Osisko Reports 2018 Results and Provides 2019 Guidance Record Geos of 80,553 and Cash Flows from Operating Activities of $82.2 Million IN 2018
1
OSISKO REPORTS 2018 RESULTS AND PROVIDES 2019 GUIDANCE
RECORD GEOs OF 80,553 AND
CASH FLOWS FROM OPERATING ACTIVITIES OF $82.2 MILLION IN 2018
Montréal, February 20, 2019 – Osisko Gold Royalties Ltd (the “ Company” or “Osisko”) (OR: TSX &
NYSE) today announced its consolidated financial results for the fourth quarter and full year ended
December 31, 2018 and provides guidance for 2019.
Highlights
• Earned 20,005 gold equivalent ounces1 (“GEOs”) in the fourth quarter, for record annual GEOs
of 80,553 in 2018, an increase of 37% compared to 2017;
• Generated cash flows from operating activities of $18.6 million for the quarter and $82.2 million
for the year 2018, an increase of 69% compared to 2017;
• Recorded adjusted earnings2 of $13.0 million, $0.08 per basic share2 ($31.4 million for the year
2018, $0.20 per basic share) , compared to $ 1.0 million, $0.01 per basic share in the fourth
quarter of 2017 ($22.7 million for the year 2017, $0.18 per basic share);
• Recorded cash operating margins 3 of 90% from royalt y and stream interests in the fourth
quarter and for the full year 2018, maintaining the highest margi n in the metals and mining
sector, generating $27.8 million in operating cash flow in the fourth quarter ($114.1 million for
the year 2018), in addition t o a quarterly cash operating margin of $ 0.9 million from offtake
interests in the fourth quarter ($5.0 million for the year 2018);
• Fully repaid its credit facility in January 2019 ($71.7 million in the fourth quarter 2018 for a total
of $123.5 million for the year 2018, in addition to a payment of $30.0 million in January 2019),
and extended the maturity date by one year to November 14, 2022; Osisko now has u p to
$450.0 million available under the credit facility;
• Incurred impairment charges of $166.3 milli on ($123.7 million, net of income taxes), including
$148.5 million on the Éléonore NSR royalty interest ($109.1 million, net of income taxes),
compared to $89.0 million in 2017 on the Éléonore NSR royalty interest ($65.4 million, net of
income taxes) . On F ebruary 13, 2019, Goldcorp Inc. announced an impairment expense of
US$1.4 billion, net of income taxes, against the carrying value of the Éléonore mine, as a result
of the previously announced acquisition of the company by Newmont Mining Corporation and
due to the decrease in mineral reserves and resources and the reduction i n the estimated fair
value of Éléonore’s exploration potential;
• Received payment from Pretium Exploration Inc. for the repurchase of Osisko Bermuda’s
interest in the Brucejack gold and silver stream for US$118.5 million ($159.4 million) ,
generating a gain of $9.1 million;
• Maintained ownership and financing rights in respect to the Curraghinalt Gold project through
the take-private acquisition of Dalradian Resources Inc. by Orion Mine Finance. Osisko holds a
put option, subject to certain restrictions, to sell its shares for a period of 180 days at $1.47 per
share;
2
• Amended the Renard diamond stream, thereby investing an additional $21.6 million and
improving the cash margin on this stream;
• Acquired for cancellation 2,709,779 of our common shares for $32.9 million in the year 2018, in
addition to 85 2,500 common shares acquired in 2019 for $10.2 million (total of $20.0 million
under the $100.0 million buyback program announced in December 2018);
• Held $174.3 million in cash and cash equivalents and $3 97.1 million in equity investments4 as
at December 31, 2018;
• Declared a quarterly dividend of $0.05 per common share payable on January 15, 2019 to
shareholders of record as at December 31, 2018; and
• Declared quarterly dividends totaling $0.20 per common share for the year 2018 for
$31.2 million, bringing the total to $86.3 million since inception in 2014.
For more details, please refer to the Management’s Discussion and Analysis for the year ended
December 31, 2018.
Recent Performance
Sean Roosen, Chair and Chief Executive Officer commented on the 2018 activities: “ We achieved
record revenues and cash flow with the full year production from our portfolio of assets acquired from
Orion in 2017. Dur ing the year, we continued to build on our asset base to position our shareholders
to benefit from increasing production and favorable precious metal prices. In less than 5 years we
have invested over $2.5 billion in royalty, streaming and offtake assets, as well as in our mining equity
portfolio of emerging producers.
We would also like to thank all our operating partners for their contribution to our success. We would
particularly highlight the strong performance of Canadian Malartic, our flagship 5% NS R royalty asset,
which achieved record gold production of 698,000 ounces in 2018.”
