Osisko Reports First Quarter 2019 Results Cash Flows from Operating Activities of $24.8 Million
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OSISKO REPORTS FIRST QUARTER 2019 RESULTS
CASH FLOWS FROM OPERATING ACTIVITIES OF $24.8 MILLION
Montréal, May 1, 2019 – Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX & NYSE)
today announced its consolidated financial results for the first quarter of 2019.
Highlights
Earned 19,753 gold equivalent ounces1 (“GEOs”) compared to 20,036 in Q1 2018;
Revenues from royalties and streams of $33.5 million compared to $32.6 million in Q1 2018;
Generated cash flows from operating activities of $ 24.8 million compared to $23.3 million in
Q1 2018;
Adjusted earnings2 of $5.8 million, $0.04 per basic share 2 compared to $8.9 million, $0.06 per
basic share in Q1 2018;
Recorded cash operating margin s3 of 89% from royalty and stream interests , generating
$29.9 million in operating cash flow in the first quarter, in addition to a quarterly cash operating
margin of $0.7 million from offtake interests;
Closed the previously announced senior secured silver stream facility with reference to up to
100% of the future silver produced from the Horne 5 property owned by Falco Resources Ltd.;
Repaid in full the revolving credit facility in January 2019 (payment of $30.0 million);
Incurred an i mpairment charge of $ 38.9 million ($ 28.6 million, net of income taxes) on th e
Renard diamond stream. This impairment is mainly due to a significant impairment charge of
$83.2 million announced on March 28, 2019 by the operator of the Renard diamond mine in
Québec, Canada, reflecting a lower diamond pricing outlook than expected;
Acquired for cancellation 852,500 of our common shares for $10.2 million (average acquisition
cost of $11.96 per share);
Held $108.5 million in cash and $403.8 million in equity investments4 as at March 31, 2019;
Declared a quarterly dividend of $0.05 per c ommon share paid on April 15, 2019 to
shareholders of record as of the close of business on March 29, 2019.
For more details, please refer to the Management’s Discussion and Analysis for the three months
ended March 31, 2019.
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Recent Performance
Sean Roosen, Chair and Chief Executive Officer commented on the first quarter of 2019 activities:
“Our Q1 results were in-line with our expectation and we anticipate to meet our guidance with stronger
GEO deliveries from our asset base during the remainder of the year. With stronger deliveries from the
Renard and Gibraltar streams as well as growth expected this year from the Lamaque and Eagle Gold
royalties, Osisko looks forward to enhanced financial flexibility and to potentially increase its dividend
towards the end of the year, and continues to be in a great position to deploy capital as opportunities
present themselves in the current depressed market environment. We congratulate the Eldorado Gold
Corporation team for achieving commercial production at its Lamaque mine in Québec”.
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 Gold Inc. and Agnico
Eagle Mines Limited, for the Éléonore mine published by Newmont Goldcorp Corporation, and for the
Renard mine published by Stornoway Diamond Corporation . When publicly available forecasts on
properties are not available, Osisko obtains internal forecasts from the producers, wh ich is the case
for the Mantos Blancos mine, or uses management’s best estimate.
Attributable GEOs for 2019 remains unchanged from previous guidance. GEOs and cash margin by
interest are estimated 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 us ing
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.
Q1 2019 Results Conference Call
Osisko will host a confer ence call on Thursday, May 2, 2019 at 10:00 am EDT to review and discuss
its Q1 2019 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 EDT on May 2, 2019 until 11:59 pm EDT on
May 9, 201 9 with the following dial in numbers: 1 -(800) 585 -8367 (North American toll free) or
1 (416) 621-4642, access code 2691455.
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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 13 5 royalties, streams and precious metal offtakes. Osisko’s portfo lio 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 32.7% interest in Barkerville Gold Mines Ltd., a 16.6%
interest in Osisko Mining Inc., a n 18.8% interest in Victoria Gold Corp. and a 19.9% interest in Falco Resources
Ltd.
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
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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, ot her 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
March 31,
2019 2018
Gold(1) $1,304 $1,329
Silver(2) $15.57 $16.77
Exchange rate
(US$/Can$)(3)
1.3295 1.2647
(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 three months ended March 31, 2019.
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(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
March 31,
2019 2018
$ $
Revenues 100,726 125,614
Less: Revenues from offtake interests (67,226) (93,029)
Revenues from royalty and stream interests 33,500 32,585
Cost of sales (70,104) (93,667)
Less: Cost of sales of offtake interests 66,510 90,604
Cost of sales of royalty and stream interests (3,594) (3,063)
Revenues from royalty and stream interests 33,500 32,585
Less: Cost of sales of royalty and stream interests (3,594) (3,063)
Cash margin from royalty and stream interests 29,906 29,522
89.3% 90.6%
Revenues from offtake interests 67,226 93,029
Less: Cost of sales of offtake interests (66,510) (90,604)
Cash margin from offtake interests 716 2,425
1.1% 2.6%
(4) Represents the estimated fair value based on the quoted price s of the investments in a
recognized stock exchange as at March 31 , 201 9. For private investments, an internal or
external evaluation is prepared.
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Forward-looking Statements
This news release co ntains 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 t his 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, requ irements 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, identifie d 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 b y 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 estimat e 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 guaran tees 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 th ose 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 cap ital 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 lic ense 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 timing 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 pre ss 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; Osis ko’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 ac curacy 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 o r
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 ar e 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 revi se 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,
2019 2018
$ $
Assets
Current assets
Cash 108,497 174,265
Short-term investments 13,119 10,000
Amounts receivable 6,871 12,321
Other assets 1,013 1,015
129,500 197,601
Non-current assets
Investments in associates 303,407 304,911
Other investments 121,364 109,603
Royalty, stream and other interests 1,391,299 1,414,668
Exploration and evaluation 92,777 95,002
Goodwill 111,204 111,204
Other assets 11,265 1,657
2,160,816 2,234,646
Liabilities
Current liabilities
Accounts payable and accrued liabilities 9,273 11,732
Dividends payable 7,757 7,779
Provisions 4,439 3,494
Lease liabilities 703 -
22,172 23,005
Non-current liabilities
Long-term debt 324,355 352,769
Lease liabilities 9,077 -
Deferred income taxes 77,816 87,277
433,420 463,051
Equity
Share capital 1,609,435 1,609,162
Warrants 18,072 30,901
Contributed surplus 33,987 21,230
Equity component of convertible debentures 17,601 17,601
Accumulated other comprehensive income 21,090 23,499
Retained earnings 27,211 69,202
1,727,396 1,771,595
2,160,816 2,234,646
Osisko Gold Royalties Ltd
Consolidated Statements of Income (Loss)
For the three months ended March 31, 2019 and 2018
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)
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2019 2018
$ $
Revenues 100,726 125,614
Cost of sales (70,104) (93,667)
Depletion of royalty, stream and other interests (12,376) (13,230)
Gross profit 18,246 18,717
Other operating expenses
General and administrative (5,934) (4,426)
Business development (1,738) (1,192)
Impairment of asset (38,900) -
Operating income (loss) (28,326) 13,099
Interest income 1,172 1,492
Finance costs (5,747) (6,634)
Foreign exchange gain (loss) (1,121) 187
Share of loss of associates (1,762) (1,397)
Other losses, net (35) (2,581)
Earnings (loss) before income taxes (35,819) 4,166
Income tax recovery (expense) 9,270 (1,856)
Net earnings (loss) (26,549) 2,310
Net earnings (loss) per share
Basic (0.17) 0.01
Diluted (0.17) 0.01