OSISKO REPORTS STRONG THIRD QUARTER 2021 RESULTS Record operating cash flows from the royalties and streams segment of $44.1 million Strong cash margin of $46.5 million
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OSISKO REPORTS STRONG THIRD QUARTER 2021 RESULTS
Record operating cash flows from the royalties and streams segment of $44.1 million
Strong cash margin of $46.5 million
Montréal, November 9, 2021 – Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX &
NYSE) today announce d its consolidated financial results for the third quarter of 2021. Am ounts
presented are in Canadian dollars, except where otherwise noted.
Financial Highlights
• Earned 20,032 GEOs1 (Q3 2020 –16,739 GEOs)
• Record revenues from royalties and streams of $50.0 million (Q3 2020 – $41.2 million)
• Cash margin4 of 93% from royalty and stream interests (Q3 2020 – 96%); 97% excluding
the Renard diamond stream
• Consolidated cash flows from operating activities of $41.1 million (Q3 2020 – $36.1 million)
o Record operating cash flows from the royalt ies and stream s segment2 of
$44.1 million (Q3 2020 – $37.3 million)
o Operating cash flows from the mining exploration and development segment3 (i.e. Osisko
Development Corp. – TSX-V:ODV) of ($3.0) million (Q3 2020 – ($1.2) million)
• Net earnings attributable to Osisko’s shareholders of $1.8 million, or $0.01 per basic share
(Q3 2020 –$12.5 million, or $0.08 per basic share ), as a result of impairment charges of
$33.3 million recorded by Osisko Development Corp. (“Osisko Development”) on its mining
assets
• Adjusted earnings5 of $17.9 million, or $0.11 per basic share3 (Q3 2020 – $17.5 million, or $0.11
per basic share)
o Adjusted earnings5 from the royalt ies and streams segment2 of $23.3 million, or
$0.14 per basic share5 (Q3 2020 – $18.4 million or $0.11 per basic share)
o Adjusted loss5 from the mining exploration and development segment3 of $5.4 million, or
$0.03 per basic share5 (Q3 2020 – $0.9 million or $0.01 per basic share)
• Repurchased 1.7 million common shares for $26.0 million under the normal course issuer bid
• Quarterly dividend of $0.055 per share declared (annualized dividend of $0.22 per share) ,
payable on January 14 , 2022 to shareholders of record as of the close of business on
December 31, 2021
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Sandeep Singh, President and CEO of Osisko commented on the activities of the third quarter of 2021:
“In the third quarter, our royalty and streaming business continued to generate record revenues and
operating cash flows led by our core assets. Ramp up at the Eagle gold mine progressed successfully,
hitting records for total material mined, ore stacked and gold produced. At Mantos Blancos, we forecast
an imminent increase in deliveries as the debottlenecking project concludes. Exploration and
development activities at the Malartic underground project are exceeding our expectations. The recent
proposed merger between Agnico Eagle and Kirkland Lake also unlocks interesting synergy potential
for our 2% NSR royalties in the region (including Upper Beaver and A malgamated Kirkland). Overall,
Osisko continues to benefit from meaningful positive catalysts across our portfolio of assets.”
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 per 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 September 30, 2021.
(i) Osisko Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries. Represents the royalty, stream and 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 September 30, 2021 and December 30, 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 Overview of Financial Results section of this MD&A for a reconciliation of the cash ma rgin per interest.
(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 non-IFRS measures provided under the Non-IFRS Financial Performance Measures section of this MD&A.
(vii) Consolidated results are net of the intersegment transactions and adjustments related to the accounting policies. Refer to th e Segment Disclosure section
of this MD&A.
For the three months ended September 30,
Osisko Gold Royalties (i) Osisko Development (ii) Consolidated (vii)
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
Cash (Sept. 30, 2021 and Dec. 31, 2020) (iii) 79,794 105,097 72,151 197,427 151,945 302,524
Three months ended September 30,
Revenues 50,035 55,707 3,906 - 50,035 55,707
Cash margin (iv) 46,528 40,471 - - 46,528 40,471
Gross profit 33,795 30,086 - - 33,795 30,086
Operating expenses
(G&A, bus. dev and exploration) (5,428) (6,716) (7,200) (1,183) (12,628) (7,899)
Net earnings (loss) 25,593 12,759 (31,745) (245) (6,152) 12,514
Net earnings (loss) attributable to Osisko’s
shareholders 25,593 12,759 (23,798) (245) 1,795 12,514
Net earnings (loss) attributable to Osisko’s
shareholders per share (v)
0.15
0.08
(0.14)
(0.00)
0.01
0.08
Adjusted net earnings (loss) (vi) 23,281 18,415 (5,372) (886) 17,909 17,529
Adjusted net earnings (loss) per basic share (vi) 0.14 0.11 (0.03) (0.01) 0.11 0.11
Cash flows from operating activities (vii)
Before working capital items 39,849 32,403 (5,962) (706) 33,887 31,697
Working capital items 4,231 4,923 2,965 (497) 7,196 4,426
After working capital items 44,080 37,326 (2,997) (1,203) 41,083 36,123
Cash flows from investing activities (vii) (40,837) (62,990) (69,154) (11,176) (109,991) (74,166)
Cash flows from financing activities (35,288) (299) (1,588) (408) (36,876) (707)
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Other Highlights
• Acquired a 2.75% NSR royalty on the Tocantinzinho gold project (“Tocantinzinho”) for cash
consideration of US$10 million ($12.6 million). The operator of Tocantinzinho has a one- time
buy-down option in relation to the royalty. At the time of project constr uction, the operator may
make a payment of US$5.5 million to reduce the royalty percentage by 2% resulting in a royalty
of 0.75%. Pursuant to a pre-existing agreement, the buy-down payment is payable to the original
royalty owners.
