OSISKO REPORTS STRONG 2021 RESULTS AND PROVIDES 2022 GUIDANCE AND 5-YEAR OUTLOOK Record cash margin of $187.2 million Record operating cash flows from the royalties and streams segment of $153.2 million
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OSISKO REPORTS STRONG 2021 RESULTS
AND PROVIDES 2022 GUIDANCE AND 5-YEAR OUTLOOK
Record cash margin of $187.2 million
Record operating cash flows from the royalties and streams segment of $153.2 million
Montréal, February 24, 2022 – Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX &
NYSE) today announced its consolidated financial results for the fourth quarter and full year 2021, and
provides guidance for 2022 as well as an inaugural 5-year growth outlook. Amounts presented are in
Canadian dollars, except where otherwise noted.
2021 Financial Highlights
80,000 GEOs1 earned in 2021, in-line with guidance (2020 – 66,113 GEOs);
Record revenues from royalties and streams of $199.6 million (2020 – $156.6 million);
Consolidated cash flows from operating activities of $106.1 million (2020 – $108.0 million);
o Record operating cash flows from the royalties and streams segment 2 of $153.2 million
(2020 – $114.0 million);
o Operating cash flows from the mining exploration and development segment3 (i.e. Osisko
Development Corp. – TSX-V:ODV) of ($47.1) million (2020 – ($6.0) million);
Cash margin4 of 93% from royalties and streams or 97% excluding the Renard diamond stream
(2020 – 94% or 96% excluding the Renard diamond stream);
Consolidated net loss attributable to Osisko’s shareholders of $23.6 million, or $0.14 per share,
as a result of impairment and mining operating charges from Osisko Development Corp. (“Osisko
Development”);
Consolidated adjusted earnings4 of $59.3 million, or $0.35 per basic share (2020 – $48.4 million,
$0.30 per basic share);
Repurchase of 2.1 million common share for $30.8 million under the normal course issuer bid
(average acquisition price of $14.64 per share); and
Increased the quarterly dividend by 10% for an annualized dividend of $0.22 per share.
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Q4 2021 Financial Highlights
19,830 GEOs earned (Q4 2020 – 18,829 GEOs);
Record revenues from royalties and streams of $50.7 million (Q4 2020 – $48.8 million);
Cash margin of 93% from royalty and stream interests or 97% excluding the Renard diamond
stream (Q4 2020 – 94% or 97% excluding the Renard diamond stream);
Consolidated cash flows from operating activities of $12.8 million (Q4 2020 – $32.6 million);
o Operating cash flows from the royalties and streams segment of $35.1 million (Q4 2020
– $34.1 million);
o Operating cash flows from the mining exploration and development segment of
($22.3) million (Q4 2020 – ($1.5) million);
Consolidated net loss attributable to Osisko’s shareholders of $21.2 million, or $0.13 per basic
share (Q4 2020 – net earnings of $4.6 million, or $0.03 per basic share), as a result of impairment
and mining operating charges from Osisko Development; and
Consolidated a djusted earnings of $ 3.3 million, or $0.02 per basic share ( Q4 2020 –
$15.5 million, or $0.09 per basic share);
o Adjusted earnings from the royalties and streams segment of $23.8 million, or $0.14 per
basic share (Q4 2020 – $19.6 million or $0.12 per basic share);
o Adjusted loss from the mining exploration and development segment of $20.5 million, or
$0.12 per basic share (Q4 2020 – $4.1 million or $0.02 per basic share).
Sandeep Singh, President and CEO of Osisko commented: “We had a strong end to a record year on
many fronts in 2021. Our key assets continued to deliver, expand and ramp up, while many of our
development assets took meaningful strides forward towards commencing production.
We expect further catalysts on many of our key assets in 2022, including the Malartic underground,
Mantos, Eagle and Renard mines, as our operating partners continue to unlock value on large
prospective land packages in good jurisdictions. Those catalysts, amongst others, have led to a 10,000
to 15,000 GEO increase in guidance in 2022 versus our 2021 actual deliveries.
