OSISKO REPORTS Q3 2022 RESULTS Record cash margin of $49.3 million Record operating cash flows from continuing operations of $51.1 million
OSISKO REPORTS Q3 2022 RESULTS
Record cash margin of $49.3 million
Record operating cash flows from continuing operations of $51.1 million
Montréal, November 9, 2022 – Osisko Gold Royalties Ltd (the “Corporation” or “Osisko”) (OR: TSX &
NYSE) today announce d its consolidated financial results for the third quarter of 2022. Amounts
presented are in Canadian dollars, except where otherwise noted.
Q3 2022 Financial Highlights
• Deconsolidation of Osisko Development Corp. (“Osisko Development”) as of September
30, 2022 and presentation of its results as discontinued operations on the statements of
loss and the statements of cash flows;
• 23,850 GEOs1 earned (Q3 2021 – 20,032 GEOs);
• R evenues of $53.7 million (Q3 2021 – $50.0 million);
• Cash flows generated by operating activities from continuing operations of $51.1 million
(Q3 2021 – $44.1 million);
• Cash margin2 of $49.3 million or 92% (Q3 2021 – 93%);
• N et earnings from continuing operations of $28.0 million, or $ 0.15 per share (Q3 2021 –
$25.6 million or $0.15 per basic share);
• A djusted earnings2 of $25.8 million, or $0.14 per basic share (Q3 2021 – $23.3 million, $0.14 per
basic share).
Sandeep Singh, President and CEO of Osisko commented: “ The business case for Osisko has never
been stronger. As outlined in our Q3 preliminary deliveries release, we experienced another quarter of
record deliveries, revenues and cash margin as we continue to anticipate further increases from our
core assets. We are also seeing an increasingly receptive market for royalty and streaming transactions
and are well positioned having kept a strong balance sheet for this part of the cycle. W e will, however,
remain disciplined in capital allocation, finding the right balance between growth and returning capital to
investors. The deconsolidation of Osisko Development is a further meaningful step in the strategic
realignment of Osisko as a pure-play royalty and streaming business.”
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Other Highlights
• As at September 30, 2022, the Company had a cash balance of $300.5 million, convertible
debentures maturing on December 31, 2022 with a nominal value of $300.0 million and a
$550.0 million completely undrawn revolving credit facility;
• Increased the accordion feature of the revolving credit facility from $100.0 million to
$200.0 million and extended the maturity date to September 29, 2026;
• Acquired a 1.0% net smelter return (“NSR”) royalty covering the currently known mineralization
and prospective exploration areas that constitute the Marimaca copper project located in
Antofagasta, Chile, for US$15.5 million ($20.3 million);
• Osisko Bermuda Limited closed the previously announced metals stream on the Trixie mine in
Utah, owned and operated by Osisko Development, as well as mineral claims covering more
than 17,000 acres in Central Utah’s historic Tintic Mining District, for US$20.0 million
($27.1 million) in exchange for 2.5% of all metals produced (until 27,150 ounces of refined gold
have been delivered, and thereafter 2.0%) and a transfer price of 25% of the spot prices;
• Appointed Mr. Rob Krcmarov to the Board of Directors. Mr. Krcmarov is a renowned international
mining executive with over 32 years of experience in the natural resources sector. Mr. Krcmarov
recently retired as Executive Vice President of Exploration and Growth for Barrick Gold
Corporation (“Barrick”). During his tenure at Barrick, he progressed through several senior
positions from 1988 to 2021, and built an exceptional skillset in global exploration spanning
across five continents and more than 20 countries;
• Declared a quarterly dividend of $0.055 per common share paid on October 14, 2022 to
shareholders of record as of the close of business on September 30, 2022.
Subsequent to September 30, 2022
• On November 7, 2022, Osisko announced that it has entered into a binding agreement with
SolGold plc (“SolGold”) with respect to a US$50 million royalty financing to support the
advancement of SolGold’s Cascabel copper -gold property in northeastern Ecuador. As part of
the transaction, Osisko Will acquire a 0.6% NSR royalty covering the entire Cascabel property;
and
• Declaration a quarterly dividend of $0.055 per common share to be paid on January 16, 2023 to
shareholders of record as of the close of business on December 30, 2022.
