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Osisko Reports Q2 2022 Results

·20 min read
Osisko Gold Royalties Ltd.
Osisko Gold Royalties Ltd.

Record cash margin of $47.8 million from royalties and streams
Operating cash flows from the royalties and streams segment of $35.0 million

MONTRÉAL, Aug. 09, 2022 (GLOBE NEWSWIRE) -- Osisko Gold Royalties Ltd (the “Corporation” or “Osisko”) (OR: TSX & NYSE) today announced its consolidated financial results for the second quarter of 2022. Amounts presented are in Canadian dollars, except where otherwise noted.

Q2 2022 Financial Highlights

  • 22,243 GEOs1 earned (Q2 2021 – 20,178 GEOs);

  • Consolidated revenues of $64.0 million (Q2 2021 – $57.9 million);

    • Revenues from the royalties and streams segment2 of $51.5 million (Q2 2021 – $57.2 million, including $7.3 million from offtakes);

    • Revenues from the mining exploration and development segment3 (i.e. Osisko Development Corp.) of $12.4 million (Q2 2021 – $0.7 million);

  • Consolidated cash flows from operating activities of ($0.2 million) (Q2 2021 – $30.9 million);

    • Operating cash flows from the royalties and streams segment of $35.0 million (Q2 2021 – $37.3 million);

    • Operating cash flows from the mining exploration and development segment of ($35.2) million (Q2 2021 – ($6.4) million);

  • Cash margin4 of 93% from royalties and streams (Q2 2021 – 94%);

  • Consolidated net earnings attributable to Osisko’s shareholders of $17.2 million, or $0.09 per share (Q2 2021 – net loss of $14.8 million or $0.09 per basic share);

  • Consolidated adjusted loss4 of $4.7 million, or $0.03 per basic share (Q2 2021 – net earnings $20.2 million, $0.12 per basic share);

    • Adjusted earnings from the royalty and stream segment of $25.7 million, or $0.14 per basic share (Q2 2021 – $23.9 million, or $0.14 per basic share); and

    • Adjusted loss from the mining exploration and development segment of $30.4 million, or $0.16 per basic share (Q2 2021 – $3.7 million, or $0.02 per basic share).

Sandeep Singh, President and CEO of Osisko commented: “We benefited from record GEO deliveries and cash margins in Q2 despite two core assets not being at their full run rates, and we expect deliveries to continue to climb steadily in the second half of the year. The markets have become increasingly volatile, but we believe the investment thesis for Osisko has never been stronger with growing cash flows, meaningful diversification, exposure to tier-1 jurisdictions, and countless catalysts in the portfolio. And as evident with our Q2 results, our royalty and streaming business affords protection from a highly inflationary mining environment.”

Financial Highlights by Operating Segment
(in thousands of dollars, except per share amounts)

As a result of the interest held (44.1% as of June 30, 2022) and based on other facts and circumstances, the Corporation consolidates the assets, liabilities, results of operations and cash flows of the activities of Osisko Development Corp. (“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 and six months ended June 30, 2022.

 

For the three and six months ended June 30,

 

Osisko Gold Royalties (i)

Osisko Development (ii)

Consolidated (v)

 

2022

 

2021

 

2022

 

2021

 

2022

 

2021

 

 

$

$

$

$

$

$

 

 

 

 

 

 

 

Cash (June 30, 2022 and Dec. 31, 2021)

312,981

 

82,291

 

136,302

 

33,407

 

449,283

 

115,698

 

 

 

 

 

 

 

 

Three months ended June 30,

 

 

 

 

 

 

Revenues

51,545

 

57,246

 

12,862

 

775

 

63,959

 

57,941

 

Cash margin (iii)

47,789

 

47,150

 

n/a

 

n/a

 

47,789

 

47,150

 

Gross profit

35,938

 

35,713

 

653

 

-

 

36,591

 

35,713

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

(G&A, bus. dev and exploration)