Outlook
Osisko’s 2019 outlook on royalty, stream and offtake interests is based on publicly available forecasts,
in particular the forecasts for the Canadian Malartic mine published by Yamana and Agnico Eagle, for
the Éléonore mine published by Goldcorp, for the Renard mine published by Stornoway, and for the
Island Gold mine published by Alamos. When publicly available forecasts on properties are not
available, Osisko obtains internal forecasts from the producers, which is the case for the Sasa mine
and the Mantos Blancos mine, or uses management’s best estimate.
Attributable GEOs for 2019, estimated between 85,000 and 95,000, and cash margin by interest are
as follows:
Low High
Cash
margin
(GEOs) (GEOs) (%)
Royalty interests 54,700 61,100 99.9
Stream interests 28,000 31,300 65.5
Offtake interests 2,300 2,600 1.2
85,000 95,000
For the 2019 guidance, silver, diamonds and cash royalties have been converted to GEOs using
commodity prices of US$1,300 per ounce of gold, US$15.50 per ounce of silver and US$95 per carat
for diamonds from the Renard mine (blended sales price) and an exchange rate (US$/C$) of 1.30.
3
Board of Directors
Messrs. Pierre Chenard and André Gaumond have advised the Company that they will not be
standing for re-election at the next Annual General Meeting of Osisko to be held on May 1, 2019.
Sean Roosen, Chair and CEO noted: “André has been a leading explor ationist in Québec and a
visionary in seeing the potential of mine development in the Northern region of Québec. He has also
been a key industry member that worked on a collaborative effort with all stakeholders, especially in
the James Bay region, to ensu re the sustainable development of the region under Québec’s Plan
Nord. André will continue to be a friend to the Osisko Board and we will take advantage of his
experience and knowledge when we can. André led the team and investment required for the
discovery of Éléonore, which is a great example of development in the north, providing high quality
jobs in an area that will continue for many years to come”.
Mr. Roosen also noted: “Pierre provided great insights to our Board and Management over his tenure
on the Board and we look forward to working with him in his new functions with a major gold producer
and wish him best success in his new functions”.
Q4 and Full Year 2018 Results Conference Call
Osisko will host a conference call on Thursday, February 21, 2019 at 10:00 am EST to review and
discuss its Q4 2018 and full year 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 1:00 pm EST on February 21, 2019 until 11:59 pm
EST on February 29, 201 9 with the following dial in numbers: 1 -(800) 585-8367 (North American toll
free) or 1 (416) 621-4642, access code 3138878.
About Osisko Gold Royalties Ltd
Osisko Gold Royalties Ltd is an intermediate precious metal royalty company that holds a North American
focused portfolio of over 130 royalties, streams and precious metal offtakes. Osisko’s portfolio is anchored by its
5% NSR royalty on the Canadian Malartic Mine, which is the largest gold mine in Canada. Osisko also owns a
portfolio of publicly held resource companies, including a 32. 2% interest in Barkerville Gold Mines Ltd., a 16.7%
interest in Osis ko Mining Inc., a 15. 4% interest in Victoria Gold Corp. , a 17.8% interest in Falco Resources Ltd
and a 10.6% interest in Osisko Metals Incorporated.
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:
Joseph de la Plante
Vice President, Corporate Development
Tel. (514) 940-0670
4
Notes:
(1) GEOs are calculated on a quarterly basis and include royalties, streams and offtakes. Silver
earned from royalty and stream agreements was converted to gold equivalent ounces by
multiplying the silver ounces by the average silver price for the period and dividing by the
average gold price for the period. Diamonds, other metals and cash royalties were converted
into gold equivalent ounces by dividing the associated revenue by the average gold price for
the period. Offtake agreements were converted using the financial settlement equivalent
divided by the average gold price for the period.
Average Metal Prices and Exchange Rate
Three months ended
December 31,
Years ended
December 31,
2018 2017 2018 2017
Gold(i) $1,226 $1,275 $1,268 $1,257
Silver(ii) $14.54 $16.73 $15.70 $17.05
Exchange rate
(US$/Can$)(3)
1.3204 1.2713 1.2957 1.2986
(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) “Adjusted earnings ” and “Adjusted earnings per basic share” are not recognized measures
under the International Financial Reporting Standards (“IFRS”). Refer to the non- IFRS
measures provided under the Non -IFRS Financial Performance Measures section of the
Management’s Discussion and Analysis for the year ended December 31, 2018.
5
(3) Cash operating margin, which represents revenues less cost of sales, is a non-IFRS measure.
