OSISKO REPORTS STRONG FIRST QUARTER 2021 RESULTS Operating cash flows from royalty and stream segment of $36.7 million Record cash margin of $46.5 million
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OSISKO REPORTS STRONG FIRST QUARTER 2021 RESULTS
Operating cash flows from royalty and stream segment of $36.7 million
Record cash margin of $46.5 million
Montréal, May 11, 2021 – Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX & NYSE)
today announced its consolidated financial results for the first quarter of 2021. Amounts presented are
in Canadian dollars, except where otherwise noted.
Financial Highlights
Earned 19,960 GEOs1 (Q1 2020 –18,159 GEOs)
Record revenues from royalties and streams of $49.0 million (Q1 2020 – $37.8 million)
Cash margin4 of 94% from royalty and stream interests (Q1 2020 – 91%)
Consolidated cash flows from operating activities of $21.3 million (Q1 2020 – $23.8 million)
o Operating cash flows from the royalty and stream segment2 of $36.7 million
o Operating cash flows from the mining exploration and development segment3 (i.e. Osisko
Development Corp. – TSX-V:ODV) of ($15.4) million
Net earnings attributable to Osisko’s shareholders of $10.6 million, or $0.06 per basic share
(Q1 2020 – net loss of $13.3 million, or $0.09 per basic share)
Adjusted earnings5 of $18.4 million, or $0.11 per basic share3 (Q1 2020 – $7.5 million, or $0.05
per basic share)
o Adjusted earnings5 from the royalty and stream segment2 of $23.4 million, or $0.14
per basic share5
o Adjusted loss5 from the mining exploration and development segment4 of $5.0 million, or
$0.03 per basic share5
Sandeep Singh, President and CEO of Osisko commented on the activities of the first quarter of 2021:
“The first quarter saw our royalty and streaming business continue to generate record cash margins and
strong operating cash flows. This bodes well as our operating assets continue to perform, ramp up and
expand over the coming quarters. We were also able to, relatively cheaply, acquire medium and longer-
term royalty exposure to some highly promising exploration and development properties while
maintaining a disciplined approach to growth.
In Q1, we also progressed our ambition to be a leader in the Environmental, Social and Governance
(“ESG”) space with the publication of our inaugural ESG report and by entering into an investment and
strategic partnership with Carbon Streaming Corp. The partnership leverages our streaming expertise
to fund capital projects that reduce greenhouse gas emissions.”
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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 o f Osisko Development and its subsidiaries. The
table below provides some financial highlights per operating segment. More information per operating
segment can be found in the consolidated financial statements and management’s discussion analysis
for the three months ended March 31, 2021.
(i) Osisko and its subsidiaries, excluding Osisko Development and its subsidiaries. Represents the royalties, streams and other interests segment.
(ii) Osisko Development and its subsidiaries (carve-out of the mining activities of Osisko prior to the reverse take -over transaction completed on
November 25, 2020 and creating Osisko Development). Represents the mining exploration, evaluation and development segment.
(iii) As at March 31, 2021 and December 30, 2020.
(iv) Cash margin is a non-IFRS financial performance measure which has no standard definition under IFRS. I t is calculated by deducting the cost of sales
from the revenues. Please refer to the Notes at the end of this press release for a reconciliation.
(v) Attributable to Osisko’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. Please refer to the Notes at the end of this press release for a reconciliation .
(vii) Consolidated results are net of the intersegment transactions.
Other Highlights
Published Osisko’s inaugural ESG report and commitment to the United Nations Global Compact
(“UN Global Compact”)
Completed an initial investment and strategic partnership of $3.5 million with Carbon Streaming
Corp. to promote global decarbonization and biodiversity efforts through carbon credit streaming
transactions
In February 2021, Osisko repaid a $50.0 million convertible debenture and drew its credit facility
by the same amount, thereby reducing the interest payable by approximately 1.5% per annum
In February 2021, Agnico Eagle Mines Limited (“Agnico Eagle”) and Yamana Gold Inc.