• Increased the amount available under the revolving credit facility 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). The maturity date of the facility was extended to July 30,
2025, which can be extended annually.
• Declared a quarterly dividend of $0.055 per common share payable on October 15, 2021 to
shareholders of record as of the close of business on September 30, 2021, a dividend increase
of 10%.
• Concluded, on October 27, 2021, a transaction with Barrick TZ Limited, a subsidiary of Barrick
Gold Corporation (“Barrick”), to acquire royalties for total cash consideration of US$11.8 million,
including a 2% NSR royalty on the AfriOre and Gold Rim licenses comprising the West K enya
project operated by Shanta Gold Limited, a 1% NSR royalty on the Frontier project operated by
Metalor SA, a private company, and a 1% NSR royalty on the Central Houndé project operated
by Thor Explorations Ltd.
Osisko Development Update
Cariboo Gold Project
Osisko Development has drilled approximately 150,000 metres, of its planned 200,000 metre 2021
program, to expand and delineate the known and new vein corridors and deposits of the Cariboo gold
project. Management of Osisko Development believ es that it has completed sufficient drilling for a
mineral resource update to be used towards a feasibility study in the first half of 2022. Exploration during
the quarter was focused on the expansion of the Lowhee Zone and further delineation of the Valley ,
Mosquito and Shaft deposits. The Cow Mountain Underground Bulk Sample Permit was received in July
2021 and bulk sample activities are anticipated in 2022 now that the underground portal is complete.
Bonanza Ledge Phase II Project
Osisko Development started mining operations at its Bonanza Ledge Phase II project in the first quarter
of 2021. The project is a small scale and short life operation, which allows Osisko Development to
facilitate (i) opportunities for managing historical reclam ation obligations inherited by the company, (ii)
hands on training and commissioning of the company’s mining and processing complex for the Cariboo
gold project and (iii) maintain the economic and social benefits for the First Nations partners and
communities.
In the third quarter of 2021, Osisko Development incurred an impairment charge of $22.4 million on the
Bonanza Ledge Phase II project, triggered by continuing operational challenges leading to lower
production and revenues than originally planned.
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San Antonio Gold Project
Approximately 11,800 metres of infill drilling was completed during the third quarter at the San Antonio
gold project in Sonora, Mexico, and 22,724 meters year -to-date. First drill results from the project are
pending. Osisko Development is planning to commence processing, via heap leach, of the 1.1 million
tonne stockpile in November . Permitting for production, via heap leach, of the Sapuchi oxide
mineralization is also on schedule and granting of the permit is anticipated in the first half of 2022.
The stockpile inventory was revalued at its net recoverable amount during the third quarter following a
decrease in the gold price and an increase in the expected processing and transportation costs, resulting
in an impairment charge of $11.0 million.
For additional information on the Osisko Development activities, please refer to the press releases and
other documents filed on Sedar ( www.sedar.com) under Osisko Development’s profile and on its
website (www.osiskodev.com).
Q3 2021 Results and Conference Call Details
Conference Call: Wednesday, November 10, 2021 at 10:00 am EST
Dial-in Numbers: North American Toll-Free: 1 (888) 550-4423
Local and International: 1 (438) 801-4067
Replay (available until December 10,
2021 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”).
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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
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 has been 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 equivalent 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
September 30,
Nine months ended
September 30,
2021 2020 2021 2020
Gold(1) $1,790 $1,909 $1,800 $1,735
Silver(2) $24 $24 $26 $19
Exchange rate (US$/Can$)(3) 1.2600 1.3321 1.2514 1.3541
(1) The London Bullion Market Association’s pm price in U.S. dollars.
(2) The London Bullion Market Association’s price in U.S. dollars.
(3) 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 development segment, which
corresponds to the activities of Osisko Development Corp. and its subsidiaries.
