Osisko Reports First Quarter 2018 Results 94% Increase IN Cash Flows from Operating Activities
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OSISKO REPORTS FIRST QUARTER 2018 RESULTS
94% INCREASE IN CASH FLOWS FROM OPERATING ACTIVITIES
Montréal, May 3, 2018 – Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX & NYSE)
today announced its consolidated financial results for the fir st quarter ended March 31, 2018 and an
update on matters following quarter-end.
Highlights
• Earned 20,036 gold equivalent ounces 1 (“GEOs”), in -line with the 2018 annual guidance of
77,500 to 82,500 GEOs;
• Generated cash flows from operating activities of $23.3 million, a record which represents a
94% increase compared to the first quarter of 2017;
• Recorded cash operating margins2 of 91% from royalty and stream interests , maintaining the
highest margin in the metals and mining sector, generating $29.5 million in addition to a cash
operating margin of $2.4 million from offtake interests;
• Invested $148 million in Victoria Gold Corp.’s near-term Eagle Gold project located in Yukon,
Canada, of which $98 million was for a 5% net smelter return royalty on the proj ect. ($49
million will be funded pro rata to other debt facilities). The project is permitted, fully financed
and in construction. Osisko expects to receive an average of 10,000 GEOs annually from the
project once in production expected by 2020;
• Converted the Matilda gold offtake into a 1.65% gold stream;
• Sold investments for gross proceeds of $25.6 million, generating a cash gain3 of $15.5 million;
• Repaid $32 million on the revolving credit facility in April;
• Held $205 million in cash and cash equivalents and $382 million in equity investments4 as at
April 30, 2018;
• Distributed $7.8 million in dividends to shareholders through its 14 th consecutive dividend
payment, bringing the total to $62.9 million since inception in 2014;
• Repurchased 1,607,099 shares during the first quarter of 2018 at a total cost of $20.3 million ,
or at an average price of $12.65.
For more details, please refer to the Management’s Discussion and Analysis for the three months
ended March 31, 2018.
Recent Performance
“While the current environment remains challenging in the global metals and mining sector, Osisko
has had a very good start to the year being able to announce and close the Eagle Gold royalty
acquisition, which further strengthens our Canadian-focused portfolio. Our value creation approach to
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investing in both near -term and long -term opportunities keeps us focused on finding the rig ht
opportunities for Osisko and its shareholders.
Osisko is in an excellent position to continue to invest in the opportunities that present themselves in
the current market environment . W e have nearly a billion dollars of available financial capacity to
deploy into new investments and are actively reviewing new opportunities.
In addition to our financial capacity, we are continuously discussing with other capital providers within
the global metals and mining sector to develop strategic relationships and alliances to further increase
our capacity, enhance our suites of financial products and offer complete financing solutions to our
mining partners”, said Sean Roosen, Chair and Chief Executive Officer.
Q1 2018 Results Conference Call
Osisko will host a conference call on Friday , May 4, 2018 at 10 :00 EDT to review and discuss its Q1
2018 results.
Those interested in participating in the conferenc e call should dial in at 1 -(647) 788- 4922
(international), or 1 -(877) 223-4471 (North American toll free). An operator will direct participants to
the call.
The conference call replay will be available from 1 :00pm EDT on May 4, 2018 until 11:59 pm EST on
May 11, 2018 with the following dial in numbers: 1 -(800) 585-8367 (North American toll free) or 1-
(416) 621-4642, access code 6387003.
For further information, please contact Osisko Gold Royalties Ltd:
Vincent Metcalfe
Vice President, Investor Relations
Tel. (514) 940-0670
Joseph de la Plante
Vice President, Corporate Development
Tel. (514) 940-0670
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
For the three months ended
March 31,
2018 2017
Gold(1) $1,329 $1,219
Silver(2) $17 $17
Exchange rate (US$/Can$)(3) 1.2647 1.3238
(1) The London Bullion Market Association’s pm price in U.S. dollars
(2) The London Bullion Market Association’s price in U.S. dollars
(3) Bank of Canada daily rate
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(2) Cash operating margin, which represent s revenues less cost of sales, is not a recognized
measure under International Financial Reporting Standards (“IFRS”). 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:
Three months ended March 31,
2018 2017
$ $
Revenues 125,614 17,126
Less: Revenues from offtake interests (93,029) -
Revenues from royalty and stream interests 32,585 17,126
Cost of sales (93,667) (102)
Less: Cost of sales of offtake interests (90,604)
-
Cost of sales of royalty and stream interests (3,063) (102)
Revenues from royalty and stream interests 32,585 17,126
Less: Cost of sales of royalty and stream interests (3,063)
(102)
Cash margin from royalty and stream interests 29,522 17,024
91%
99%
Revenues from offtake interests 93,029 -
Less: Cost of sales of offtake interests (90,604) -
Cash margin from offtake interests 2,425 -
3% -
(3) The cash gain or loss is calculated by subtracting the cash cost from the cash proceeds on the
sale of an investment. The cash cost of an investment is a non-IFRS measure representing the
cash paid of an investment on the acquisition date.
(4) Represents the estimated fair value based on the quoted prices of the investments in a
recognized stock exchange as at April 30, 2018.