To better outline the significant longer-term organic growth in the Company , we have announced a n
inaugural 5-year growth outlook of between 130,000 and 140,000 GEOs in 2026. The ability to grow by
10-12% compounded annually, on assets that were acquired in the last market downturn, is expected
to lead to greater cash flow s and diversification for the Company . Importantly, we benefit from other
significant assets which we believe will also contribute to growth in this decade, but which we have not
included in the outlook given uncertainties on timing.”
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Financial Highlights by Operating Segment
(in thousands of dollars, except per share amounts)
As a result of its 75% ownership in Osisko Development, the assets, liabilities, results of operations and
cash flows of the Company consolidate the activities of Osisko Development and its subsidiaries. The
table below provides some financial highlights p er operating segment. More information per operating
segment can be found in the consolidated financial statements and management’s discussion and
analysis for the three months ended December 31, 2021.
(i) Osisko Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries. Represents the royalty, stream a nd other
interests segment.
(ii) Osisko Development Corp. and its subsidiaries (carve-out of the mining activities of Osisko Gold Royalties prior to the reverse take-over transaction
completed on November 25, 2020 and creating Osisko Development). Represents the exploration, evaluation and development of mining projects
segment.
(iii) As at December 31, 2021 and 2020.
(iv) Cash margin is a non-IFRS financial performance measure which has no standard definition under IFRS. It is calculated by deducting the cost of sales
from the revenues. Please refer to the Notes included in this press release for a reconciliation of the cash margin.
(v) Attributable to Osisko Gold Royalties Ltd’s shareholders.
(vi) Adjusted earnings (loss) and adjusted earnings (loss) per basic share are non -IFRS financial performance measures which have no standard definition
under IFRS. Refer to the Notes included in this press release for a reconciliation of the cash margin.
(vii) Consolidated results are net of the intersegment transactions and adjustments related to the accounting policies.
For the three months ended December 31,
Osisko Gold Royalties (i) Osisko Development (ii) Consolidated (vii)
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
Cash (iii) 82,291 105,097 33,407 197,427 115,698 302,524
Revenues 50,673 64,560 2,827 - 50,673 64,560
Cash margin (iv) 47,027 46,324 - - 47,027 46,324
Gross profit 34,763 32,776 - - 34,763 32,776
Operating expenses
(G&A, bus. dev and exploration) (5,839) (8,600) (5,801) (4,873) (11,640) (13,473)
Mining operating expenses - - (12,919) - (12,919) -
Net earnings (loss) 21,879 11,756 (57,102) (7,771) (35,223) 3,985
Net earnings (loss) attributable to Osisko’s
shareholders 21,879 11,756 (43,063) (7,124) (21,184) 4,632
Net earnings (loss) attributable to Osisko’s
shareholders per share (v)
0.13
0.07
(0.26)
(0.04)
(0.13)
0.03
Adjusted net earnings (loss) (vi) 23,808 19,577 (20,519) (4,093) 3,289 15,484
Adjusted net earnings (loss) per basic share (vi) 0.14 0.12 (0.12) (0.02) 0.02 0.09
Cash flows from operating activities (vii)
Before working capital items 40,276 36,211 (14,639) (8,154) 25,637 28,057
Working capital items (5,157) (2,113) (7,709) 6,689 (12,866) 4,576
After working capital items 35,119 34,098 (22,348) (1,465) 12,771 32,633
Cash flows from investing activities (vii) (23,772) (42,430) (18,655) (24,181) (42,427) (66,611)
Cash flows from financing activities (7,998) (39,007) 2,431 219,662 (5,567) 180,655
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Other Highlights
Announcement by Agnico Eagle Mines Limited and Yamana Gold Inc. of a positive construction
decision for the Odyssey underground mine project. The preliminary economic study outlines a
total of 7.29 million gold ounces to be mined, commencing in 2023 and extending the mine life
to at least 2039 based on approximately half of the current resources;
Mantos Copper S.A. (“Mantos”) announced a merger with Capstone, increasing visibility on
Mantos Blancos. Construction has been completed and ramp up is underway for the
Concentrator Debottlenecking Project, transitioning the asset to a 20,000 tonne per day sulphide
operation. Studies are underway for a further expansion to 27,000 tonnes per day;
Gold production ramped up at Victoria Gold Corp.’s (“Victoria”) Eagle mine during the course of
2021 with 105,324 ounces produced in the second half of 2021. Victoria heightened the pace of
exploration, targeting several areas to expand the resource base on the Dublin Gulch property.
