47.4 million (Q2 2022 - $35.0 million);
  • Cash margin3 of $56.2 million or 93% (Q2 2022 – $47.8 million or 93%);
  • Net earnings2 of $18.0 million, $0.10 per basic share (Q2 2022 – $18.1 million, $0.10 per basic share);
  • Adjusted earnings3 of $32.6 million, $0.18 per basic share (Q2 2022 – $25.7 million, $0.14 per basic share);
  • Publication of the 2023 Asset Handbook and third edition of the Company’s sustainability report, Growing Responsibly;
  • Closing of the CSA silver and copper streams by Osisko Bermuda Limited for US$150.0 million;
  • Amendment of the Gibraltar silver stream for US$10.25 million; and
  • Declaration of a quarterly dividend of $0.06 per common share, an increase of 9% over the previous quarter, paid on July 14, 2023 to shareholders of record as of the close of business on June 30, 2023.

Paul Martin, Interim CEO of Osisko commented: “Despite challenges faced by our operating partners who were temporarily impacted by the wildfires in northern Ontario and Québec, Osisko delivered a solid second quarter. As we head into the second half of the year, we are well positioned to meet our 2023 guidance. Osisko remained very active on the corporate development front in the second quarter, having closed the CSA transaction, including the full copper stream which comes into effect in June 2024, and the announced increase to our silver stream at Taseko’s Gibraltar mine. Following the quarter, the Company announced the acquisition of copper and gold royalties at Hot Chili’s Costa Fuego project”.

Subsequent to June 30, 2023

  • Closing of the gold and copper royalty investment in relation to the Costa Fuego Project; and
  • Declaration of a quarterly dividend of $0.06 per common share payable on October 16, 2023 to shareholders of record as of the close of business on September 29, 2023.

Q2 2023 RESULTS CONFERENCE CALL AND WEBCAST DETAILS

Osisko provides notice of its second quarter 2023 results conference call and webcast details.

Results Release: Wednesday, August 9th, 2023 after market close
   
Conference Call: Thursday, August 10th, 2023 at 10:00 am ET
   
Dial-in Numbers (option 1):   North American Toll-Free: 1 (888) 886 7786
Local and International: 1 (416) 764 8658
Conference ID: 63806714  
   
Webcast link (option 2): https://viavid.webcasts.com/starthere.jsp?ei=1627532&tp_key=ca8800f4ff
   
Replay (available until Sunday, September 10th at 11:59 pm ET): North American Toll-Free: 1 (877) 674 7070
Local and International: 1 (416) 764 8692
Playback Passcode: 806714#  
   
  Replay also available on our website at www.osiskogr.com
   

Qualified Person

The scientific and technical content of this news release has been reviewed and approved by Guy Desharnais, Ph.D., P.Geo., Vice President, Project Evaluation at Osisko Gold Royalties Ltd, who is a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).

About Osisko Gold Royalties Ltd

Osisko Gold Royalties Ltd is an intermediate precious metal royalty company which holds a North American focused portfolio of over 180 royalties, streams and precious metal offtakes. Osisko’s portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, one of Canada’s largest gold mines.

Osisko’s head office is located at 1100 Avenue des Canadiens-de-Montréal, Suite 300, Montréal, Québec, H3B 2S2.

For further information, please contact Osisko Gold Royalties Ltd:

Grant Moenting  Heather Taylor
Vice President, Capital Markets Vice President, Sustainability and Communications
Tel: (514) 940-0670 x116  Tel: (514) 940-0670 x105
Email: gmoenting@osiskogr.com Email: htaylor@osiskogr.com
   

Notes:

(1) Gold Equivalent Ounces

GEOs are calculated on a quarterly basis and include royalties, streams and offtakes. Silver earned from royalty and stream agreements are converted to gold equivalent ounces by multiplying the silver ounces earned by the average silver price for the period and dividing by the average gold price for the period. Diamonds, other metals and cash royalties are converted into gold equivalent ounces by dividing the associated revenue earned by the average gold price for the period.

Average Metal Prices and Exchange Rate

  Three months ended June 30,   Six months endedJune 30,
  2023 2022   2023 2022
           
Gold(i) $1,976 $1,871   $1,932 $1,874
Silver(ii) $24.13 $22.60   $23.31 $23.32
           
Exchange rate (US$/Can$)(iii) 1.3428 1.2768   1.3477 1.2715

           

  (i) The London Bullion Market Association’s PM price in U.S. dollars.
  (ii) The London Bullion Market Association’s price in U.S. dollars.
  (iii) Bank of Canada daily rate.
     