(“Yamana”) announced a positive construction decision for the Odyssey underground project
(the “Odyssey Project”) at the Canadian Malartic mine. The preliminary economic study shows
a total of 7.29 million ounces of resources (6.18 million tonnes at 2.07 g/t Au indicated resources
and 75.9 million tonnes at 2.82 g/t Au inferred resources). Underground mine production is
planned to start in 2023 and is expected to ramp up to a n average of 545,400 gold ounces per
year from 2029 to 2039
Acquired for cancellation 347,400 common shares for $4.5 million (average acquisition cost of
$12.85 per share)
For the three months ended March 31,
Osisko Gold Royalties (i) Osisko Development (ii) Consolidated
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
Cash (As at March 31, 2021 and Dec. 31, 2020) (iii) 119,650 105,097 200,980 197,427 320,630 302,524
Revenues 66,923 52,605 - - 66,923 52,605
Cash margin (iv) 46,526 35,322 - - 46,526 35,322
Gross profit 34,599 21,622 - - 34,599 21,622
Operating expenses
(G&A, bus. dev and exploration) (6,029) (6,217) (5,201) (1,247) (11,230) (7,464)
Net earnings (loss) 13,464 (12,993) (3,701) (325) 9,763 (13,318)
Net earnings (loss) per share (v) 0.08 (0.09) (0.02) (0.00) 0.06 (0.09)
Adjusted net earnings (loss) (vi) 23,439 9,778 (5,042) (2,231) 18,397 7,547
Adjusted net earnings (loss) per basic share (vi) 0.14 0.06 (0.03) (0.01) 0.11 0.05
Cash flows from operating activities (vii) 36,738 25,736 (9,704) (1,936) 21,324 23,800
Cash flows from investing activities (vii) (13,781) (23,496) (21,708) (15,152) (29,779) (38,648)
Cash flows from financing activities (7,511) 48,485 35,613 11,882 28,102 60,367
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In January and February 2021, Osisko Development Corp. (“Osisko Development”) closed a
non-brokered private placement for gross proceeds of $79.8 million (of which $73.9 million were
received in 2020)
In March 2021, Osisko Development closed a brokered private placement of flow-through shares
for gross proceeds of $33.6 million
Declared a quarterly dividend of $0.05 per common share paid on April 15, 2021 to shareholders
of record as of the close of business on March 31, 2021
Select Asset Updates
Canadian Malartic Underground Construction Progress
Agnico Eagle and Yamana have commenced construction of the Odyssey Project at the Canadian
Malartic mine. The preliminary economic assessment published on SEDAR estimates 545,000 ounces
of gold per annum from 2029 to 2039, thereby extending the life of mine of our cornerstone asset fo r
decades to come. The ramp and underground project are on schedule with approximately 362 linear
metres of development completed in the first quarter of 2021, reaching a depth of 74 metres below
surface. Shaft preparation work is underway and construction on the headframe foundation is expected
to start in the second quarter of 2021.
At the Odyssey Project, a 970 -metre step -out drill hole has intersected the eastern down plunge
extension of the East Gouldie Zone. This hole intersected 2.7 g/t gold over 10.9 metres, including 3.1 g/t
gold over 7.2 metres at approximately 1,995 metres depth (Figure 1). This new intercept is located within
the boundaries of Osisko’s 5% net smelter return (“NSR”) royalty and suggests that the current mineral
resources at East Gouldie could be expanded significantly down-plunge towards the east. Drilling is also
underway to infill the East Gouldie Zone to 75 -metre spacing. Highlights from this program include:
6.3 g/t gold over 22.6 metres at 1,482 metres depth and 3.7 g/t gold over 58.6 metres at 1,580 metres
depth.
