OSISKO REPORTS Q3 2023 RESULTS Record quarterly revenues of $62.1 million and strong operating cash flows of $43.5 million
1
OSISKO REPORTS Q3 2023 RESULTS
Record quarterly revenues of $62.1 million
and strong operating cash flows of $43.5 million
Montréal, November 8, 2023 – Osisko Gold Royalties Ltd (the “Corporation” or “Osisko”) (OR: TSX & NYSE)
today announce d its consolidated financial results for the third quarter of 2023. Amounts presented are in
Canadian dollars, except where otherwise noted.
Highlights – Third Quarter of 2023
• 23,292 gold equivalent ounces (“GEOs1”) earned (23,850 GEOs in Q3 2022);
• Revenues from royalties and streams of $62.1 million ($53.7 million in Q3 2022);
• Cash flows generated by operating activities2 of $43.5 million ($51.1 million in Q3 2022);
• Net loss2 of $20.0 million, $0.11 per basic share ( net earnings of $28.0 million, $0.15 per basic share in Q3
2022), mostly as a result of a non- cash impairment charge and a write-off on assets related to the Renard
diamond mine, together totaling $32.4 million ($26.2 million, net of income taxes);
• Adjusted earnings3 of $22.4 million, $0.12 per basic share 3 (of $25.8 million, $0.14 per basic share in Q3
2022);
• Acquisition of a 3% gold net smelter return (“NSR”) royalty and 1% copper NSR royalty on the Costa Fuego
copper-gold project held by Hot Chili Limited for US$15.0 million ($19.9 million);
• Patriot Battery Metals Inc. published its maiden mineral resource estimate for the CV5 Spodumene Pegmatite
at its wholly-owned Corvette Property, located in the Eeyou Istchee James Bay region of Québec, on which
Osisko holds a sliding scale 1.5 - 3.5% on precious metals, and 2.0% on all other products, including Lithium,
on most (estimated at approximately 80% - 95% by Osisko) of the mineral resource estimate;
• Appointment of Mr. Paul Martin as Interim Chief Executive Officer; and
• Quarterly dividend of $0.06 per common share paid on October 16, 2023 to shareholders of record as of the
close of business on September 29, 2023.
Paul Martin, Interim CEO of Osisko commented: “When factoring in the variety of challenges faced by some of our
key operating partners during the third quarter, we are coming away satisfied with our overall performance. As we
head into the final three months of the year, and as previously noted, we are now trending towards the lower end
of our 2023 GEO guidance range. Of particular note is the Renard diamond stream, where the situation remains
fluid. As such, in contrast to what was previously expected, Osisko might now actually expect a GEO contribution
from the mine during the fourth quarter, however this will depend largely on rough diamond prices, and will come
in materially lower than what was originally budgeted for the period. Finally, Osisko remained very active on the
corporate development front both during the third quarter and after it, having first closed the Costa Fuego
transaction, and then, just last week, having announced the acquisition of a 1.0% NSR royalty on Shandong Gold’s
Namdini project in Ghana, where first gold production is expected in late 2024.”
Subsequent to September 30, 2023
• On October 27, 2023, Stornoway Diamonds (Canada) Inc. (“Stornoway”) announced the suspension of
operations at the Renard mine due to the growing uncertainty of diamond prices and the placement of
Stornoway under the protection of the Companies’ Creditors Arrangement Act.
2
• On October 30, 2023, Osisko announced the acquisition of a 1.0% NSR royalty covering the Namdini Gold
Project in Ghana. Osisko has closed the transaction with Savannah Mining Limited (“Savannah”),
acquiring a direct interest in 50% of Savannah’s 2.0% NSR royalty for total consideration of
US$35.0 million (excluding applicable taxes and levies).
• Declaration of a quarterly dividend of $0.06 per common share payable on January 15, 2024 to
shareholders of record as of the close of business on December 29, 2023.
Q3 2023 RESULTS CONFERENCE AND WEBCAST CALL DETAILS
Osisko provides notice of third quarter 2023 results and webcast and conference call details.