Deconsolidation of Osisko Development and Discontinued Operations
Effective on September 30, 2022, following certain changes made to the Corporation’s investment
agreement with Osisko Development, the Corporation ceased to consolidate the financials of Osisko
Development as management determined that it was no longer in a position of control over Osisko
Development. Immediately thereafter, management determined it was able to exert significant influence
on Osisko Development and subsequently accounted for its investment as an associate under the equity
method.
On September 30, 2022, the Corporation derecognized the assets and liabilities of Osisko Development
from its consolidated balance sheet, recorded its interest in Osisko Development at fair value as an
investment in an associate at $207.0 million, recognized royalty and stream interests on assets held by
Osisko Development of $122.1 million (these assets were previously eliminated on consolidation prior
to the loss of control) and recognized a net non-cash loss on deconsolidation of $140.9 million. Osisko
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Development’s results of operations and cash flows were consolidated into the Corporation’s financial
statements up to September 30, 2022 and are presented under discontinued operations in the
statements of loss and the statements of cash flows.
The continuing operations presented in the financial statements refer to the royalty, stream and other
interest business segment, which corresponds to the activities of Osisko Gold Royalties Ltd and its
subsidiaries.
The discontinued operations presented in the financial statements refer to the deemed disposal of the
mining exploration, evaluation and development business segment, which corresponds to the activities
of Osisko Development Corp. and its subsidiaries.
Q3 2022 Results Conference Call Details
Conference Call: Thursday, November 10th, 2022 at 10:00 am ET
Dial-in Numbers: North American Toll-Free: 1 (888) 886 7786
Local and International: 1 (416) 764 8658
Conference ID: 52047754
Replay (available until November 24th
at 11:59 pm ET):
North American Toll-Free: 1 (877) 674 7070
Local and International: 1 (416) 764 8692
Playback passcode: 047754#
Replay also 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 which holds a North
American focused portfolio of over 175 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
are converted to gold equivalent ounces by multiplying the silver ounces earned by the average silver price for the period and dividing by
the average gold price for the period. Diamonds, other metals and cash royalties are converted into gold equivalent ounces by dividing
the associated revenue earned by the average gold price for the period. Offtake agreements are converted using the financial settlement
equivalent divided by the average gold price for the period.
Average Metal Prices and Exchange Rate
Three months ended
September 30,
Nine months ended
September 30,
2022 2021 2022 2021
Gold(i) $1,729 $1,790 $1,824 $1,800
Silver(ii) $19.23 $24.36 $21.92 $25.75
Exchange rate (US$/Can$)(iii) 1.3056 1.2600 1.2829 1.2514
(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) Non-IFRS Measures
The Corporation has included certain performance measures in this press release that do not have any standardized meaning prescribed
by International Financial Reporting Standards (IFRS) including (i) cash margin ( in dollars and in percentage), (ii) adjusted earnings
(loss) and (iii) adjusted earnings (loss) per share . The presentation of these non-IFRS measures is intended to provide additional
information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
These measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. As Osisko’s
operations are primarily focused on precious metals, the Corporation presents cash margins and adjusted earnings as it believes that certain
investors use this information, together with measures determined in accordance with IFRS, to evaluate the Corporation’s performance
in comparison to other companies in the precious metals mining industry who present results on a similar basis. However, other
companies may calculate these non-IFRS measures differently.
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Cash Margin (in dollars and in percentage of revenues)
Cash margin (in dollars) represents revenues from continuing operations less cost of sales (excluding depletion). Cash margin (in
percentage of revenues) represents the cash margin (in dollars) divided by revenues from continuing operations.