Osisko holds a 5% NSR royalty on East Gouldie, Odyssey South and the western half of East Malartic
and a 3% NSR royalty on Odyssey North and the eastern half of Eas t Malartic. For more information,
refer to Agnico Eagle’s press release dated April 29, 2021 entitled “Agnico Eagle Reports First Quarter
2021 Results - Record Quarterly Gold Production; Drilling Identifies Potentially Significant Extension to
the East Gouldie Zone at Odyssey; Updated Climate Change Strategy Outlined in 2020 Sustainability
Report” filed on www.sedar.com.
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Figure 1. Composites long section from Agnico Eagle’s April 29, 2021 press release showing exploration
highlights on the East Gouldie deposit.
Upper Beaver/Kirkland Lake Exploration Success and Project Timing
In the first quarter of 2021, Agnico Eagle completed 67 drill holes (21,014 metres) at Upper Beaver
focused on infill drilling and mineral resource conversion. Highlights from the drilling included 62.6 g/t
gold (28.1 g/t capped at 90 g/t gold) and 0.97% copper over 16.8 metres at approximately 1,200 metres
depth. This is the best intersection ever reported from Upper Beaver. An update on the drilling program
is expected to be released in the second quarter of 2021 and an internal technical evaluation of the
project is expected to be completed in late 2021.
On April 13, 2021, Agnico Eagle presented an overview of its project pipeline at the World Gold Forum,
including the Upper Beaver /Kirkland Lake project. Current development concepts suggest annual
production from Upper Beaver of 180-240koz gold at all-in sustaining costs of US$700-750 per ounce.
Subject to permitting timelines, production could potentially commence in 2027. Osisko holds a 2 %
NSR royalty on Agnico Eagle’s Kirkland Lake project, including Upper Beaver.
https://s21.q4cdn.com/374334112/files/doc_presentations/2021/AEM_World-Gold-Forum-April-13-14-
2021.pdf
Osisko Development Progress
In the first quarter of 2021, a total of approximately 48,000 metres were drilled as part of the exploration
and resource conversion program on the Cariboo gold project. Up to ten diamond drill rigs were utilized.
The drilling confirmed down dip extensions of mineralized veins and high grade intercepts within the
current mineral resource estimate. Drill highlights included 22.76 g/t over 7 metres at Mosquito Creek
and 6.97 g/t over 6.5 metres at Valley Zone. For more information, refer to Osisko Development’s press
release dated April 27, 2021 entitled “Osisko Development Intersects 22.76 g/t Gold over 7 Meters and
7.73 g/t Gold over 14 Meters on Island and Cow Deposits Infill and Expansion Drilling” filed on
www.sedar.com.
Osisko Development expects regulatory permitting approval to begin development of an underground
access for a 10,000 tonne bulk sample in the second quarter of 2021. The bulk sample permit intends
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to replicate the Cariboo Gold Project’s mining conditions by mining two stopes and processing the
mineralized material th rough an ore sorter on site. Recent ore sorter tests have shown excellent
capability of excluding waste rock from the processing stream to save on costs and increase feed grade.
A new ore sorter was purchased in the last quarter of 2020 and is expected to arrive in Wells during the
third quarter of 2021 with test work beginning before year-end.
The Bonanza Ledge II mine located on the Cariboo gold project has made significant progress in the
first quarter. A stockpile of mineralized material has been transported to the QR mill. The mill is being
re-commissioned after conversion to carbon in leach (CIL) and several improved material handling
systems. First gold pour from Bonanza Ledge II is expected in Q2.
Osisko holds a 5% NSR royalty on the Cariboo property, including the Bonanza Ledge II mine.
On the San Antonio project in Sonora Mexico, Osisko Development has initiated a drill campaign to
confirm and expand on the S apuchi gold depo sit. They have also initiated metallurgical tests and
engineering design to advance the treatment of the gold stockpile mined by the previous operator.
Osisko Bermuda Limited, a subsidiary of Osisko, holds a 15% gold and silver stream on the San Antonio
project.
Mantos Update
The Mantos Blancos Concentrator Debottlenecking Project (“MB-CDP”) has achieved a total progress
of 79%, in line with the targeted progress. The main project milestones are maintained, with construction
scheduled to be completed in the second quarter of 2021, and the projec t completion date scheduled
for the fourth quarter of 2021.