Results Release: Wednesday, November 8th, 2023 after market close
Conference Call: Thursday, November 9th, 2023 at 10:00 am ET
Dial-in Numbers:
(Option 1)
North American Toll-Free: 1 (888) 886-7786
Local and International: 1 (416) 764-8658
Conference ID: 61375331
Webcast link:
(Option 2)
https://viavid.webcasts.com/starthere.jsp?ei=1637185&tp_key=a659b2dd8c
Replay (available until
Saturday, December 9th at
10:00 am ET):
North American Toll-Free: 1 (877) 674-7070
Local and International: 1 (416) 764-8692
Playback Passcode: 375331#
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 180 royalties, streams and precious metal offtakes , including 23 producing assets .
Osisko’s portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic
mine, one of Canada’s largest gold mines.
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:
Grant Moenting Heather Taylor
Vice President, Capital Markets Vice President, Sustainability and Communications
Tel: (514) 940-0670 x116 Tel: (514) 940-0670 x105
Email: [email protected] Email: [email protected]
3
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.
Average Metal Prices and Exchange Rate
Three months ended
September 30,
Nine months ended
September 30,
2023 2022 2023 2022
Gold(i) $1,928 $1,729 $1,932 $1,824
Silver(ii) $23.57 $19.23 $23.31 $21.92
Exchange rate (US$/Can$)(iii) 1.3414 1.3056 1.3477 1.2892
(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) From continuing operations
(3) 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 and
(iii) adjusted earnings 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.
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,
2023 2022 2023 2022
$ $ $ $
Royalty interests
Revenues 37,410 34,456 115,911 104,028
Less: cost of sales (excluding depletion) (193) (490) (533) (772)
Cash margin (in dollars) 37,217 33,966 115,378 103,256
Depletion (5,972) (7,312) (18,430) (20,369)
Gross profit 31,245 26,654 96,948 82,887
Stream interests
Revenues 24,659 19,205 66,245 51,867
Less: cost of sales (excluding depletion) (4,144) (3,917) (12,105) (10,572)
Cash margin (in dollars) 20,515 15,288 54,140 41,295
Depletion (10,922) (6,849) (24,926) (16,941)
Gross profit 9,593 8,439 29,214 24,354
Royalty and stream interests
Total cash margin (in dollars) 57,732 49,254 169,518 144,551
Divided by: total revenues 62,069 53,661 182,156 155,895
Cash margin (in percentage of revenues) 93.0% 91.8% 93.1% 92.7%
Total – Gross profit 40,838 35,093 126,162 107,241
4
Adjusted earnings and adjusted earnings per basic share
Adjusted earnings 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 per basic share is obtained from the adjusted earnings divided by the weighted average number of common shares
outstanding for the period.
Three months ended
September 30,
Nine months ended
September 30,
2023 2022 2023 2022
(in thousands of dollars, except per share
amounts)
$ $ $ $
Net (loss) earnings from continuing
operations (19,999) 28,014 18,810 62,877
Adjustments:
Impairment of royalty and stream
interests 17,490 - 24,119 -
Expected credit loss and write-off of
other investments 17,349 276 37,480 1,180
Foreign exchange loss (gain) 3,399 (14,260) 3,424 (22,729)
Unrealized net loss on investments 2,513 758 4,482 12,172
Share of loss (income) of associates 4,754 1,143 (8,268) (383)
Deferred income tax expense (3,146) 9,888 7,584 23,261
Adjusted earnings 22,360 25,819 87,631 76,378
Weighted average number of
common shares outstanding (000’s) 185,516 184,839 185,159 179,101
Adjusted earnings per basic share 0.12 0.14 0.47 0.43
5
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 Canadian 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 ex pectations 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, busines s
prospects and opportunities future demand for and fluctuation of prices of commodities (including outlook on gold, silver,
diamonds, other commodities) currency markets and general market conditions. In addition, statements and estimates
(including data in tables) relating to mineral reserves an d 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 negati ve variations), or that events or conditions "will", "would",
"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 r esults may accordingly differ materially from those in
forward-looking statements. Such risk factors include, without limitation, (i) with respect to properties in which Osisko holds a