(4) Cash 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 Canadian dollars):
Three months ended
September 30,
Nine months ended
September 30,
2021 2020 2021 2020
$ $ $ $
Revenues 50,035 55,707 174,204 149,070
Less: Revenues from offtake interests - (14,464) (25,265) (41,260)
Revenues from royalty and stream interests 50,035 41,243 148,939 107,810
Cost of sales (3,507) (15,236) (34,000) (45,464)
Less: Cost of sales of offtake interests - 13,738 24,343 39,114
Cost of sales of royalty and stream interests (3,507) (1,498) (9,657) (6,350)
Revenues from royalty and stream interests 50,035 41,243 148,939 107,810
Less: Cost of sales of royalty and stream interests (3,507) (1,498) (9,657) (6,350)
Cash margin from royalty and stream interests 46,528 39,745 139,282 101,460
93% 96% 94% 94%
Revenues from offtake interests - 14,464 25,265 41,260
Less: Cost of sales of offtake interests - (13,738) (24,343) (39,114)
Cash margin from offtake interests - 726 922 2,146
- 5% 4% 5%
Excluding the Renard diamond stream
Revenues from royalty and stream interests 50,035 41,243 148,939 107,810
Less: Revenues from the Renard diamond stream (5,529) - (13,891) (4,408)
Revenues from royalty and stream interests, net 44,506 41,243 135,048 103,402
Cost of sales of royalty and stream interests (3,507) (1,498) (9,657) (6,350)
Less: Cost of sales of the Renard diamond stream 2,090 - 5,642 1,906
Cost of sales of royalty and stream interests, net (1,417) (1,498) (4,015) (4,444)
Cash margin from royalty and stream interests,
excluding the Renard diamond stream 43,089 39,745
131,033 98,958
97% 96% 97% 96%
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(5) 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 (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 exploration and
evaluation assets”, “Unrealized gain (loss) on investments”, “Share of loss of associates”, “Deferred premium income on flow-through
shares”, “Deferred income tax expense (recovery)” and other unusual items such as transaction costs.
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.
(i) Osisko Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries . Represents the royalt y, stream and
other interests segment.
(ii) Osisko Development Corp. and its subsidiaries. Represents the mining exploration, evaluation and development segment.
(i) Osisko Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries . Represents the royalty, stream and
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 mining exploration, evaluation and development
segment.
For the three months ended September 30,
2021 2020
Osisko Gold
Royalties (i)
Osisko
Development (ii) Consolidated
Osisko Gold
Royalties (i)
Osisko
Development (ii) Consolidated
(in thousands of dollars, except
per share amounts)
$ $ $ $ $ $
Net earnings (loss) 25,593 (31,745) (6,152) 12,759 (245) 12,514
Adjustments:
Impairment of assets - 33,320 33,320 1,281 - 1,281
Foreign exchange (gain) loss 322 (993) (671) 391 - 391
Unrealized loss (gain) on investments (11,202) 456 (10,746) (459) (849) (1,308)
Share of loss of associates 627 145 772 551 209 760
Deferred premium income on flow-through
shares - (2,602) (2,602) - - -
Deferred income tax expense (recovery) 7,941 (3,953) 3,988 3,616 (1) 3,615
Transaction costs (RTO transaction) - - - 276 - 276
Adjusted earnings (loss) 23,281 (5,372) 17,909 18,415 (886) 17,529
Weighted average number of
common shares outstanding (000’s) 167,924 167,924 167,924 166,110 166,110 166,110
Adjusted earnings (loss) per basic share 0.14 (0.03) 0.11 0.11 (0.01) 0.11
For the nine months ended September 30,
2021 2020
Osisko Gold
Royalties (i)
Osisko
Development (ii) Consolidated
Osisko Gold
Royalties (i)
Osisko
Development (ii) Consolidated
(in thousands of dollars, except
per share amounts)
$ $ $ $ $ $
Net earnings (loss) 55,397 (76,849) (21,452) 12,545 (301) 12,244
Adjustments:
Impairment assets 4,400 73,799 78,199 31,604 - 31,604
Foreign exchange (gain) loss 182 542 724 (1,166) - (1,166)
Unrealized loss (gain) on investments (8,260) (841) (9,101) (11,041) (4,499) (15,540)
Share of loss of associates 1,363 1,302 2,665 2,336 1,598 3,934
Deferred premium income on flow-through
shares - (5,869) (5,869) - - -
Deferred income tax expense (recovery) 17,515 (6,694) 10,821 1,158 432 1,590
Transaction costs (RTO transaction) - - - 276 - 276
Adjusted earnings (loss) 70,597 (14,610) 55,987 35,712 (2,770) 32,942
Weighted average number of
common shares outstanding (000’s) 167,786 167,786 167,786 162,321 162,321 162,321
Adjusted earnings (loss) per basic share 0.42 (0.09) 0.33 0.22 (0.02) 0.20
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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"), especially as they relate to production guidance for 2021, 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 not always, identified
by the words "expects", "is expected" "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential",
"scheduled" and similar expressions or variations (including negati ve 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, including exploration results from other properties over
which Osisko holds an interest, Osisko’s ability to seize future opportunities including as a result of its increased financial
flexibility and the ability of Osisko Development to achieve the object ive of its 2021 exploration and delineation program to
successfully expand and delineate the known and new vein corridors and deposit at the Cariboo gold project, and the successful
performance of regional greenfield exploration work along the Burns, Yanks and Shaft deposits, the timely development of the
Cariboo gold project and timely completion of the related feasibility study, the achievement of the goals pursued by Osisko
Development in mining the Bonanza Ledge Phase 2 deposit. 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 limitation: 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 capital 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 or 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 accuracy 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 from 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 are cautioned that forward-
looking statem ents 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 after
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.