Importantly, Victoria announced the initiation of “Project 250” aimed at increasing the average
annual gold production to 250,000 ounces of gold during 2023;
Took several positive steps towards ongoing commitments to ESG, including the publication of
the inaugural ESG report, an investment and partnership with Carbon Streaming Corporation
and commitment to the United Nations Global Compact;
Amendment of the revolving credit facility (the “Facility”) and increase of the amount available
by $150.0 million to $550.0 million, with an additional uncommitted accordion of up to
$100.0 million (for a total availability of up to $650.0 million);
In January 2022, Osisko Development entered into definitive agreements to acquire 100% of
Tintic Consolidated Metals LLC (“Tintic”). Osisko Bermuda Limited (“Osisko Bermuda”) entered
into a non -binding metals stream term sheet , with a wholly -owned subsidiary of Osisko
Development, for between US$20 million and US$40 million. In the event that the full amount of
US$40 million is drawn, Osisko Development will deliver to Osisko Bermuda 5% of all metals
produced from the Tintic property until 53,400 ounces of refined gold have been delivered and
4.0% thereafter;
In February 2022, Osisko Development announced a bought -deal private placement of
$90.0 million and a non -brokered private placement of US$110.3 million . After closing of t he
Tintic acquisition and the financings announced by Osisko Development, the ownership of the
Company in Osisko Development is expected to decrease to approximately 45%; and
Declared a quarterly dividend of $0.05 5 per common share payable on April 14, 2022 to
shareholders of record as of the close of business on March 31, 2022.
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2022 Guidance
Osisko’s 2022 guidance on royalty and stream interests is largely based on publicly available forecasts
from our operating partners. When publicly available forecasts on properties are not available, Osisko
obtains internal forecasts from the producers or uses management’s best estimate.
GEOs(i) earned and cash margin by interest are estimated as follows for 2022:
Low High Cash margin
(GEOs) (GEOs) (%)
Royalty interests 60,300 63,600 99.6%
Stream interests 29,700 31,400 79.6%
90,000 95,000 92.5%
(i) GEOs from royalty and stream interests held on assets owned and operated by Osisko Development are included in the outlook.
These GEOs are not recognized on a consolidated basis since they are cancelled on the consolidation.
For the 2022 guidance, deliveries of silver and cash royalties have been converted to GEOs using
commodity prices of US$1,800 per ounce of gold, US$23.50 per ounce of silver and an exchange rate
(US$/C$) of 1.26. GEOs from the Renard diamond stream were converted to GEOs using a price of
US$110 per carat for the period commencing on May 1, 2022 because, prior to such date, Osisko has
committed to reinvest the net proceeds from the stream through a bridge loan facility provided to the
operator.
5-Year Outlook
Osisko expects its portfolio to generate between 130,000 and 140 ,000 GEOs in 2026. The outlook
assumes the commencement of production at the San Antonio, Cariboo , Windfall and Back Forty
projects amongst others. It also assumes that Mantos will have reached its nameplate capacity following
the recent expansion of its activities, as well as increased production from certain other operators that
have announced planned expansions.