Three months ended
September 30,
Nine months ended
September 30,
2022 2021 2022 2021
$ $ $ $
Royalty interests
Revenues 34,456 34,429 104,028 105,777
Less: cost of sales (excluding depletion) (490) (25) (772) (318)
Cash margin (in dollars) 33,966 34,404 103,256 105,459
Depletion (7,312) (7,630) (20,369) (21,634)
Gross profit 26,654 26,774 82,887 83,825
Stream interests
Revenues 19,205 15,606 51,867 43,162
Less: cost of sales (excluding depletion) (3,917) (3,482) (10,572) (9,339)
Cash margin (in dollars) 15,288 12,124 41,295 33,823
Depletion (6,849) (5,103) (16,941) (14,195)
Gross profit 8,439 7,021 24,354 19,628
Royalty and stream interests
Total cash margin (in dollars) 49,254 46,528 144,551 139,282
Divided by: total revenues 53,661 50,035 155,895 148,939
Cash margin (in percentage of revenues) 91.8% 93.0% 92.7% 93.5%
Offtake interests
Revenues - - - 25,265
Less: cost of sales (excluding depletion) - - - (24,343)
Cash margin (in dollars) - - - 922
Cash margin (in percentage of revenues) -% -% -% 3.6%
Depletion - - - (268)
Gross profit - - - 654
Total – Gross profit 35,093 33,795 107,241 104,107
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Adjusted earnings (loss) and adjusted earnings (loss) per basic share
Adjusted earnings (loss) is defined as: net earnings (loss) adjusted for certain items: foreign exchange gain (loss), impairment of assets
(including impairment on financial assets and investments in associates), gains (losses) on disposal of assets, unrealized gain (loss) on
investments, share of income (loss) of associates, deferred income tax expense (recovery) , transaction costs and other items such as
non-cash gains (losses).
Adjusted earnings (loss) per basic share is obtained from the adjusted earnings (loss) divided by the weighted average number of common
shares outstanding for the period.
Three months ended
September 30,
Nine months ended
September 30,
2022 2021 2022 2021
(in thousands of dollars, except per share
amounts)
$ $ $ $
Net earnings from continuing operations 28,014 25,593 62,877 55,397
Adjustments:
Impairment of royalty, stream and
other interests - - - 2,288
Impairment of investments 276 - 1,180 2,112
Foreign exchange (gain) loss (14,260) 322 (22,729) 182
Unrealized net loss (gain) on
investments 758 (11,202) 12,172 (8,260)
Share of loss (income) of associates 1,143 627 (383) 1,363
Deferred income tax expense 9,888 7,941 23,261 17,515
Adjusted earnings 25,819 23,281 76,378 70,597
Weighted average number of
common shares outstanding (000’s) 185,316 167,924 176,182 167,786
Adjusted earnings per basic share 0.14 0.14 0.43 0.42
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Forward-looking Statements
Certain statements contained in this press release may be deemed "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and “forward- looking information” within the meaning of
applicable Canadi an securities legislation. All statements in this press release, forward- looking statements are statements
other than statements of historical fact, that address, without limitation, future events, production estimates of Osisko’s assets
(including increase of production), timely developments of mining properties over which Osisko has royalties, streams, offtakes
and investments, management’s expectations regarding Osisko’s growth, results of operations, estimated future revenues,
production costs, carrying value of assets, ability to continue to pay dividend, requirements for additional capital, business
prospects and opportunities future demand for and fluctuation of prices of commodities (including outlook on gold, silver,
diamonds, other commodities) cur rency markets and general market conditions . In addition, statements and estimates
(including data in tables) relating to mineral reserves and resources and gold equivalent ounces are forward-looking
statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given
that the estimates will be realized. Forward- looking statements are statements that are not historical facts and are generally,
but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential",
"scheduled" and similar expressions or variations (including negative variations), or that events or conditions "will", "woul d",
"may", "could" or "should" occur. Forward-looking statements are subject to known and unknown risks, uncertainties and other
factors, most of which are beyond the control of Osisko, and actual results may accordingly differ materially from those in
forward-looking statements. Such risk factors include, without limitation: fluctuations in the prices of the commodities that drive
royalties, streams, offtakes and investments held by Osisko; fluctuations in the value of the Canadian dollar relative to the U.S.