(2) From continuing operations

(3) Non-IFRS Measures

The Corporation has included certain performance measures in this press release that do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS) including (i) cash margin (in dollars and in percentage), (ii) adjusted earnings and (iii) adjusted earnings per share. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. As Osisko’s operations are primarily focused on precious metals, the Corporation presents cash margins and adjusted earnings as it believes that certain investors use this information, together with measures determined in accordance with IFRS, to evaluate the Corporation’s performance in comparison to other companies in the precious metals mining industry who present results on a similar basis. However, other companies may calculate these non-IFRS measures differently.

Cash Margin (in dollars and in percentage of revenues)

Cash margin (in dollars) represents revenues from continuing operations less cost of sales (excluding depletion). Cash margin (in percentage of revenues) represents the cash margin (in dollars) divided by revenues from continuing operations.

  Three months endedJune 30,     Six months endedJune 30,  
  2023     2022     2023     2022  
  $     $     $     $  
                       
Royalty interests                      
Revenues 39,323     34,583     78,501     69,572  
Less: cost of sales (excluding depletion) (205 )   (188 )   (340 )   (282 )
Cash margin (in dollars) 39,118     34,395     78,161     69,290  
                       
Depletion (5,610 )   (6,202 )   (12,458 )   (13,057 )
Gross profit 33,508     28,193     65,703     56,233  
                       
Stream interests                      
Revenues 21,177     16,962     41,586     32,662  
Less: cost of sales (excluding depletion) (4,055 )   (3,568 )   (7,961 )   (6,655 )
Cash margin (in dollars) 17,122     13,394     33,625     26,007  
                       
Depletion (7,357 )   (5,649 )   (14,004 )   (10,092 )
Gross profit 9,765     7,745     19,621     15,915  
                       
Royalty and stream interests                      
Total cash margin (in dollars) 56,240     47,789     111,786     95,297  
Divided by: total revenues 60,500     51,545     120,087     102,234  
Cash margin (in percentage of revenues) 93.0 %   92.7 %   93.1 %   93.2 %
                       
Total – Gross profit 43,273     35,938     85,324     72,148  
                       

Adjusted earnings and adjusted earnings per basic share

Adjusted earnings is defined as: net earnings (loss) adjusted for certain items: foreign exchange gain (loss), impairment of assets (including impairment on financial assets and investments in associates), gains (losses) on disposal of assets, unrealized gain (loss) on investments, share of income (loss) of associates, deferred income tax expense (recovery), transaction costs and other items such as non-cash gains (losses).

Adjusted earnings per basic share is obtained from the adjusted earnings divided by the weighted average number of common shares outstanding for the period.

  Three months endedJune 30,   Six months endedJune 30,  
  2023   2022   2023   2022  
(in thousands of dollars, except per share amounts) $   $   $   $  
                 
Net earnings from continuing operations 17,961   18,059   38,809   34,863  
                 
Adjustments:                
Impairment of royalty interests 6,629   -   6,629   -  
Expected credit loss on other investments 19,860   384   20,131   904  
Foreign exchange loss (gain) 9   (7,593 ) 25   (8,469  )
Unrealized net loss on investments 4,066   5,574   1,969   11,414  
Share of (income) loss of associates (19,167 ) 1,078   (13,022 ) (1,526 )
Deferred income tax expense 3,270   8,214   10,730   13,373  
                 
Adjusted earnings 32,628   25,716   65,271   50,559  
                 
Weighted average number of common shares outstanding (000’s) 185,302   185,316   184,990   176,182  
                 
