News

Osisko Reports Q2 2023 Results

Strong cash margin of $56.2 million and operating cash flows of $47.4 million

Montréal, August 9, 2023 – Osisko Gold Royalties Ltd (the “Corporation” or “Osisko”) (OR: TSX & NYSE - https://www.commodity-tv.com/ondemand/companies/profil/osisko-gold-royalties-ltd/) 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: [email protected]                 Email: [email protected]

 

In Europe:

Swiss Resource Capital AG

Jochen Staiger

[email protected]

www.resource-capital.ch

 

Notes:

 

  • 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 ended

June 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

 

  • The London Bullion Market Association’s PM price in U.S. dollars.
  • The London Bullion Market Association’s price in U.S. dollars.
  • Bank of Canada daily rate.
  • From continuing operations
  • 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 ended

June 30,

 

Six months ended 

June 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 

99

 

 

 

 

 

 

 

 

 

 

 

 

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 ended 

June 30,

Six months ended 

June 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.

 

 

 

 

 

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 

 

 

 

 

Three months ended

June 30,

 

Six months ended

June 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)

 

 

 

 

 

Three months ended

June 30,

 

Six months ended

June 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)

 

 

 

(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

 

 

 

2,960 

 

 

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 

 

 

Danke für das Teilen!