Osisko Reports 2020 Results and Provides 2021 Guidance
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OSISKO REPORTS 2020 RESULTS AND PROVIDES 2021 GUIDANCE
Montréal, February 24, 2021 – Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX &
NYSE) today announced its consolidated financial results for the fourth quarter and full year 2020 and
provides guidance for 2021. Amounts presented are in Canadian dollars, except otherwise noted.
2020 Highlights
Earned 66,113 GEOs1 in 2020, above revised guidance of 63,500 – 65,500 GEOs;
Record revenues from royalties and streams of $156.6 million (2019 – $140.1 million);
Record cash flows from operations of $108.0 million, an increase of 18% compared to 2019;
Cash operating margin2 of 94% from royalties and streams;
Net earnings attributable to Osisko’s shareholders of $16.9 million, or $0.10 per share; and
Adjusted earnings3 of $43.7 million, or $ 0.27 per basic share (2019 – $41.9 million, $0.28 per
basic share).
Q4-2020 Highlights
Earned 18,829 GEOs1, excluding 1,754 GEOs from the Renard diamond stream;
Record revenues from royalties and streams of $48.8 million (Q4 2019 – $38.9 million);
Cash flows from operating activities of $32.6 million (Q4 2019 – $17.2 million);
Cash operating margin2 of 94% from royalty and stream interests;
Net earnings attributable to Osisko’s shareholders of $4.6 million, $0.03 per basic share; and
Adjusted earnings3 of $12.0 million or $0.07 per basic share (Q4 2019 – $10.3 million, $0.07 per
basic share);
Sandeep Singh, President and CEO of Osisko commented on the activities of the fourth quarter of 2020:
“Despite mine shutdowns associated with COVID-19 in the first half of the year, Osisko achieved record
revenues and cash flows. Our asset base is performing well, with several recent positive developments,
including a major catalyst on the Odyssey underground project extending production from our flagship
Canadian Malartic asset for decades. Elsewhere, our partners are replacing reserves, extending mine
lives, outlining new discoveries and announcing, or further justifying, mine expansions. The fourth
quarter marked the last quarter where we invested directly into the Cariboo project. Through the creation
of Osisko Development, we added significant value while simplifying our business going forward. We
start the year in excellent shape to unlock value for shareholders.”
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Other Highlights
Completed the spin -out of mining assets and certain equity positions through a reverse take -
over (“RTO”) transaction and the creation of a North American gold development company,
Osisko Development Corp. (“Osisko Development”) , which concurrently completed a $100.1
million bought deal financing;
In December 2020, Osisko Development closed a brokered private placement for gross
proceeds of $40.2 million and received proceeds of $73.9 million from a private placement that
closed in 2021 (for a total additional financing of $79.8 million);
In October 2020, Osisko a nnounced a strategic partnership with Regulus Resources Inc.
(“Regulus”) whereby Regulus has agreed to grant Osisko an initial NSR royalty of 0.75% - 1.5%
on the Mina Volare claim, part of the larger AntaKori project, as well as certain future royalty
rights in exchange for an upfront cash payment of US$12.5 million ($16.4 million);
In February 2021, Agnico Eagle Mines Limited (“Agnico Eagle”) and Yamana Gold Inc.
(“Yamana”) announced a positive c onstruction decision for the Odyssey underground mine
project. The preliminary economic study shows a total of 7.29 million ounces of additional gold
in the mine plan (6.18 million tonnes grading 2.07 g/t gold indicated resources and 75.9 million
tonnes grading 2.82 g/t gold inferred resources). Underground mine production is planned to
start in 2023 and is expected to ramp up to an average of 545,400 ounces of gold per year from
2029 to 2039;
On February 12, 2021, Osisko repaid a $50.0 million convertible debenture and drew its credit
facility for the same amount, thereby reducing the interest payable by approximately 1.5% per
annum; and
Declared a quarterly dividend of $0.05 per common share payable on April 15, 2021 to
shareholders of record as of the close of business on March 31, 2021.
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2021 Guidance
Osisko’s 2021 guidance on royalty, stream and offtake interests is largely based on publicly available
forecasts from our operating partners. When publicly available forecasts are not available, Osisko
obtains internal forecasts from the producers or uses management’s best estimate.