dollar; regulatory changes by national and local governments, including permitting and licensing regimes and taxation policies;
regulations and political or economic developments in any of the countries where properties in which Osisko holds a royalty,
stream or other interest are located or through which they are held; risks related to the operators of the properties in wh ich
Osisko holds a royalty, stream or other interests; timely development, permitting, construction, commencement of production,
ramp-up (including operating and technical challenges) on any of the properties in which Osisko holds a royalty, stream or
other interest; rate and timing of production differences from resource estimates or production forecasts by operators of
properties in which Osisko holds a royalty, stream or other interest; the unfavorable outcome of any challenges or litigation
relating title, permit or license with respect to any of the properties in which Osisko holds a royalty, stream or other interests or
to Osisko’s right thereon; differences in rate and timing of production from resource estimates or production forecasts by
operators of properties in which Osisko holds a royalty, stream or other interest, including conversion from resources to
reserves and ability to replace resources; business opportunities that become available to, or are pursued by Osisko; continued
availability of capital and financing and general economic, market or business conditions; risks and hazards associated with
the business of exploring, development and mining on any of the properties in which Osisko holds a royalty, stream or other
interest, including, but not limited to unusual or unexpected geological and metallurgical conditions, slope failures or cave-ins,
flooding and other natural disasters or civil unrest or other uninsured risks, the integration of acquired assets and the responses
of relevant governments to the COVID-19 outbreak and the effectiveness of such response and the potential impact of COVID-
19 on Osisko’s business, operations and financial condition. 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 and with public disclosure (including forecast of production); the accuracy of public
statements and disclosures made by the owners or operators of such underlying properties (including expectations for the
development of underlying properties that are not yet in production); no adverse development in respect of any significant
property in which Osisko holds a royalty, stream or other interest; that statements and estimates relating to mineral reserve s
and resources by owners and operators of the properties in which Osisko holds a royalty, stream or other interest are accurate;
the Corporation’s ongoing income and assets relating to determination of its PFIC status; integration of acquired assets; and
the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated or
intended.
For additional information on risks, uncertainties and assumptions, please refer to the most recent Annual Information Form of
Osisko filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov which also provides additional general assumptions
in connection with these statements. Osisko cautions that the foregoing list of risk and uncertainties is not exhaustive. Investors
and others should carefully consider the above factors as w ell as the uncertainties they represent and the risk they entail.
Osisko believes that the assumptions reflected in those forward-looking statements are reasonable, but no assurance can be
given that these expectations will prove to be accurate as actual r esults and prospective events could materially differ from
those anticipated such the forward looking statements and such forward-looking statements included in this press release are
not guarantee of future performance and should not be unduly relied upon. These statements speak only as of the date of this
press release. Osisko undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise, other than as required by applicable law.
Osisko Gold Royalties Ltd
Consolidated Balance Sheets
(tabular amounts expressed in thousands of Canadian dollars)
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September 30, December 31,
2022 2021
$ $
Assets
Current assets
Cash 300,542 115,698
Amounts receivable 10,192 14,691
Inventories - 18,596
Other assets 1,128 3,941
311,862 152,926
Non-current assets
Investments in associates 322,009 125,354
Other investments 72,751 169,010
Royalty, stream and other interests 1,308,614 1,154,801
Mining interests and plant and equipment 7,209 635,655
Exploration and evaluation - 3,635
Goodwill 111,204 111,204
Other assets 1,958 18,037
2,135,607 2,370,622
Liabilities
Current liabilities
Accounts payable and accrued liabilities 8,306 30,049
Dividends payable 10,109 9,157
Provisions and other liabilities 906 12,179
Current portion of long-term debt 298,232 294,891
317,553 346,276
Non-current liabilities
Provisions and other liabilities 6,939 60,334
Long-term debt - 115,544
Deferred income taxes 83,739 68,407
408,231 590,561
Equity
Share capital 2,071,700 1,783,689
Warrants - 18,072
Contributed surplus 61,697 42,525
Equity component of convertible debentures 14,510 14,510
Accumulated other comprehensive income 55,011 58,851
Deficit (475,542) (283,042)
Equity attributable to Osisko Gold Royalties Ltd’s shareholders 1,727,376 1,634,605
Non-controlling interests - 145,456
Total equity 1,727,376 1,780,061
2,135,607 2,370,622