(6,200

)

(6,483

)

(10,079

)

(4,649

)

(16,279

)

(11,132

)

Mining operating expenses

-

 

-

 

(20,602

)

-

 

(20,602

)

-

 

Net earnings (loss)

18,059

 

16,341

 

(1,487

)

(41,404

)

16,572

 

(25,063

)

Net earnings (loss) attributable to Osisko’s shareholders

18,059

 

16,341

 

(899

)

(31,100

)

17,160

 

(14,759

)

Net earnings (loss) per share attributable to Osisko’s shareholders

0.10

 

0.10

 

(0.01

)

(0.19

)

0.09

 

(0.09

)

Adjusted net earnings (loss) (iv)

25,716

 

23,877

 

(30,375

)

(3,727

)

(4,659

)

20,150

 

Adjusted net earnings (loss) per basic share (iv)

0.14

 

0.14

 

(0.16

)

(0.02

)

(0.03

)

0.12

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Before working capital items

40,870

 

39,026

 

(24,913

)

(3,708

)

15,957

 

35,318

 

Working capital items

(5,905

)

(1,685

)

(10,276

)

(2,716

)

(16,181

)

(4,401

)

After working capital items

34,965

 

37,341

 

(35,189

)

(6,424

)

(224

)

30,917

 

Cash flows from investing activities

2,573

 

(42,377

)

(97,759

)

(47,464

)

(95,186

)

(89,841

)

Cash flows from financing activities

(125,705

)

(3,542

)

210,225

 

(1,718

)

84,520

 

(5,260

)

 

 

 

 

 

 

 

Six months ended June 30,

 

 

 

 

 

 

Revenues

102,234

 

124,169

 

22,029

 

775

 

123,357

 

124,864

 

Cash margin (iii)

95,297

 

93,676

 

n/a

 

n/a

 

95,297

 

93,676

 

Gross profit

72,148

 

70,312

 

653

 

-

 

72,801

 

70,312

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

(G&A, bus. dev and exploration)

(12,457

)

(12,511

)

(18,007

)

(9,851

)

(30,464

)

(22,362

)

Mining operating expenses

-

 

 

(35,848

)

 

-

 

 

Net earnings (loss)

34,863

 

29,805

 

(23,820

)

(45,105

)

11,043

 

(15,300

)

Net earnings (loss) attributable to Osisko’s shareholders

34,863

 

29,805

 

(17,377

)

(33,970

)

17,486

 

(4,165

)

Net earnings (loss) per share attributable to Osisko’s shareholders

0.20

 

0.18

 

(0.10

)

(0.20

)

0.10

 

(0.02

)

Adjusted net earnings (loss) (iv)

50,559

 

47,316

 

(50,982

)

(9,238

)

(423

)

38,078

 

Adjusted net earnings (loss) per basic share (iv)

0.29

 

0.28

 

(0.29

)

(0.06

)

(0.00

)

0.23

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Before working capital items

80,762

 

78,565

 

(42,182

)

(1,285

)

38,580

 

71,570

 

Working capital items

(5,290

)

(4,487

)

(9,904

)

(14,842

)

(15,194

)

(19,329

)

After working capital items

75,472

 

74,078

 

(52,086

)

(16,127

)

23,386

 

52,241

 

Cash flows from investing activities

(13,013

)

(56,158

)

(94,445

)

(69,172

)

(107,458

)

(119,620

)

Cash flows from financing activities

159,823

 

(11,053

)

247,362

 

33,895

 

407,185

 

22,842

 


(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. Represents the exploration, evaluation and development of mining projects segment.

(iii)

Cash margin is a non-IFRS financial performance measure for the royalties and streams segment which has no standard definition under IFRS. It is calculated by deducting the cost of sales (excluding depletion) from the revenues. Please refer to the Non-IFRS Financial Performance Measures section of the MD&A for the three and six months ended June 30, 2022 or the Notes section at the end of this press release.