The Company believes that this non- IFRS generally accepted industry measure provides a
realistic indication of operating performance and provides a useful comparison with its peers.
The following table reconciles the cash margin to the revenues and cost of sales presented in
the consolidated statements of income and related notes:
(In thousands of dollars)
Three months ended
December 31,
Years ended
December 31,
2018 2017 2018 2017
$ $ $ $
Revenues 115,337 109,552 490,472 213,216
Less: Revenues from offtake interests (84,599) (77,338) (362,905) (119,424)
Revenues from royalty and stream interests 30,738 32,214 127,567 93,792
Cost of sales (86,600) (81,058) (371,305) (125,645)
Less: Cost of sales of offtake interests 83,659 76,550 357,879 117,974
Cost of sales of royalty and stream interests (2,941) (4,508) (13,426) (7,671)
Revenues from royalty and stream interests 30,738 32,214 127,567 93,792
Less: Cost of sales of royalty and stream interests (2,941) (4,508) (13,426) (7,671)
Cash margin from royalty and stream interests 27,797 27,706 114,141 86,121
90.4% 86.0% 89.5% 91.8%
Revenues from offtake interests 84,599 77,338 362,905 119,424
Less: Cost of sales of offtake interests (83,659) (76,550) (357,879) (117,974)
Cash margin from offtake interests 940 788 5,026 1,450
1.1% 1.0% 1.4% 1.2%
(4) Represents the estimated fair value based on the quoted prices of the investments in a
recognized stock exchange as at December 31, 2018. For private investments, an internal or
external evaluation is prepared.
6
Forward-looking Statements
This news release contains forward -looking information and forward-looking statements (together, " forward-looking
statements") within the meaning of applicable Canadian securities laws and the United States Private Securities Litigation
Reform Act of 1995. All statements in this release, other than statements of historical fact, that address future events,
developments or performance that Osisko expects to occur including management’s ex pectations regarding Osisko’s growth,
results of operations, estimated future revenue, requirements for additional capital, production estimates, production costs
and revenue, business prospects and opportunities are forward-looking statements. In addition, statements relating to gold
equivalent ounces ("GEOs") are forward-looking statements, as they involve implied assessment, based on certain estimates
and assumptions, and no assurance can be given that the GEOs will be realized. Forward-looking statement s are statements
that are not historical facts and are generally, but not always, identified by the words "expects", "is expected" "plans",
"anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions or v ariations
(including negative variations of such words and phrases), or may be identified by statements to the effect that certain
actions, events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, the performanc e of
the assets of Osisko, the realization of the anticipated benefits deriving from Osisko’s investments and transactions, including
the realization of all conditions precedent to the closing of the investment in Falco Resources Ltd.’s Horne 5 Gold projec t, the
estimate of GEOs to be received in 2019, and Osisko’s ability to seize future opportunities. Although Osisko believes the
expectations expressed in such forward- looking statements are based on reasonable assumptions, such statements involve
known and unknown risks, uncertainties and other factors and are not guarantees of future performance and actual results
may accordingly differ materially from those in forward- looking statements. Factors that could cause the actual results
deriving from Osisko’s royalties, streams and other interests to differ materially from those in forward-looking statements
include, without limitation: influence of political or economic factors including fluctuations in the prices of the commoditi es and
in value of the Canadian dollar relative to the U.S. dollar, continued availability of capital and financing and general
economic, market or business conditions; regulations and regulatory changes in national and local government, including
permitting and licensing regimes and t axation policies; whether or not Osisko is determined to have “passive foreign
investment company” (“PFIC”) status as defined in Section 1297 of the United States Internal Revenue Code of 1986, as
amended; potential changes in Canadian tax treatments of of fshore streams or other interests, litigation, title, permit or
license disputes; risks and hazards associated with the business of exploring, development and mining on the properties in
which Osisko holds a royalty, stream or other interest including, but not limited to development, permitting, infrastructure,
operating or technical difficulties, unusual or unexpected geological and metallurgical conditions, slope failures or cave- ins,
flooding and other natural disasters or civil unrest, rate, grade and t iming of production differences from mineral resource
estimates or production forecasts or other uninsured risks; risk related to business opportunities that become available to, or
are pursued by Osisko and exercise of third party rights affecting proposed investments . The forward-looking statements
contained in this press release are based upon assumptions management believes to be reasonable, including, without
limitation: the ongoing operation of the properties in which Osisko holds a royalty, stream or other interest by the owners or
operators of such properties in a manner consistent with past practice; the accuracy of public statements and disclosures
made by the owners or operators of such underlying properties; no material adverse change in the mark et price of the
commodities that underlie the asset portfolio; Osisko’s ongoing income and assets relating to the determination of its PFIC
status, no material changes to existing tax treatments; no adverse development in respect of any significant property in which
Osisko holds a royalty, stream or other interest; the accuracy of publicly disclosed expectations for the development of
underlying properties that are not yet in production; and the absence of any other factors that could cause actions, events or
results to differ from those anticipated, estimated or intended. However, there can be no assurance that forward- looking
statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in s uch
statements. Investors are cautioned that forward-looking statements are not guarantees of future performance. Osisko
cannot assure investors that actual results will be consistent with these forward-looking statements and investors should not
place undue reliance on forward-looking statements due to the inherent uncertainty therein.