royalty, stream or other interest; risks related to: (a) the operators of the properties, (b) timely development, permitting,
construction, commencement of production, ramp-up (including operating and technical challenges), (c) differences in rate and
timing of production from resource estimates or production forecasts by operators, (d) differences in conversion rate from
resources to reserves and ability to replace resources, (e) the unfavorable outcome of any challenges or litigation relating title,
permit or license, (f) hazards and uncertainty associated with the business of exploring, development and mining 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; with respect to ext ernal factors: (a) fluctuations in the prices of the
commodities that drive royalties, streams, offtakes and investments held by Osisko, (b) fluctuations in the value of the Canadian
dollar relative to the U.S. dollar, (c) 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, (d) continued availability of
capital and financing and general economic, market or business conditions, and (e) responses of relevant governments to the
COVID-19 outbreak and the effectiveness of such response and the potential im pact of COVID -19 on Osisko’s business,
operations and financial condition; with respect to internal factors: (a) business opportunities that may or not become available
to, or are pursued by Osisko or (b) the integration of acquired assets. The forward-looking statements contained in this press
release are based upon assumptions management believes to be reasonable, including, without limitation: the absence of
significant change in the Corporation’s ongoing income and assets relating to determination of its Passive Foreign Investment
Company ("PFIC”) status; the absence of any other factors that could cause actions, events or results to differ from those
anticipated, estimated or intended and, with respect to properties in which Osisko holds a royalty, stream or other interest, (i)
the ongoing operation of the properties by the owners or operators of such properties in a manner consistent with past practice
and with public disclosure (including forecast of production), (ii) 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), (iii) no adverse development in respect of any significant property, (iv) t hat statements and estimates
relating to mineral reserves and resources by owners and operators are accurate and (v) the implementation of an adequate
plan for integration of acquired assets.
For additional information on risks, uncertainties and assumptions, please refer to the most recent Annual Information Form of
Osisko filed on SEDAR + at www.sedarplus.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 well as the un certainties 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 results and pr ospective 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
As at September 30, 2023 and December 31, 2022
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars)
6
September 30, December 31,
2023 2022
$ $
Assets
Current assets
Cash 70,754 90,548
Short-term investments 6,509 -
Amounts receivable 7,315 11,700
Other assets 4,047 2,546
88,625 104,794
Non-current assets
Investments in associates 314,633 319,763
Other investments 99,454 73,504
Royalty, stream and other interests 1,553,282 1,378,253
Goodwill 111,204 111,204
Other assets 8,920 8,783
2,176,118 1,996,301
Liabilities
Current liabilities
Accounts payable and accrued liabilities 7,557 6,825
Dividends payable 11,108 10,121
Lease liabilities 1,141 921
19,806 17,867
Non-current liabilities
Lease liabilities 7,127 6,701
Long-term debt 315,390 147,950
Deferred income taxes 96,235 86,572
438,558 259,090
Equity
Share capital 2,094,048 2,076,070
Contributed surplus 78,661 77,295
Accumulated other comprehensive income 43,658 47,435
Deficit (478,807) (463,589)
1,737,560 1,737,211
2,176,118 1,996,301
Osisko Gold Royalties Ltd
Consolidated Statements of Income
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)
7
Three months ended
September 30,
Nine months ended
September 30,
2023 2022 2023 2022
$ $ $ $
Revenues 62,069 53,661 182,156 155,895
Cost of sales (4,337) (4,407) (12,638) (11,344)
Depletion (16,894) (14,161) (43,356) (37,310)
Gross profit 40,838 35,093 126,162 107,241
Other operating expenses
General and administrative (11,697) (5,186) (25,214) (14,962)
Business development (1,337) (1,203) (4,130) (3,884)
Impairment of royalty and stream interests (17,490) - (24,119) -
Operating income 10,314 28,704 72,699 88,395