(iv)

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 the Corporation’s MD&A for the three and six months ended June 30, 2022 or the Notes section at the end of this press release.

(v)

Consolidated results are net of the intersegment transactions. Refer to the Segment Disclosure section of the Corporation’s MD&A for the three and six months ended June 30, 2022.

Other Highlights

  • Publication of the inaugural Asset Handbook and the second edition of the environmental, social and governance (“ESG”) report, Growing Responsibly;

  • Repayment in full of the outstanding revolving credit facility for $113.1 million;

  • Osisko Development completed the acquisition of Tintic Consolidated Metals LLC (“TCM”) and related financings, which resulted in the Corporation’s equity ownership in Osisko Development reducing from 70.1% to 44.1%;

  • Osisko Bermuda Limited (“OBL”) entered into a binding agreement with TCM with respect to the previously announced metals stream (the “Tintic Stream”) on the Trixie test mine (the “Trixie Mine”), as well as mineral claims covering more than 17,000 acres in Central Utah’s historic Tintic Mining District (the “Tintic Property”), for US$20.0 million in exchange for 2.5% of all metals produced and a transfer price of 25% of the spot prices;

  • Quarterly dividend of $0.055 per common share paid on July 15, 2022 to shareholders of record as of the close of business on June 30, 2022;

  • In July 2022, the Corporation purchased for cancellation a total of 659,520 common shares for $8.3 million (average acquisition price per share of $12.65) under its 2022 NCIB program; and

  • Declaration of a quarterly dividend of $0.055 per common share payable on October 14, 2022 to shareholders of record as of the close of business on September 30, 2022.

Q2 2022 Results Conference Call Details

Conference Call:

Wednesday, August 10th, 2022 at 10:00 am ET

Dial-in Numbers:

North American Toll-Free: 1 (888) 396 8049
Local and International: 1 (416) 764 8646
Conference ID: 28077702

Replay (available until August 17th at 11:59 pm ET):

North American Toll-Free: 1 (877) 674 7070
Local and International: 1 (416) 764 8692
Playback passcode: 077702#

 

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 165 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
htaylor@osiskogr.com


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
June 30,

 

Six months ended
June 30,

 

 

2022

 

2021

 

 

2022

 

2021

 

 

 

 

 

 

Gold(i)

$

1,871

$

1,816

 

$

1,874

$

1,805

Silver(ii)

$

23

$

27

 

$

23

$

26

 

 

 

 

 

 

Exchange rate (US$/Can$)(iii)

 

1.2768

 

1.2282

 

 

1.2715

 

1.2471


 

(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 development 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) for the royalties and streams segment, (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.


Cash Margin (in dollars and in percentage of revenues)

Cash margin (in dollars) represents revenues from the royalties and streams segment less cost of sales (excluding depletion). Cash margin (in percentage of revenues) represents the cash margin (in dollars) divided by revenues from the royalties and streams segment.

 

 

Three months ended
June 30,

 

Six months ended
June,

 

 

 

2022

 

2021

 

2022

 

2021

 

 

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

Royalty and stream interests

 

 

 

 

 

Total Revenues

63,959

 

57,941

 

123,357

 

124,864

 

 

Less: Revenues from mining activities (Osisko Development)

(12,414

)

(695

)

(21,123

)

(695

)

 

Less: Revenues from offtake interests

-

 

(7,339

)

-

 

(25,265

)

 

Revenues from royalty and stream interests

51,545

 

49,907

 

102,234

 

98,904

 

 

 

 

 

 

 

 

Total Cost of sales

(15,318

)

(10,791

)

(26,480

)

(31,188

)

 

Less: Cost of sales from mining activities (Osisko Development)

11,562

 

695

 

19,543

 

695

 

 

Less: Cost of sales from offtake interests

-

 

7,104

 

-

 

24,343

 

 

Cost of sales of royalty and stream interests

(3,756

)

(2,992

)