For additional information with respect to these and other factors and assumptions underlying the forward -looking statements
made in this press release, see the section entitled " Risk Factors" in the most recent Annual Information Form of Osisko
which is filed with the Canadian securities commissions and available electronically under Osisko's issuer profile on SEDAR
at www.sedar.com and with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov. The forward-looking
information set forth herein reflects Osisko’s expectations as at the date of this press release and is subject to change aft er
such date. Osisko disclaims any intention or obligation to update or revise any forward- looking statements, whether as a
result of new information, future events or otherwise, other than as required by law.
Osisko Gold Royalties Ltd
Consolidated Balance Sheets
As at December 31, 2018 and 2017
(tabular amounts expressed in thousands of Canadian dollars)
7
December 31, December 31,
2018 2017
$ $
Assets
Current assets
Cash and cash equivalents 174,265 333,705
Short-term investment 10,000 -
Amounts receivable 12,321 8,385
Inventories - 9,859
Other assets 1,015 984
197,601 352,933
Non-current assets
Investments in associates 304,911 257,433
Other investments 109,603 115,133
Royalty, stream and other interests 1,414,668 1,575,772
Exploration and evaluation 95,002 102,182
Goodwill 111,204 111,204
Other assets 1,657 1,686
2,234,646 2,516,343
Liabilities
Current liabilities
Accounts payable and accrued liabilities 11,732 15,310
Dividends payable 7,779 7,890
Provisions and other liabilities 3,494 5,632
23,005 28,832
Non-current liabilities
Long-term debt 352,769 464,308
Provisions and other liabilities - 2,036
Deferred income taxes 87,277 126,762
463,051 621,938
Equity attributable to Osisko Gold Royalties Ltd’s shareholders
Share capital 1,609,162 1,633,013
Warrants 30,901 30,901
Contributed surplus 21,230 13,265
Equity component of convertible debentures 17,601 17,601
Accumulated other comprehensive income (loss) 23,499 (2,878)
Retained earnings 69,202 202,503
1,771,595 1,894,405
2,234,646 2,516,343
Osisko Gold Royalties Ltd
Consolidated Statements of Loss
For the three months and the years ended December 31, 2018 and 2017
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)
8
Three months ended
December, 31
(unaudited)
Years ended
December 31,
2018 2017 2018 2017
$ $ $ $
Revenues 115,337 109,552 490,472 213,216
Cost of sales (86,600) (81,058) (371,305) (125,645)
Depletion of royalty, stream and other interests (12,975) (12,747) (52,612) (28,065)
Gross profit 15,762 15,747 66,555 59,506
Other operating expenses
General and administrative (4,912) (7,010) (18,156) (24,558)
Business development (805) (3,126) (4,525) (16,199)
Gain on disposal of a stream interest 9,094 - 9,094 -
Impairment of assets (166,316) (89,000) (166,316) (89,000)
Exploration and evaluation, net of tax credits (55) (63) (183) (184)
Operating loss (147,232) (83,452) (113,531) (70,435)
Interest income 847 1,098 4,428 4,255
Dividend income 50 - 328 -
Finance costs (6,708) (4,825) (25,999) (8,384)
Foreign exchange gain (loss) 362 (635) 454 (16,086)
Share of loss of associates (2,455) (3,482) (9,013) (6,114)
Other gains (losses), net 1,018 (507) 2,598 30,829
Loss before income taxes (154,118) (91,803) (140,735) (65,935)
Income tax recovery 40,236 27,450 35,148 23,147
Net loss (113,882) (64,353) (105,587) (42,788)
Net loss attributable to:
Osisko Gold Royalties Ltd’s shareholders (113,882) (64,348) (105,587) (42,501)
Non-controlling interests - (5) - (287)
Net loss per share attributable to Osisko Gold
Royalties Ltd’s shareholders
Basic (0.73) ) (0.41) (0.67) (0.33)
Diluted (0.73) ) (0.41) (0.67) (0.33)