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Osisko Gold Royalties Ltd
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Shares Issued 166,825,193
Close 2020-11-09 C$ 15.16
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Osisko Gold earns $12.51-million in Q3

2020-11-09 18:58 ET - News Release

Mr. Sandeep Singh reports


Osisko Gold Royalties Ltd. has released its consolidated financial results for the third quarter of 2020.

Highlights (amounts in dollars, except otherwise noted):

  • Record revenues from royalties and streams of $41.2-million (Q3 2019: $33.9-million);
  • Record cash flows from operating activities of $36.1-million (Q3 2019: $28.3-million); $31.7-million before changes in non-cash working capital items (Q3 2019: $25.1-million);
  • Record cash operating margin (1) of 96.4 per cent from royalty and stream interests, generating $39.7-million in operating cash flow, in addition to a cash operating margin of $700,000 from offtake interests;
  • Earned 16,739 gold equivalent ounces (2) (Q3 2019: 18,123 GEOs);
  • Net earnings of $12.5-million, or eight cents per basic share (Q3 2019: net loss of $45.9-million, or 32 cents per basic share);
  • Adjusted earnings (3) of $17.5-million or 11 cents per basic share (Q3 2019: $17.5-million or 12 cents per basic share);
  • Cash on hand of $160.7-million and over $400.0-million further available under the credit facility as at Sept. 30, 2020;
  • Announced the spinout of mining assets and certain equity positions through a reverse takeover transaction and the creation of a North American gold development company, Osisko Development Corp., which in conjunction completed a $100-million bought deal financing;
  • The Canadian Malartic mine operators announced strong results from the drilling program at East Gouldie, which are expected to lead to a significant increase in the mineral resource estimate at year-end 2020; a preliminary economic assessment is also expected to be completed in early 2021, which may result in the start of mine shaft construction;
  • Acquired the San Antonio gold project in Mexico for $42-million (U.S.), which will be spin out to Osisko Development;
  • Acquired an additional 15-per-cent ownership in a Canadian precious metal royalty portfolio, including royalties on the Island Gold and Lamaque mines;
  • Announced that the Renard diamond mine, operated by Stornoway Diamonds Canada Inc., restarted operations in September, 2020;
  • Announced a strategic partnership with Regulus Resources Inc. whereby Regulus has agreed to grant Osisko an initial royalty and certain future royalty rights in exchange for an upfront cash payment of $12.5-million (U.S.) ($16.6-million);
  • Commercial production was declared by the operator of the Eagle Gold mine on July 1, 2020, on which the company holds a 5-per-cent NSR (net smelter return) royalty;
  • Declared a quarterly dividend of five cents per common share, paid on Oct. 15, 2020, to shareholders of record as of the close of business on Sept. 30, 2020.

Sandeep Singh, president of Osisko, commented on the activities of the third quarter of 2020: "We had a very strong third quarter with production rebounding well and other significant catalysts. The spinout transaction announced on Oct. 5 is an important strategic milestone for the company. It greatly simplifies Osisko into a pure play royalty and streaming company, while maintaining exposure to the company-making assets contributed to Osisko Development. Our cornerstone Canadian Malartic royalty continues to create significant value for our shareholders as the joint venture partnership makes significant strides towards an underground development decision. We anticipate a continued upward trend in GEO deliveries in the fourth quarter, and we believe that we are in excellent position to meet our forecast for the second half of 2020."

Q3 2020 results conference call

Osisko will host a conference call on Nov. 10, 2020, at 10 a.m. EST, to review and discuss its third quarter 2020 results.

Those interested in participating in the conference call should dial in at 1-877-223-4471 (North American toll-free) or 1-647-788-4922 (international). An operator will direct participants to the call.

The conference call replay will be available from 1 p.m. EST on Nov. 10, 2020, until 11:59 p.m. EST on Nov. 24, 2020, with the following dial-in numbers: 1-800-585-8367 (North American toll-free) or 1-416-621-4642, access code 4896403. The replay will also be available on the company's website.

About Osisko Gold Royalties Ltd.

Osisko Gold Royalties is an intermediate precious metal royalty company focused on the Americas that commenced activities in June, 2014. Osisko holds a North American-focused portfolio of over 138 royalties, streams and precious metal offtakes. Osisko's portfolio is anchored by its cornerstone asset, a 5-per-cent net smelter return royalty on the Canadian Malartic mine, which is the largest gold mine in Canada. Osisko also owns the Cariboo gold project in Canada, as well as a portfolio of publicly held resource companies, including a 14.6-per-cent interest in Osisko Mining Inc., a 17.8-per-cent interest in Osisko Metals Inc. and an 18.3-per-cent interest in Falco Resources Ltd. On Oct. 5, 2020, Osisko Gold Royalties announced the spinout of mining assets and the creation of Osisko Development Corp., a premier North American gold development company. This transaction is expected to close in the fourth quarter of 2020.

Osisko's head office is located at 1100 Avenue des Canadiens-de-Montreal, Suite 300, Montreal, Que., H3B 2S2.

                              CONSOLIDATED STATEMENTS OF INCOME (LOSS) 
                (amounts expressed in thousands of dollars, except per-share amounts)
                                                           Three months ended           Nine months ended
                                                                Sept. 30,                   Sept. 30,
                                                           2020          2019          2020          2019

Revenues                                                $55,707      $109,235      $149,070      $341,567
Cost of sales                                           (15,236)      (77,419)      (45,464)     (247,616)
Depletion of royalty, stream and other interests         (9,665)      (10,965)      (32,057)      (35,166)
                                                      ---------     ---------     ---------     ---------
Gross profit                                             30,806        20,851        71,549        58,785
Other operating expenses
General and administrative                               (5,957)       (4,559)      (18,059)      (15,034)
Business development                                     (1,910)       (1,375)       (4,682)       (4,899)
Gain on disposal of an offtake interest                       -         7,636             -         7,636
Exploration and evaluation                                  (32)          (48)         (108)         (139)
Impairment of assets                                          -       (60,800)      (26,300)      (99,700)
                                                      ---------     ---------     ---------     ---------
Operating income (loss)                                  22,907       (38,295)       22,400       (53,351)
Interest and dividend income                              1,327         1,091         3,523         3,183
Finance costs                                            (6,440)       (5,843)      (19,938)      (17,382)
Foreign exchange (loss) gain                               (419)          508         1,299        (1,104)
Share of (loss) of associates                              (760)       (4,146)       (3,934)      (14,688)
Other gains (losses), net                                    27       (10,971)       11,462       (16,304)
                                                      ---------     ---------     ---------     ---------
Earnings (loss) before income taxes                      16,642       (57,656)       14,812       (99,646)
Income tax (expense) recovery                            (4,128)       11,732        (2,568)       20,626
                                                      ---------     ---------     ---------     ---------
Net earnings (loss)                                      12,514       (45,924)       12,244       (79,020)
                                                      ---------     ---------     ---------     ---------
Net earnings (loss) per share
Basic and diluted                                          0.08         (0.32)         0.08         (0.52)

We seek Safe Harbor.

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