(6,937

)

(6,150

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from royalty and stream interests

51,545

 

49,907

 

102,234

 

98,904

 

 

Less: Cost of sales of royalty and stream interests

(3,756

)

(2,992

)

(6,937

)

(6,150

)

 

Cash margin (in dollars) - royalty and stream interests

47,789

 

46,915

 

95,297

 

92,754

 

 

 

 

 

 

 

 

Cash margin (in percentage of revenues) - royalty and stream interests

93

%

94

%

93

%

94

%

 

 

 

 

 

 

 

Offtake interests

 

 

 

 

 

Revenues from offtake interests

-

 

7,339

 

-

 

25,265

 

 

Less: Cost of sales of offtake interests

-

 

(7,104

)

-

 

(24,343

)

 

Cash margin (in dollars)

-

 

235

 

-

 

922

 

 

 

 

 

 

 

 

Cash margin (in percentage of revenues)

-

 

3

%

-

 

4

%


Adjusted earnings (loss) and adjusted earnings (loss) per basic share

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), transaction costs and other items such as non-cash gains (losses).

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.

 

For the three months ended June 30,

 

2022

2021

 

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)

18,059

 

(1,487

)

16,572

 

16,341

 

(41,404

)

(25,063

)

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

Impairment of assets

384

 

-

 

384

 

-

 

40,479

 

40,479

 

Foreign exchange (gain) loss

(7,593

)

(1,563

)

(9,156

)

(169

)

791

 

622

 

Unrealized loss (gain) on investments

5,574

 

(11,697

)

(6,123

)

1,553

 

13

 

1,566

 

Variation of fair value of derivative instruments

-

 

(19,381

)

(19,381

)

-

 

-

 

-

 

Share of loss of associates

1,078

 

141

 

1,219

 

1,111

 

750

 

1,861

 

Deferred premium income on flow-through shares

-

 

(573

)

(573

)

-

 

(2,798

)

(2,798

)

Transaction cost – Tintic

-

 

2,664

 

2,664

 

 

 

 

Deferred income tax expense (recovery)

8,214

 

1,521

 

9,735

 

5,041

 

(1,558

)

3,483

 

 

 

 

 

 

 

 

Adjusted earnings (loss)

25,716

 

(30,375

)

(4,659

)

23,877

 

(3,727

)

20,150

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (000’s)

185,316

 

185,316

 

185,316

 

167,895

 

167,895

 

167,895

 

 

 

 

 

 

 

 

Adjusted earnings (loss) per basic share

0.14

 

(0.16

)

(0.03

)

0.14

 

(0.02

)

0.12

 


 

For the six months ended June 30,

 

2022

 

2021

 

 

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)

34,863

 

(23,820

)

11,043

 

29,805

 

(45,105

)

(15,300

)

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

Impairment of assets

904

 

-

 

904

 

4,400

 

40,479

 

44,879

 

Foreign exchange loss (gain)

(8,469

)

(2,087

)

(10,556

)

(140

)

1,535

 

1,395

 

Unrealized (gain) loss on investments

11,414

 

(11,469

)

(55

)

2,942

 

(1,297

)

1,645

 

Variation of fair value of derivative instruments

-

 

(19,381

)

(19,381

)

-

 

-

 

-

 

Share of (earnings) loss of associates

(1,526

)

472

 

(1,054

)

736

 

1,157

 

1,893

 

Deferred premium income on flow-through shares

-

 

(914

)

(914

)

-

 

(3,267

)

(3,267

)

Transaction cost – Tintic

-

 

4,727

 

4,727

 

 

 

 

Deferred income tax expense (recovery)

13,373

 

1,490

 

14,863

 

9,573

 

(2,740

)

6,833

 

 

 

 

 

 

 

 

Adjusted earnings (loss)

50,559

 

(50,982

)

(423

)

47,316

 

(9,238

)

38,078

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (000’s)

176,182

 

176,182

 

176,182

 

167,696

 

167,696

 

167,696

 

 

 

 

 

 

 

 

Adjusted earnings (loss) per basic share

0.29

 

(0.29

)

0.00

 

0.28

 

(0.06

)

0.23

 

(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. Represents the mining exploration, evaluation and development segment.