Beyond this substantial growth profile, Osisko owns several other growth assets, including Hermosa,
Pine Point, Spring Valley, Horne 5, Casino, Copperwood/White Pine, Amulsar and others, which have
not been factored in the current 5-year outlook, as their timelines are either later , or less clear. As the
operators provide further clarity on these assets, we will seek to include them in our long-term outlook.
This 5-year outlook is based on publicly available forecasts from our operating partners. When publicly
available forecasts on properties are not available, Osisko obtains internal forecasts from the producers
or uses management’s best estimate. The commodity price assumptions that were used in the 5 -year
outlook are based on current long-term consensus and a gold/silver price ratio of 75:1.
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Q4 2021 and Full Year 2021 Results Conference Call Details
Conference Call: Friday, February 25th, 2022 at 10:00 am EST
Dial-in Numbers: North American Toll-Free: 1 (888) 440-2180
Local and International: 1 (438) 803-0536
Access code: 1981388
Replay (available until March 11,
2022 at 11:59 pm EST):
North American Toll-Free: 1 (800) 770-2030
Local and International: 1 (647) 362-9199
Access code: 1981388
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 160 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
December 31,
Years ended
December 31,
2021 2020 2021 2020
Gold(i) $1,796 $1,874 $1,799 $1,770
Silver(ii) $23.33 $24.39 $25.14 $20.54
Exchange rate (US$/Can$)(iii) 1.2603 1.3030 1.2535 1.3413
(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 royalties and streams segment refers to the royalty, stream and other interests segment, which corresponds to the activities of Osisko
Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries.
(3) The mining exploration and development segment refers to the mining exploration, evaluation and devel opment segment, which
corresponds to the activities of Osisko Development Corp. and its subsidiaries.
(4) 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 less cost of sales (excluding depletion). Cash margin (in percentage of revenues) represents
the cash margin (in dollars) divided by revenues.
Three months ended
December 31,
Years ended
December 31,
2021 2020 2021 2020
$ $ $ $
Royalty and stream interests
Revenues 50,673 64,560 224,877 213,630
Less: Revenues from offtake interests - (15,796) (25,265) (57,056)
Revenues from royalty and stream interests 50,673 48,764 199,612 156,574
Cost of sales (3,646) (18,236) (37,646) (63,700)
Less: Cost of sales of offtake interests - 15,086 24,343 54,200
Cost of sales of royalty and stream interests (3,646) (3,150) (13,303) (9,500)
Revenues from royalty and stream interests 50,673 48,764 199,612 156,574
Less: Cost of sales of royalty and stream interests (3,646) (3,150) (13,303) (9,500)
Cash margin (in dollars) 47,027 45,614 186,309 147,074
Cash margin (in percentage of revenues) 93% 94% 93% 94%
Royalty and stream interests (excluding the Renard
diamond stream)
Revenues from royalty and stream interests 50,673 48,764 199,612 156,574
Less: Revenues from the Renard diamond stream (6,884) (4,284) (20,775) (8,692)
Revenues from royalty and stream interests, excluding the
Renard diamond stream 43,789 44,480
178,837 147,882
Cost of sales from royalty and stream interests (3,646) (3,150) (13,303) (9,500)
Less: Cost of sales from the Renard diamond stream 2,286 1,845 7,929 3,751
Cost of sales of royalty and stream interests, excluding the
Renard diamond stream (1,360) (1,305)
(5,374) (5,749)
Revenues from royalty and stream interests, excluding the
Renard diamond stream 43,789 44,480
178,837 147,882
Less: Cost of sales of royalty and stream interests, excluding
the Renard diamond stream (1,360) (1,305)
(5,374) (5,749)
Cash margin (in dollars) 42,429 43,175 173,463 142,133
Cash margin (in percentage of revenues) 97% 97% 97% 96%
Offtake interests
Revenues from offtake interests - 15,796 25,265 57,056
Less: Cost of sales of offtake interests - (15,086) (24,343) (54,200)
Cash margin (in dollars) - 710 922 2,856
Cash margin (in percentage of revenues) - 4% 4% 5%