The expansion is expected to increase the throughput of the operation’s sulphide concentrator plant
from 4.3 million tonnes per year to 7.3 million tonnes per year by the fourth quarter of 2021 and extend
the life of the mine to 2035. Annual deliveries of refined silver to Osisko during the first five years
following commissioning of the expansion are expected to average approximately 1.2 million ounces of
silver per year.
Windfall PEA Update
In April 2021, Osisko Mining Inc. (“Osisko Mining”) released an updated preliminary economic
assessment (“PEA”) for the Windfall gold project which estimates an after-tax internal rate of return of
39% and after-tax net present value of $1.5 billion, using a gold price of US$1,500 per ounce. The PEA
highlights average gold production of 238,000 ounces per year for the 18 year mine life. The first seven
years of full production will average 300,000 ounces per year at an average diluted grade of 8.1 g/t Au.
For more information, refer to Osisko Mining’s press release dated April 7, 2021 entitled “Osisko Mining
Delivers Positive PEA Update for Windfall”, filed on www.sedar.com.
Osisko Mining also announced it has placed an order for grinding equipment and ancillaries from
FLSmidth for the Windfall project. The grinding mills have a capacity of processing up to 3,900 tonnes
per day based on 92% availability. The equipment is expected to be delivered to the Windfall project in
the second half of 2022. Installation will follow , pending successful receipt of all permits and
authorizations. For more information, refer to Osisko Mining’s press release dated March 9, 2021 entitled
“Osisko Mining Orders Milling Equipment for Windfall”, filed on www.sedar.com.
Osisko holds a 2% to 3% NSR royalty on the Windfall project.
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Eagle Increased Production Plan
Victoria Gold Inc. (“Victoria Gold”) has announced the initiation of the “Project 250”, aimed at increasing
the average annual gold production of the Eagle mine to 250,000 ounces gold by 2023. The two primary
opportunities to increase production are the scalping of fine ore from the crushing cir cuit and adjusting
the seasonal stacking plan. Early engineering on Project 250 is expected to be completed in the second
half of 2021. For more information, refer to Victoria Gold’s press release dated April 6 2021 entitled
“Eagle Gold Mine First Quarter 2021 Operational Highlights”, filed on www.sedar.com.
Osisko holds a 5.0% NSR royalty on the Dublin Gulch property which includes all reported reserves and
resources of the Eagle gold mine as well as the Raven, Lynx, and Potato Hills exploration targets.
Conversion of Parral Offtake to a Stream
In April 2021, GoGold Resources Inc. (“GoGold”) and Osisko Bermuda Limited (“Osisko Bermuda”), a
subsidiary of Osisko, entered into an agreement to convert the current capped Parral gold and silver
offtake into a life -of-mine gold and silver stream. Under the stream, Osisko Bermuda will receive,
effective April 29, 2021, 2.4% of the gold and silver produced from tailings piles currently owned or
acquired by GoGold, with a transfer price of 30% of the gold and silver spot prices. Osisko currently has
no other offtake agreements on producing assets, therefore, this conversion will streamline financial
reporting for Osisko’s royalty and stream segment moving forward
Santana Construction Update
Minera Alamos Inc. (“Minera Alamos”) has indicated that initial gold production from the Santana project
is expected by mid-year. The major construction activities relate d to the gold recovery plant are now
complete and preparations are underway for testing. Final electrical and piping work will be finished in
parallel with other site activities leading up to the start of mining operations. The initial heap leach pad
area has also been completed and will continue to be expanded concurrently with the commencement
of mining activities. For more information, refer to Minera Alamos’s press release dated March 31, 2021
entitled “Minera Alamos Selects Mining Contractor in Preparation for Start of Mining Operations ”, filed
on www.sedar.com.
Osisko holds a 3.0% NSR royalty on the Santana project.