GEOs and cash margin by interest, excluding the Renard stream, are estimated as follows for 2021:
Low High
Cash
margin
(GEOs) (GEOs) (%)
Royalty interests 59,750 62,800 100
Stream interests 17,400 18,250 87
Offtake interests 850 950 3
78,000 82,000 97*
* Excluding offtake interests
For the 2021 guidance estimate, deliveries of silver and cash royalties have been converted to GEOs
using commodity prices of US$1,800 per ounce of gold, US$25 per ounce of silver and an exchange
rate (USD/CAD) of 1.28. Any GEOs (and the related cash margin) from the Renard diamond stream
have been excluded from the outlook above. For 2021, deliveries from the Renard diamond stream are
estimated to be 8,126 GEOs; however, for the remainder of 2021, Osisko has committed to reinvest the
net proceeds from the stream through the bridge loan facility provided to the operator.
Cash Balance
The Q4 results mark the first quarter where Osisko is consolidating financial results to include Osisko
Development and its subsidiaries. As at December 31, 2020 and 2019, the cash positions in each entity
were as follows:
Osisko Gold Royalties (i) Osisko Development Total
2020 2019(ii) 2020 2019(iii) 2020 2019
$ $ $ $ $ $
Cash held in Canadian dollars 29,714 4,752 137,374 8,006 167,088 12,758
Cash held in U.S. dollars 59,208 73,502 47,167 - 106,375 73,502
Cash held in U.S. dollars (Canadian equivalent) 75,383 95,465 60,053 - 135,436 95,465
Total cash 105,097 100,217 197,427 8,006 302,524 108,223
(i) Excluding Osisko Development and its subsidiaries.
(ii) Excluding the cash held by Barkerville and the other subsidiaries that were transferred to Osisko Development in 2020 as part of the RTO.
(iii) Corresponds to the cash that was held by Barkerville and the other subsidiaries that were transferred to Osisko Development in 2020 as part of the
RTO.
In addition, on February 24, 2021, the Company has access to the undrawn portion of its credit facility
of $286.4 million, excluding the additional $100.0 million accordion.
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Recent Asset Advancements
Canadian Malartic Underground Construction Decision
Agnico Eagle and Yamana have approved construction of the Odyssey underground project at the
Canadian Malartic mine. The preliminary economic assessment estimates 545,000 ounces of gold per
annum from 2029 onward s (see Chart 1). The underground production plan of the Odyssey project
outlined in the preliminary economic assessment comprises 6.88 million ounces of inferred resources
(75.9 million tonnes of 2.82 g/t gold) and 0.41 million ounces of indicated resources (6.18 million tonnes
of 2.07 g/t gold). The production plan is hosted in three main underground -mineralized zones; East
Gouldie, East Malartic, and Odyssey, the latter of which is sub-divided into the Odyssey North, Odyssey
South and Odyssey Internal zon es. Osisko holds a 5% NSR royalty on East Gouldie, Odyssey South
and the western half of East Malartic and a 3% NSR royalty on Odyssey North and the eastern half of
East Malartic.
Chart 1: Canadian Malartic Production Profile
Source: Agnico Eagle and Yamana news releases, Feb 11, 2021.
Osisko Development Corp. Update
Osisko Development announced drill results that help outline the 1.5 kilometres (“km”) long Proserpine
zone as another potential mining area in the Cariboo camp. Results include 17.78 g/t gold over
5.6 metres and 8.06 g/t gold over 1.7 metre. There are currently ten surface drills active on the property.
Osisko Development is currently mining underground at the Bonanza Ledge Phase 2 project and is
stockpiling mineralized material at the QR Mill. Processing is set to begin in the second quarter of this
year. Osisko Development purchased a new communition circuit designed to process 7,500 tonnes per
day for the larger Cariboo project . This critical equipment reduces engineering risk and w ill help fast
track the construction of the processing facilities once all permits are received for the Cariboo project.
At the San Antonio gold project, Osisko Development has completed the engineering and permitting to
process the 1.3 million tonne s gold mineralized stockpile via heap leaching. Osisko Development has
also entered into an agreement to purchase a semi -portable crushing plant for the San Antonio gold
project with capacity of 15,000 tonnes per day.
Osisko retains 77.0% of the common equity in Osisko Development and also holds a 5% NSR on the
Cariboo and Bonanza Ledge Phase 2 properties as well as a 15% gold and silver stream on the San
Antonio gold project with a transfer payment equal to 15% of the spot gold and silver price.
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Eagle Ramp-Up
Victoria Gold Corp.’s (“Victoria”) Eagle mine, in the Yukon, produced 116,644 ounces of gold in 2020
and is expected to continue to ramp up production in 2021 towards a run rate of 210,000 oz per annum.