Interest income 1,115 3,054 5,348 6,020
Finance costs (6,086) (5,480) (12,401) (16,949)
Foreign exchange (loss) gain (3,390) 14,482 (3,543) 23,011
Share of (loss) income of associates (4,754) (1,143) 8,268 383
Other losses, net (19,862) (1,034) (41,962) (13,352)
(Loss) earnings before income taxes (22,663) 38,583 28,409 87,508
Income tax recovery (expense) 2,664 (10,569) (9,599) (24,631)
Net (loss) earnings from continuing operations (19,999) 28,014 18,810 62,877
Net loss from discontinued operations - (244,655) - (268,475)
Net (loss) earnings (19,999) (216,641) 18,810 (205,598)
Net (loss) earnings attributable to:
Osisko Gold Royalties Ltd’s shareholders (19,999) (158,647) 18,810 (141,162)
Non-controlling interests - (57,994) - (64,436)
Net (loss) earnings per share from
continuing operations attributable to
Osisko Gold Royalties Ltd’s shareholders
Basic and diluted (0.11) 0.15 0.10 0.35
Net (loss) earnings per share attributable to
Osisko Gold Royalties Ltd’s shareholders
Basic and diluted (0.11) (0.86) 0.10 (0.79)
Osisko Gold Royalties Ltd
Consolidated Statements of Cash Flows
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars)
8
Three months ended
September 30,
Nine months ended
September 30,
2023 2022 2023 2022
$ $ $ $
Operating activities
Net (loss) earnings from continuing operations (19,999) 28,014 18,810 62,877
Adjustments for:
Share-based compensation 3,967 2,052 9,124 5,010
Depletion and amortization 17,223 14,423 44,248 38,108
Impairment of royalty and stream interests 17,490 - 24,119 -
Expected credit loss and write-off of other investments 17,349 276 37,480 1,180
Finance costs 122 1,831 369 5,333
Share of loss (income) of associates 4,754 1,143 (8,268) (383)
Change in fair value of financial assets at fair value
through profit and loss 2,513 758 6,267 15,824
Net gain on dilution of investments - - (4,842) (3,604)
Loss on the deemed disposal of an associate - - 3,057 -
Foreign exchange loss (gain) 3,399 (14,260) 3,424 (22,729)
Deferred income tax (recovery) expense (3,146) 9,888 7,584 23,261
Other 108 26 344 36
Net cash flows provided by operating activities
before changes in non-cash working capital items 43,780 44,151 141,716 124,913
Changes in non-cash working capital items
(316) 6,916 (5,410) 1,626
Net operating cash flows provided by continuing operations 43,464 51,067 136,306 126,539
Net operating cash flows used by discontinued operations - (13,030) - (65,116)
Net cash flows provided by operating activities 43,464 38,037 136,306 61,423
Investing activities
Acquisitions of short-term investments (2,676) - (6,473) -
Acquisitions of investments - (1,494) (53,279) (8,174)
Proceeds on disposal of investments 5,022 - 5,028 2,960
Acquisitions of royalty and stream interests (26,768) (23,073) (239,530) (32,363)
Cash outflow from deconsolidation of Osisko Development - (133,138) - (133,138)
Other (37) (15) (43) (18)
Net investing cash flows used by continuing operations (24,459) (157,720) (294,297) (170,733)
Net investing cash flows used by discontinued operations - (20,539) - (114,984)
Net cash flows used in investing activities (24,459) (178,259) (294,297) (285,717)
Financing activities
Bought deal equity financing - - - 311,962
Share issue costs - - - (13,941)
Increase in long-term debt, net of discount on banker’s
acceptances
19,802
-
206,711
-
Repayment of long-term debt, net of discount on banker’s
acceptances (28,151) - (41,614) (113,120)
Exercise of share options and shares issued under the
share purchase plan
57
123
10,619
1,057
Normal course issuer bid purchase of common shares - (16,451) - (21,330)
Dividends paid (10,321) (9,770) (29,366) (28,248)
Withholding taxes on settlement of restricted and deferred
share units
- - (4,349) (2,224)
Other (265) (776) (711) (1,207)
Net financing cash flows (used) provided by continuing operations (18,878) (26,874) 141,290 132,949
Net financing cash flows (used) provided by discontinued operations - (1,529) - 245,833
Net cash flows (used) provided by financing activities (18,878) (28,403) 141,290 378,782
Increase (decrease) in cash before effects of exchange
rate changes on cash
127 (168,625)
(16,701) 154,488
Effects of exchange rate changes on cash
Continuing operations 594 15,529 (3,093) 23,837
Discontinued operations - 4,355 - 6,519
Increase (decrease) in cash 721 (148,741) (19,794) 184,844
Cash – beginning of period 70,033 449,283 90,548 115,698
Cash – end of period 70,754 300,542 70,754 300,542