Bald Mountain Shift Mines to Royalty Areas
Kinross Gold Corporation (“Kinross”) expects higher production over the next three years from the North
area of the Bald Mountain mine, with a significant part of production shifting to mining the Winrock (1%
Gross Sales Royalty “GSR”), Duke (4% GSR) and Royale (4% GSR) deposits. Kinross also expects to
spend US$6.5 million at Bald Mountain in 2021 with an increased focus on drill testing targets identified
in 2020 to explore for both intrusive -related and sediment-hosted type deposits that can be potentially
converted to mineral resources in subsequent years. Near -mine targets in the North area of Bald
Mountain – such as Duke, Galaxy, Bida and Royale – are expected to be explored during 2021. For
more information, refer to Kinross’ press release dated February 10, 2021 entitled “ Kinross provides
update on development projects and full -year 2020 exploration results ” and the World Gold Council
presentation from April 17, 2021.
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Falco Updates Horne 5 Feasibility
Falco Resources Ltd. (“Falco”) updated its feasibility study to reflect the improved commodity prices and
updated costs on the Horne 5 gold project. The capital and operating costs were reviewed to reflect
current market conditions for labour, supplies and services. At a gold price of US$1,600 per ounce, the
updated feasibility study shows that the Horne 5 Project would generate an after-tax net present value,
at a 5% discount rate, of $761 million and an after -tax internal rate of return of 18 .9%. For more
information, refer to Falco’s press release dated March 24, 2021 entitled: “Updated Feasibility Study
Confirms Significant Value of the Horne 5 Project” and filed on www.sedar.com.
Osisko holds a silver stream on 90% of the future silver produced from the Horne 5 project, with an
option to increase the stream to 100%.
Acquisition of New Royalties on Spring Valley, Moonlight and Almaden
In April 2021, Osisko completed the acquisition of a portfolio of royalties from two private sellers for cash
consideration of US$26 million, including four royalties over the multi-million ounce Spring Valley project
located in Pershing County, Nevada. Osisko now holds a 3.0% NSR royalty on claims overlying the core
of the current Spring Valley deposit, a 2.0% NSR royalty on claims overlying the prospective high-grade
northeastern part of the Spring Valley deposit, and a 0.5% NSR royalty over the broader Spring Valley
property. In addition, Osisko acquired a 1.0% NSR royalty on the Moonlight exploration property
immediately to the north of Spring Valley, and a 0.5% NSR royalty and 30% gold and silver offtake over
the Almaden Project in western Idaho. For more information, refer to Osisko’s press release dated April
12th, 2021 entitled “Osisko Announces Preliminary Q1 2021 Deliveries and Agreement to Acquire
Spring Valley Royalties” filed on www.sedar.com.
New Liontown Royalty
In March 2021, Osisko acquired a 0.8% NSR royalty covering three tenements owned by Red River
Resources Limited (“Red River”) in Queensland, Australia for AUD $1.51 million.
The royalties were purchased from a third -party and cover the Liontown and Liontown East deposits,
which together host a JORC 2012 compliant indicated resource of 1.1Mt of 8.3% Zn Eq and inferred
resources of 3.1Mt of 10.2% Zn Eq (0.6% Cu, 1.9% Pb, 5.9% Zn, 1.1g/t Au and 29g/t Ag) . All lode
systems comprising the resources are open at depth and along strike. Liontown, a high grade, gold-rich
polymetallic deposit, is set to be Red River’s third deposit developed for mining on the broader Thalanga
property. The Liontown Project is located approximately 32km in a direct line from Red River’s Thalanga
operations and 107km by road.
In Q1 2021, Red River continued mine design and scheduling activities for the Liontown Project, with
the focus being on a combined open pit and underground development with a conceptual mine life of
10+ years. For more infor mation, refer to Red River’s press release dated April 29, 2021 entitled
“Quarterly Activities and Cash Flow Report for the period ending 31 March 2021”; and the press release
dated March 11, 2020 titled “Red River increases Liontown contained gold by 125%”.