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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 expectations 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 statements 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 variations
(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 "shou ld" occur including, without limitation, the performance of
the assets of Osisko, the realization of the anticipated benefits deriving from Osisko’s investments and transactions and the
estimate of GEOs to be received in 2018. 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 commodities 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 taxation 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
offshore streams or other interests, litigation, title, permit or license disputes; risks and hazards associated with the bus iness
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
timing of production differences from mineral resource estimates or production forecasts or other uninsured risks; risk relat ed
to business opportunities that become available to, or are pursued by Osisko. 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 market 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 properti es
that are not yet in production; and the a bsence 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 even ts could differ materially from those anticipated in such 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 dat e of this press release and is subject to change after
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
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars)
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March 31, December 31,
2018 2017
$ $
Assets
Current assets
Cash and cash equivalents 332,617 333,705
Short-term investments 500 -
Accounts receivable 8,718 8,385
Inventories 9,962 9,859
Other assets 910 984
352,707 352,933
Non-current assets
Investments in associates 257,878 257,433
Other investments 84,288 115,133
Royalty, stream and other interests 1,592,240 1,575,772
Exploration and evaluation 102,346 102,182
Goodwill 111,204 111,204
Deferred income taxes - -
Other assets 1,570 1,686
2,502,233 2,516,343
Liabilities
Current liabilities
Accounts payable and accrued liabilities 14,308 15,310
Dividends payable 7,811 7,890
Provisions and other liabilities 5,382 5,632
27,501 28,832
Non-current liabilities
Long-term debt 467,483 464,308
Provisions and other liabilities 2,181 2,036
Deferred income taxes 126,663 126,762
623,828 621,938
Equity attributable to Osisko Gold Royalties Ltd shareholders
Share capital 1,621,867 1,633,013
Warrants 30,901 30,901
Equity reserve 990 -
Contributed surplus 14,029 13,265
Equity component of convertible debentures 17,601 17,601
Accumulated other comprehensive loss (9,025) (2,878)
Retained earnings 202,042 202,503
1,878,405 1,894,405
2,502,233 2,516,343
Osisko Gold Royalties Ltd
Consolidated Statements of Income
For the three months ended March 31, 2018 and 2017
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)
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2018 2017
$ $
Revenues 125,614 17,126
Cost of sales (93,667) (102)
Depletion of royalty, stream and other interests (13,230) (3,319)
Gross profit 18,717 13,705
Other operating expenses
General and administrative (4,382) (5,651)
Business development (1,192) (1,779)
Exploration and evaluation, net of tax credits (44) (42)
Operating income 13,099 6,233
Interest income 1,492 1,278
Finance costs (6,634) (949)
Foreign exchange gain (loss) 187 (1,420)
Share of loss of associates (1,397) (1,445)
Other gains (losses), net (2,581) 2,024
Earnings before income taxes 4,166 5,721
Income tax expense (1,856) (1,721)
Net earnings 2,310 4,000
Net earnings attributable to:
Osisko Gold Royalties Ltd’s shareholders 2,310 4,076
Non-controlling interests - (76)
Net earnings (loss) per share attributable to Osisko Gold
Royalties Ltd’s shareholders
Basic 0.01 0.04
Diluted 0.01 0.04
Osisko Gold Royalties Ltd
Consolidated Statements of Cash Flows
For the three months ended March 31, 2018 and 2017
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars)
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2018 2017
$ $
Operating activities
Net earnings 2,310 4,000
Adjustments for:
Share-based compensation 673 2,662
Depletion and amortization 13,272 3,352
Finance costs 1,618 345
Share of loss of associates 1,397 1,445
Net loss (gain) on acquisition of investments (1,908) 2,598
Net gain on dilution of investments in associates - (4,833)
4,489 211
Deferred income tax expense 1,667 1,721
Foreign exchange loss 898 1,415
Other 46 105
Net cash flows provided by operating activities
before changes in non-cash working capital items
24,462 13,021
Changes in non-cash working capital items (1,159) (1,008)
Net cash flows provided by operating activities 23,303 12,013
Investing activities
Net increase in short-term investments (500) (500)
Acquisition of investments (13,629) (62,819)
Proceeds on disposal of investments 25,578 22,512
Acquisition of royalty and stream interests (9,970) (42,928)
Property and equipment (18) (44)
Exploration and evaluation tax credits, net of expenses 1,094 1,242
Net cash flows provided by (used) in investing activities 2,555 (82,537)
Financing activities
Issuance of common shares 114 869
Issue expenses (186) (41)
Financing fees (379) -
Investments from non-controlling interests - 1,333
Normal course issuer bid purchase of common shares (20,333) (1,822)
Dividends paid (7,547) (4,082)
Net cash flows used in financing activities (28,331) (3,743)
Decrease in cash and cash equivalents before effects of
exchange rate changes on cash and cash equivalents
(2,473) (74,267)
Effects of exchange rate changes on cash and cash equivalents 1,385 (1,415)
Decrease in cash and cash equivalents (1,088) (75,682)
Cash and cash equivalents – beginning of period 333,705 499,249
Cash and cash equivalents – end of period 332,617 423,567