Adjusted earnings per basic share 0.18   0.14   0.35   0.29  
                 

Forward-looking Statements

Certain statements contained in this press release may be deemed "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements in this press release, forward-looking statements are statements other than statements of historical fact, that address, without limitation, future events, production estimates of Osisko’s assets (including increase of production), timely developments of mining properties over which Osisko has royalties, streams, offtakes and investments, management’s expectations regarding Osisko’s growth, results of operations, estimated future revenues, production costs, carrying value of assets, ability to continue to pay dividend, requirements for additional capital, business prospects and opportunities future demand for and fluctuation of prices of commodities (including outlook on gold, silver, diamonds, other commodities) currency markets and general market conditions. In addition, statements and estimates (including data in tables) relating to mineral reserves and resources and gold equivalent ounces are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates will be realized. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions or variations (including negative variations), or that events or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, most of which are beyond the control of Osisko, and actual results may accordingly differ materially from those in forward-looking statements. Such risk factors include, without limitation, (i) with respect to properties in which Osisko holds a royalty, stream or other interest; risks related to: (a) the operators of the properties, (b) timely development, permitting, construction, commencement of production, ramp-up (including operating and technical challenges), (c) differences in rate and timing of production from resource estimates or production forecasts by operators, (d) differences in conversion rate from resources to reserves and ability to replace resources, (e) the unfavorable outcome of any challenges or litigation relating title, permit or license, (f) hazards and uncertainty associated with the business of exploring, development and mining including, but not limited to unusual or unexpected geological and metallurgical conditions, slope failures or cave-ins, flooding and other natural disasters or civil unrest or other uninsured risks; with respect to external factors: (a) fluctuations in the prices of the commodities that drive royalties, streams, offtakes and investments held by Osisko, (b) fluctuations in the value of the Canadian dollar relative to the U.S. dollar, (c) regulatory changes by national and local governments, including permitting and licensing regimes and taxation policies; regulations and political or economic developments in any of the countries where properties in which Osisko holds a royalty, stream or other interest are located or through which they are held, (d) continued availability of capital and financing and general economic, market or business conditions, and (e) responses of relevant governments to the COVID-19 outbreak and the effectiveness of such response and the potential impact of COVID-19 on Osisko’s business, operations and financial condition; with respect to internal factors: (a) business opportunities that may or not become available to, or are pursued by Osisko or (b) the integration of acquired assets. The forward-looking statements contained in this press release are based upon assumptions management believes to be reasonable, including, without limitation: the absence of significant change in the Corporation’s ongoing income and assets relating to determination of its Passive Foreign Investment Company ("PFIC”) status; the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated or intended and, with respect to properties in which Osisko holds a royalty, stream or other interest, (i) the ongoing operation of the properties by the owners or operators of such properties in a manner consistent with past practice and with public disclosure (including forecast of production), (ii) the accuracy of public statements and disclosures made by the owners or operators of such underlying properties (including expectations for the development of underlying properties that are not yet in production), (iii) no adverse development in respect of any significant property, (iv) that statements and estimates relating to mineral reserves and resources by owners and operators are accurate and (v) the implementation of an adequate plan for integration of acquired assets.

For additional information on risks, uncertainties and assumptions, please refer to the most recent Annual Information Form of Osisko filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov which also provides additional general assumptions in connection with these statements. Osisko cautions that the foregoing list of risk and uncertainties is not exhaustive. Investors and others should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Osisko believes that the assumptions reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be accurate as actual results and prospective events could materially differ from those anticipated such the forward-looking statements and such forward-looking statements included in this press release are not guarantee of future performance and should not be unduly relied upon. These statements speak only as of the date of this press release. Osisko undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.

Osisko Gold Royalties Ltd
Consolidated Balance Sheets
As at June 30, 2023 and December 31, 2022
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars)
 
  June 30,     December 31,  
  2023     2022  
  $     $  
       
Assets      
       
Current assets      
       
Cash 70,033     90,548  
Short-term investments 3,732     -  
Amounts receivable 5,505     11,700  
Other assets 4,619     2,546  
  83,889     104,794  
       
Non-current assets      
       
Investments in associates 324,411     319,763  
Other investments 116,108     73,504  
Royalty, stream and other interests 1,546,181     1,378,253  
Goodwill 111,204     111,204  
Other assets 9,335     8,783  
  2,191,128     1,996,301  
       
Liabilities      
       
Current liabilities      
       
Accounts payable and accrued liabilities 6,626     6,825  
Dividends payable 11,103     10,121  
Lease liabilities 1,112     921  
  18,841     17,867  
       
Non-current liabilities      
       
Lease liabilities 7,420     6,701  
Long-term debt 319,650     147,950  
Deferred income taxes 97,120     86,572  
  443,031     259,090  
       
Equity      
       
Share capital 2,092,786     2,076,070  
Contributed surplus 76,029     77,295  
Accumulated other comprehensive income 26,963     47,435  
Deficit (447,681 )   (463,589 )
  1,748,097     1,737,211  
  2,191,128     1,996,301  

 

Osisko Gold Royalties Ltd
Consolidated Statements of Income
For the three and six months ended June 30, 2023 and 2022
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)
 
  Three months endedJune 30,     Six months endedJune 30,  
  2023     2022     2023     2022  
  $     $     $     $  
               
Revenues 60,500     51,545     120,087     102,234  
               
Cost of sales (4,260 )   (3,756 )   (8,301 )   (6,937 )
Depletion (12,967 )   (11,851 )   (26,462 )   (23,149 )
Gross profit 43,273     35,938     85,324     72,148  
               
