Osisko Reports Second Quarter 2020 Results and Updated Guidance FOR Second Half of 2020
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OSISKO REPORTS SECOND QUARTER 2020 RESULTS
AND UPDATED GUIDANCE FOR SECOND HALF OF 2020
Montréal, August 5, 2020 – Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX & NYSE)
today announced its consolidated financial results for the second quarter of 2020.
Highlights
Updated guidance for the second half of the year of 33,000 to 35,000 gold equivalent ounces1
(“GEOs”);
Revenues from royalties and streams of $28.7 million (Q2 2019 – $33.8 million);
Cash flows from operating activities of $ 15.4 million (Q2 2019 – $21.4 million); $18.6 million
before changes in non-cash working capital items (Q2 2019 – $23.5 million);
Earned 12,386 GEOs (Q2 2019 – 19,651 GEOs);
Net earnings of $13.0 million, $0.08 per basic share (Q2 2019 – net loss of $6.5 million, $0.04
per basic share);
Adjusted earnings2 of $5.7 million or $0.03 per basic share (Q2 2019 – $8.2 million, $0.05 per
basic share);
Cash operating margin 3 of 95% from royalty and stream interests, generating $ 27.2 million in
operating cash flow, in addition to a cash operating margin of $0.6 million from offtake interests;
Cash on hand of $202.0 million and up to $400.0 million further available under the credit facility
as at June 30, 2020;
Closed a non -brokered private placement of $85.0 million with Investissement Québec on
April 1, 2020;
Improved the silver stream on the Gibraltar mine by investing $8.5 million to reduce the transfer
price from US$2.75 per ounce of silver to nil in April 2020;
Commercial production was declared by the operator of the Eagle Gold mine on July 1, 2020,
on which the Company holds a 5% NSR royalty;
As a result of the COVID -19 pandemic, several of Osisko’s assets were temporarily placed on
care and maintenance by our operating partners during the second quarter, but the affected
assets have now largely resumed operations; and
Declared a quarterly dividend of $0.05 per common share paid on July 15, 2020 to shareholders
of record as of the close of business on June 30, 2020.
Performance
Sean Roosen, Chair and Chief Executive Officer, commented on the activities of the second quarter of
2020: “ Even though our results for the second quarter have been affected by the impacts of the
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COVID-19 pandemic, our business model remains extremely strong and the rising gold price helped to
partially offset the closures . We look forward to benefiting from the gol d price environment and our
assets being at full capacity for the rest of the year.”
Outlook
On March 23, 2020, given the uncertainties with respect to future developments related to the COVID-
19 pandemic, including the duration, severity and scope of the outbreak, the actions taken to contain or
treat the COVID‑19 outbreak, and impacts on mining operations, Osisko announced the withdrawal of
its 2020 production guidance until further notice.
As the main mining assets on which Osisko holds a royalty, stream or other interest have mostly returned
to operations, Osisko has updated its guidance for the six months and the year ending December 31,
2020. This guidance excludes any potential impact on GEOs and cash margins if the Renard diamond
mine would restart its operations in 2020 or if additional periods of care and maintenance were
announced in light of the development of the COVID-19 pandemic.
Six months ending December 31, 2020 (i) Year ending December 31, 2020 (i)
Low High
Cash
margin Low High
Cash
margin
(GEOs) (GEOs) (%) (GEOs) (GEOs) (%)
Royalty interests 24,800 26,250 100 45,500 46,950 100
Stream interests 8,000 8,450 87 17,150 17,650 81
Offtake interests 200 300 2 850 900 3
33,000 35,000 63,500 65,500
(i) Excluding any potential revenues from the Renard diamond mine for the six months ending December 31, 2020.
For the full year 2020 guidance, actual results were used for the first semester and added to the forecast
for the second semester of the year. For the outlook of the last 6 months of 2020, silver and cash
royalties have been converted to GEOs using commod ity prices of US$ 1,900 per ounce of gold,
US$22 per ounce of silver and an exchange rate (US$/C$) of 1.33.
Q2 2020 Results Conference Call
Osisko will host a conference call on Thursday, August 6, 2020 at 10:00 am EDT to review and discuss
its second quarter 2020 results. Participants to the call must register using one of the methods below:
Online pre-registration: http://www.directeventreg.com/registration/event/7026109
Once you register, you will receive a confirmation which will have the dial in number and both the
Direct Event Passcode and your unique Registrant ID to join this call. For security reasons, please
do NOT share this information with anyone else.
You can alternatively, pre-register by phone:
Pre-phone registration: 1-(888) 869-1189 and provide the Conference ID which is 7026109 to the
Live Agent who will take the details from you live. Please pre-register in advance of the call.
The conference call replay will be available from 1:00 pm EDT on August 6, 2020 until 11:59 pm EDT
on August 13, 2020 with the following dial in numbers: 1-(800) 585-8367 (North American toll free) or 1-
(416) 621 -4642, access code 7026109. The replay will also be available on our websi te at
www.osiskogr.com.
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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 13 8
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 also owns the Cariboo gold project in Canada as well as a portfolio of publicly held resource
companies, including a 14.7% interest in Osisko Mining Inc., 18.6% interest in Osisko Metals
Incorporated and an 18.3% 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:
Sandeep Singh
President
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, other metals and cash royalties were converted into gold equivale nt
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
June 30,
Six months ended
June 30,
2020 2019 2020 2019
Gold (i) $1,711 $1,309 $1,645 $1,307
Silver(ii) $16 $15 $17 $15
Exchange rate (US$/Can$)(iii) 1.3853 1.3377 1.3651 1.3336
(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) The Company has included certain non-IFRS measures including “Adjusted Earnings” and “Adjusted Earnings per basic share” to
supplement its consolidated financial statements, which are presented in accordance with IFRS.