Fourth quarter production rea ched 42,436 ounces of gold which is a 20% increase over the previous
quarter. Ore stacking rates improved significantly in the fourth quarter prior to the planned 90 -day
curtailment of ore staking for the coldest months of the year. Mining operations, prim ary crushing and
stockpiling of ore will continue. Osisko has a 5% NSR royalty on the Eagle mine.
Windfall Resource Update
Osisko Mining Inc. (“Osisko Mining”) released an updated resource estimate on February 17, 2021 for
its Windfall project including indicated resources of 1.9 million ounces (6 million tonnes of 9.6 g/t gold)
and inferred resources of 4.2 million ounces (16.4 million tonnes of 8 g/t gold). This represents a 54%
increase in measured and indicated ounces. More than 30 drill rigs are focused on infill drilling on Lynx
where over 60% of the total mineral resources are contained, with average grades of over 11 g/t gold in
the measured and indicated categories and 9.9 g/t gold in the inferred category. The Company has a 2-
3% NSR royalty on the Windfall deposit, and also owns 14.5% of the outstanding shares of Osisko
Mining.
Island Gold Resources Increase
Alamos Gold Inc. (“Alamos”) released an updated resource and reserve estimate on their Island Gold
mine highlighted by an 8% increase in reserves and a 40% increase in inferred resources. Proven and
probable reserves include 1.3 million ounces (4.2 million tonnes of 9.71 g/t gold) and Inferred resources
grew to 3.2 million ounces (6.9 million tonnes of 14.43 g/t gold). The new mineral inventory shows
significant upside potential to the Phase III Expansion Study published in July 2020. Osisko has a 1.38%
to 3% NSR royalty over the Island Gold mine.
Ermitaño Fully Permitted
First Majestic plans to release a Preliminary Economic Assessment and updated resource estimate for
Ermitaño by the end of the first quarter of 2021. The Prefeasibility study is expected to be released in
the second half of 2021 and will define initial reserves, production rates, costs and estimated life of mine
for the Ermitaño project. First Majestic is preparing for initial limited production in the second half of 2021
followed by production ramp up in early 2022. The land use permit was received in January 2021
completing full permitting of the project. Osisko has a 2% NSR royalty on the Ermitaño project.
Agnico Eagle Increases Exploration Budget on Kirkland Lake Property
Agnico Eagle announced plans to drill 36,500 metres at the Upper Beaver project in 2021, including
additional shallow drilling to test an open pit concept and further deep drilling to convert mineral
resources to mineral reserves. As of December 31, 2020, Upper Beaver has approximately 1.4 million
ounces of gold and 20,000 tonnes of copper in underground probable mineral reserves (8.0 million
tonnes grading 5.43 g/t gold and 0.25% copper). Agnico Eagle’s Kirkland Lake property also hosts the
Upper Canada, AK and Anoki -McBean deposits which together with Upper Beaver host an additional
indicated resource of 1.71 million ounces (17.2 million tonnes of 3.09 g/t gold) and inferred resources of
4.07 million ounces (32.2 million tonnes of 3.93 g/t gold). An internal technical study at Upper Beaver,
incorporating drill results from 2020 and 2021, is expected to be completed by the end of 2021. Osisko
has a 2% NSR royalty on the Kirkland Lake property.
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Agnico Eagle Declares Reserves on Hammond Reef
Agnico Eagle completed an internal technical study, which resulted in the declaration of open pit mineral
reserves estimated at 3.32 million ounces of gold (123.5 million tonnes grading 0.84 g/t gold). In addition,
the project contains 2.3 million ounces o f measured and indicated mineral resources (133.4 million
tonnes grading 0.54 g/t gold). Agnico Eagle will continue optimizing the project and potential mining
scenarios to further improve project economics. Osisko has 2% NSR royalty on the Hammond Reef
property.
Eldorado Gold Declares Maiden Resource on Ormaque and Acquisition of QMX Gold
Corporation
In February 2021, Eldorado Gold Corporation (“Eldorado”) declared the maiden resource for the
Ormaque deposit. The deposit contains inferred resources of 0.8 million ounces (2.62 million tonnes of
9.5g/t gold) with more than 60% occurring above 400m depth. The top of the deposit occurs at the level
of the ore haulage decline that should reach the Ormaque deposit in Q3 of this year. Eldorado aims to
provide additional ore sources to optimize the Sigma Mill, which has a permitted capacity of 5,000 tonnes
per day, far exceeding current usage of 2,200 tonnes per day. Osisko has a 1% NSR royalty on the
Lamaque property hosting the Ormaque deposit.