The third royalty tenement is an exploration licence containing prospective land adjacent to the Thalanga
Project being explored by Red River . For more information, refer to Red River’s press release dated
March 11, 2021 entitled “RVR survey targets copper-rich mineralisation at Thalanga”.
New Vulcan Gold Belt Royalty
In March 2021, Osisko acquired a 0.5% NSR royalty on PJX Resources Inc.’s (“PJX Resources”) Gold
Shear, Eddy, Zinger and Dewdney Trail properties for $1 million. These properties represent the largest
consolidated land package in the Vulcan Gold Belt, a potential new gold camp located near Cranbrook,
British Columbia. The Vulcan Gold Belt occurs within the Sullivan base metal mining district. It is an
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area 60km l ong by 30km wide with gold in the creeks that has been mined as placer gold since the
1800’s. PJX Resources’ has identified 16 priority targets. For more information, refer to PJX Resources’
press release dated March 1, 2021 entitled “ Osisko Gold Royalties and PJX Resources Complete
Investment Agreement” filed on www.sedar.com.
New Hidden Valley Royalty
In February 2021, Osisko acquired a 1.5% NSR royalty as well as a 10% equity interest in relation to
the Hidden Valley project for US$4.2 million. Hidden Valley is owned privately and located in the
Solomon Islands. The royalty covers a prospecting license of approximately 98km2 that hosts a large
copper-gold porphyry target with exposed mineralized outcroppings and extensive soil anomalies.
New Rouyn Royalty
In April 2021, Osisko purchased a portfolio of NSR royalties varying from 1% to 2% from Falco
Resources for $0.7 million. Falco had acquired the portfolio from IAMGOLD Corporation pursuant to the
exercise of a right of first refusal it held over the royalties. The portfolio relates to, among others,
properties known as Flavrian and Central Camp and which are exploration properties surrounding Horne
5. The royalty portfolio covers an area of approximately 150km 2, and contains several gold and base
metal occurrences, including the historic Quesabe gold mine.
Gold Rock Exploration Results
In March 2021, Fiore Gold Ltd. (“Fiore Gold”) announced results from its resource expansion and
exploration drilling program at its Gold Rock project in Nevada. The holes to the north of the North Pit
shell include some of the highest-grade intercepts seen to date at Gold Rock, including 45.7m of 2.01
g/t gold in hole GR20-110. Fiore Gold plans to complete additional drilling in this area. For more
information, refer to Fiore Gold’s press release dated March 30 , 2021 entitled “Fiore Gold Drills
45.7 metres of 2.01g/t Gold and 42.7 metres of 1.17g/t Gold, Continues to Expand Mineralization at its
Gold Rock Project, Nevada” filed on www.sedar.com.
Osisko has a 4% NSR royalty over the northern part of the proposed pit at Gold Rock and a large area
to the north that has significant exploration potential.
Altar Resource Update
Osisko owns a 1% NSR royalty on the Altar project in western Argentina. Aldebaran Resources Inc.
(“Aldebaran”) has a joint venture with Sibanye-Stillwater on the Altar property allowing them to earn up
to an 80% interest by spending US$55 million. Aldebaran updated the geological model and published
a new resource estimation utilizing a higher cut -off grade (0.30% CuEq) resulting in measured &
indicated resource of 1,198 million tonnes grading 0.43% copper, 0.1 g/t gold and 1 g/t silver, inferred
resource of 189 million tonnes grading 0.42% copper, 0.06 g/t gold and 0.8 g/t silver. It also resulted in
a significant reduction in the arsenic grade, primarily through isolation of the arsenic enriched geological
domains. Aldebaran is currently executing a drill program at Altar, targeting deeper extensions of known
higher-grade mineralization. For more information, refer to Aldebaran’s press release dated March 22,
2021 entitled “Aldebaran Announces Updated Mineral Resource Estimate for the Altar Copper -Gold
Project” filed on www.sedar.com.