Other operating expenses              
General and administrative (7,308 )   (4,940 )   (13,517 )   (9,776 )
Business development (1,297 )   (1,260 )   (2,793 )   (2,681 )
Impairment of royalty interests (6,629 )   -     (6,629 )   -  
Operating income 28,039     29,738     62,385     59,691  
Interest income 2,170     1,858     4,233     2,966  
Finance costs (3,445 )   (5,543 )   (6,315 )   (11,469 )
Foreign exchange (loss) gain (172 )   7,711     (153 )   8,529  
Share of income (loss) of associates 19,167     (1,078 )   13,022     1,526  
Other losses, net (23,926 )   (5,958 )   (22,100 )   (12,318 )
Earnings before income taxes 21,833     26,728     51,072     48,925  
Income tax expense (3,872 )   (8,669 )   (12,263 )   (14,062 )
Net earnings from continuing operations 17,961     18,059     38,809     34,863  
Net loss from discontinued operations -     (1,487 )   -     (23,820 )
Net earnings 17,961     16,572     38,809     11,043  
               
Net earnings (loss) attributable to:              
Osisko Gold Royalties Ltd’s shareholders 17,961     17,159     38,809     17,485  
Non-controlling interests -     (587 )   -     (6,442 )

 

 

Osisko Gold Royalties Ltd
Consolidated Statements of Cash Flows
For the three and six months ended June 30, 2023 and 2022
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars)
 
  Three months endedJune 30,     Six months endedJune 30,  
  2023     2022     2023     2022  
  $     $     $     $  
                       
Operating activities                      
Net earnings from continuing operations 17,961     18,059     38,809     34,863  
Adjustments for:                      
Share-based compensation 2,868     1,208     5,157     2,958  
Depletion and amortization 13,271     12,112     27,025     23,685  
Impairment of royalty interests 6,629     -     6,629     -  
Expected credit losses of other investments 19,860     384     20,131     904  
Finance costs 124     1,804     247     3,502  
Share of (income) loss of associates (19,167 )   1,078     (13,022 )   (1,526 )
Net gain on acquisition of investments -     (48 )   -     (48 )
Change in fair value of financial assets at fair value through profit and loss 1,009     7,118     3,754     15,066  
Net gain on dilution of investments -     (1,544 )   (4,842 )   (3,604 )
Loss on the deemed disposal of an associate 3,057     -     3,057     -  
Foreign exchange loss (gain) 9     (7,593 )   25     (8,469 )
Deferred income tax expense 3,270     8,214     10,730     13,373  
Other 323     78     236     58  
Net cash flows provided by operating activities before changes in non-cash working capital items 49,214     40,870     97,936     80,762  
Changes in non-cash working capital items (1,822 )   (5,905 )   (5,094 )   (5,290 )
Net operating cash flows provided by continuing operations 47,392     34,965     92,842     75,472  
Net operating cash flows used by discontinued operations -     (35,189 )   -     (52,086 )
Net cash flows provided (used) by operating activities 47,392     (224 )   92,842     23,386  
                       
Investing activities                      
Acquisitions of short-term investments (2,154 )   -     (3,797 )   -  
Acquisitions of investments (53,008 )   (384 )   (53,279 )   (6,680 )
Proceeds on disposal of investments 6     2,960     6     2,960  
Acquisitions of royalty and stream interests (212,762 )   -     (212,762 )   (9,290 )
Other (6 )   (3 )   (6 )   (3 )
Net investing cash flows (used) provided by continuing operations (267,924 )   2,573     (269,838 )   (13,013 )
Net investing cash flows used by discontinued operations -     (97,759 )   -     (94,445 )
Net cash flows used in investing activities (267,924 )   (95,186 )   (269,838 )   (107,458 )
                       
Financing activities                      
Bought deal equity financing -     -     -     311,962  
Share issue costs -     (1,125 )   -     (13,941 )
Increase in long-term debt 186,909     -     186,909     -  
Repayment of long-term debt, net of discount on banker’s acceptances -     (113,120 )   (13,463 )   (113,120 )
Exercise of share options and shares issued under the share purchase plan 1,662     312     10,562     934  
Normal course issuer bid purchase of common shares -     -     -     (4,879 )
Dividends paid (9,292 )   (9,755 )   (19,045 )   (18,478 )
Withholding taxes on settlement of restricted and deferred share units (3,893 )   (1,800 )   (4,349 )   (2,224 )
Other (234 )   (217 )   (446 )   (431 )
Net financing cash flows provided (used) by continuing operations 175,152     (125,705 )   160,168     159,823  
Net financing cash flows provided by discontinued operations -     210,225     -     247,362  
Net cash flows provided by financing activities 175,152     84,520     160,168     407,185  
                       
(Decrease) increase in cash before effects of exchange rate changes on cash (45,380 )   (10,890 )   (16,828 )   323,113  
Effects of exchange rate changes on cash                      
Continuing operations (3,671 )   8,500     (3,687 )   8,408  
Discontinued operations -     2,223     -     2,064  
(Decrease) increase in cash (49,051 )   (167 )   (20,515 )   333,585  
Cash – beginning of period 119,084     449,450     90,548     115,698  
Cash – end of period 70,033     449,283     70,033     449,283  
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