In January 2021, Eldorado announced the friendly acquisition of QMX Gold Corporation (QMX). Osisko
holds a 2.5% royalty over most of the QMX property, including the three main exploration targets. The
most advanced of these targets is Bonnefond , which hosts indicated resources of 0.4 million ounces
(7.4 million tonnes of 1.67 g/t gold) and inferred resources of 0.29 million ounces (3.3 million tonnes of
2.71 g/t gold). Recent drilling results (including 5.46 g/t gold over 33.5 metres) illustrate significant
underground exploration potential.
Casino Gold Zone
Western Copper and Gold (“Western Copper”) released exploration results on the Casino project
highlighting significantly higher grades in the deposit core from surface to greater than 200 metres depth.
Drill results include 0.76 g/t gold over 175.49 metres; these results will be integrated in an updated
preliminary economic assessment to be released in the second quarter of 2021. Osisko holds a 2.75%
NSR royalty on the Casino project.
Wharekirauponga (WKP)
Oceana Gold Corp. (“Oceana”) released some spectacular drill intersections on their WKP project
including 22.8 g/t gold and 39 g/t silver over 48.9 metres and 41.4 g/t gold and 81.6 g/t silver over
9 metres. Approximately 10,500 metres of drilling are planned in 2021. Oceana continues to advance
the consenting process to access this zone for underground mining. Osisko has a 2% NSR on the WKP
property.
Bralorne Drilling
Talisker Resources Ltd. (“Talisker”) continues to intersect high grade vein intersections on their Bralorne
property, but also some thicker bulk mining intervals. The Charlotte zone includes 10.47 g/t gold over
10.30 metres at a depth of 102.7 metres and 1.55 g/t gold over 36.95 metres at a depth of 208.45
metres. Talisker initiated a 50,000 metre drill program at Bralorne in 2021. Osisko has a 1.2% NSR on
the Bralorne property.
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Q4 2020 and Full Year 2020 Results Conference Call
Osisko will host a conference call on Thursday, February 25, 2021 at 10:00 am EST to review and
discuss its fourth quarter and full year 2020 results and 2021 guidance.
Those interested in participating in the conference call should dial in at 1 -(833) 979-2852 (North
American toll free), or 1-(236) 714-2915 (international). An operator will direct participants to the call.
The conference call replay will be available from 1:00 pm EST on February 25, 2021 until 11:59 pm EST
on March 4, 2021 with the following dial in numbers: 1-(800) 585-8367 (North American toll free) or 1-
(416) 621 -4642, access code 9484419. The replay will also be 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 focused on the Americas
that commenced activities in June 2014. Osisko holds a North American focused portfolio of over 140
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, which is the largest gold mine in Canada.
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:
Heather Taylor
Vice President, Investor Relations
Tel. (514) 940-0670 x105
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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 has been 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,
2020 2019 2020 2019
Gold(i) $1,874 $1,481 $1,770 $1,393
Silver(ii) $24.39 $17.32 $20.54 $16.21
Exchange rate (US$/Can$)(iii) 1.3030 1.3200 1.3413 1.3269
(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) 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 o f sales presented in the consolidated
statements of income (loss) and related notes (In thousands of Canadian dollars):
Three months ended
December 31,
Years ended
December 31,
2020 2019 2020 2019
$ $ $ $
Revenues 64,560 51,032 213,630 392,599
Less: Revenues from offtake interests (15,796) (12,112) (57,056) (252,477)
Revenues from royalty and stream interests 48,764 38,920 156,574 140,122
Cost of sales (18,236) (15,265) (63,700) (262,881)
Less: Cost of sales of offtake interests 15,086 11,720 54,200 249,172
Cost of sales of royalty and stream interests (3,150) (3,545) (9,500) (13,709)
Revenues from royalty and stream interests 48,764 38,920 156,574 140,122
Less: Cost of sales of royalty and stream interests (3,150) (3,545) (9,500) (13,709)
Cash margin from royalty and stream interests 45,614 35,375 147,074 126,413
94% 91% 94% 90%
Revenues from offtake interests 15,796 12,112 57,056 252,477
Less: Cost of sales of offtake interests (15,086) (11,720) (54,200) (249,172)
Cash margin from offtake interests 710 392 2,856 3,305
5% 3% 5% 1%