The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with
an improved ability to evaluate the underlying performance of the Company. Non -IFRS measures do not have any standardized
meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The
data 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.
“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 (lo sses) on disposal of exploration and
evaluation assets”, “Unrealized gain (loss) on investments”, “”, “Share of loss of associates”, “Deferred income tax expense
(recovery)” and other unusual items such as transaction costs.
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
June 30,
Six months ended
June 30,
2020 2019 2020 2019
(in thousands of dollars, except per share
amounts)
$ $ $ $
Net earnings (loss) 13,048 (6,547) (270) (33,096)
Adjustments:
Impairment of assets 3,117 - 30,323 38,900
Foreign exchange loss (gain) 544 484 (1,557) 1,643
Unrealized (gain) loss on investments (13,923) 5,298 (15,458) 5,333
Share of loss of associates 1,458 8,780 3,174 10,542
Deferred income tax expense (recovery) 1,489 216 (2,025) (9,266)
Adjusted earnings 5,733 8,231 14,187 14,056
Weighted average number of
common shares outstanding (000’s) 164,733 154,988 160,067 155,023
Adjusted earnings per basic share 0.03 0.05 0.09 0.09
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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 (loss) and related notes (In thousands of dollars):
Three months ended
June 30,
Six months ended
June 30,
2020 2019 2020 2019
$ $ $ $
Revenues 40,758 131,606 93,363 232,332
Less: Revenues from offtake interests (12,025) (97,825) (26,796) (165,051)
Revenues from royalty and stream interests 28,733 33,781 66,567 67,281
Cost of sales (12,945) (100,093) (30,228) (170,197)
Less: Cost of sales of offtake interests 11,454 96,642 25,376 163,152
Cost of sales of royalty and stream interests (1,491) (3,451) (4,852) (7,045)
Revenues from royalty and stream interests 28,733 33,781 66,567 67,281
Less: Cost of sales of royalty and stream interests (1,491) (3,451) (4,852) (7,045)
Cash margin from royalty and stream interests 27,242 30,330 61,715 60,236
95% 90% 93% 90%
Revenues from offtake interests 12,025 97,825 26,796 165,051
Less: Cost of sales of offtake interests (11,454) (96,642) (25,376) (163,152)
Cash margin from offtake interests 571 1,183 1,420 1,899
5% 1% 5% 1%
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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 n ot 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 "should" occur including, without limitation, the performance of the assets
of Osisko, that sufficient funding will be available to fund work at the Cariboo Project, that significant value will be created within
the accelerator group of companies 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 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 limita tion:
the uncertainties related to the COVID -19 impacts, the 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 capit al 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 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 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 o r
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 accu racy 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 or results to differ fr om
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 such statements. Investors ar e
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 date of this press release and is subject to change aft er
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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June 30, December 31,
2020 2019
$ $
Assets
Current assets
Cash 201,971 108,223
Short-term investments 21,105 20,704
Amounts receivable 8,355 6,330
Other assets 5,878 5,172
237,309 140,429
Non-current assets
Investments in associates 123,907 103,640
Other investments 107,954 67,886
Royalty, stream and other interests 1,128,673 1,130,512
Mining interests and plant and equipment 369,536 343,693
Exploration and evaluation 43,065 42,949
Goodwill 111,204 111,204
Other assets 6,940 6,940
2,128,588 1,947,253
Liabilities
Current liabilities
Accounts payable and accrued liabilities 14,379 18,772
Dividends payable 8,259 7,874
Current portion of long-term debt 49,298 -
Provisions and other liabilities 2,377 1,289
74,313 27,935
Non-current liabilities
Provisions and other liabilities 28,918 29,365
Long-term debt 372,354 349,042
Deferred income taxes 48,327 47,465
523,912 453,807
Equity
Share capital 1,742,111 1,656,350
Warrants 18,072 18,072
Contributed surplus 38,220 37,642
Equity component of convertible debentures 17,601 17,601
Accumulated other comprehensive income 60,712 13,469
Deficit (272,040) (249,688)
1,604,676 1,493,446
2,128,588 1,947,253
Osisko Gold Royalties Ltd
Consolidated Statements of Income (Loss)
For the three and six months ended June 30, 2020 and 2019
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)
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Three months ended
June 30,
Six months ended
June 30,
2020 2019 2020 2019
$ $ $ $
Revenues 40,758 131,606 93,363 232,332
Cost of sales (12,945) (100,093) (30,228) (170,197)
Depletion of royalty, stream and other
interests
(8,692) (11,825) (22,392) (24,201)
Gross profit 19,121 19,688 40,743 37,934
Other operating expenses
General and administrative (5,818) (4,574) (12,102) (10,475)
Business development (1,634) (1,786) (2,772) (3,524)
Exploration and evaluation (34) (58) (76) (91)
Impairment of assets - - (26,300) (38,900)
Operating income (loss) 11,635 13,270 (507) (15,056)
Interest and dividend income 1,075 920 2,196 2,092
Finance costs (6,636) (5,792) (13,498) (11,539)
Foreign exchange (loss) gain (608) (491) 1,718 (1,612)
Share of loss of associates (1,458) (8,780) (3,174) (10,542)
Other gains (losses), net 10,806 (5,298) 11,435 (5,333)
Earnings (loss) before income taxes 14,814 (6,171) (1,830) (41,990)
Income tax (expense) recovery (1,766) (376) 1,560 8,894
Net earnings (loss) 13,048 (6,547) (270) (33,096)
Net earnings (loss) per share
Basic and diluted 0.08 (0.04) - (0.21)