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 expectations 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, business 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 and 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 negative 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 results may accordingly differ materially from those in forward-looking statements. Such risk factors include, without limitation: fluctuations in the prices of the commodities that drive royalties, streams, offtakes and investments held by Osisko; fluctuations in the value of the Canadian dollar relative to the U.S. dollar; 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; risks related to the operators of the properties in which Osisko holds a royalty, stream or other interests; timely development, permitting, construction, commencement of production, ramp-up (including operating and technical challenges) on any of the properties in which Osisko holds a royalty, stream or other interest; rate and timing of production differences from resource estimates or production forecasts by operators of properties in which Osisko holds a royalty, stream or other interest; the unfavorable outcome of any challenges or litigation relating title, permit or license with respect to any of the properties in which Osisko holds a royalty, stream or other interests or to Osisko’s right thereon; differences in rate and timing of production from resource estimates or production forecasts by operators of properties in which Osisko holds a royalty, stream or other interest, including conversion from resources to reserves and ability to replace resources; business opportunities that become available to, or are pursued by Osisko; continued availability of capital and financing and general economic, market or business conditions; risks and hazards associated with the business of exploring, development and mining on any of the properties in which Osisko holds a royalty, stream or other interest, 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, the integration of acquired assets and the responses of relevant governments to the COVID-19 outbreak and the effectiveness of such response and the potential impact of COVID-19 on Osisko’s business, operations and financial condition. 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 and with public disclosure (including forecast of production); 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); no adverse development in respect of any significant property in which Osisko holds a royalty, stream or other interest; that statements and estimates relating to mineral reserves and resources by owners and operators of the properties in which Osisko holds a royalty, stream or other interest are accurate; the Corporation’s ongoing income and assets relating to determination of its PFIC status; integration of acquired assets; and the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated or intended.

For additional information on risks, uncertainties and assumptions, please refer to the most recent Annual Information Form of Osisko filed on SEDAR at www.sedar.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 uncertainties 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 prospective 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
(tabular amounts expressed in thousands of Canadian dollars)

 

June 30,

 

 

December 31,

 

 

2022

 

 

2021

 

 

$

 

 

$

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash

449,283

 

 

115,698

 

Amounts receivable

27,736

 

 

14,691

 

Inventories

26,361

 

 

18,596

 

Other assets

6,698

 

 

3,941

 

 

510,078

 

 

152,926

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Investments in associates

126,523

 

 

125,354

 

Other investments

113,302

 

 

169,010

 

Royalty, stream and other interests

1,148,482

 

 

1,154,801

 

Mining interests and plant and equipment

836,706

 

 

635,655

 

Exploration and evaluation

42,758

 

 

3,635

 

Goodwill

111,204

 

 

111,204

 

Other assets

34,381

 

 

18,037

 

 

2,923,434

 

 

2,370,622

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

33,341

 

 

30,049

 

Dividends payable

10,177

 

 

9,157

 

Provisions and other liabilities

12,663

 

 

12,179

 

Current portion of long-term debt

300,600

 

 

294,891

 

 

356,781

 

 

346,276

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Provisions and other liabilities

89,855

 

 

60,334

 

Long-term debt

4,636

 

 

115,544

 

Deferred income taxes

96,417

 

 

68,407

 

 

547,689

 

 

590,561

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

2,085,642

 

 

1,783,689

 

Warrants

-

 

 

18,072

 

Contributed surplus

59,383

 

 

42,525

 

Equity component of convertible debentures

14,510

 

 

14,510

 

Accumulated other comprehensive income

28,010

 

 

58,851

 

Deficit

(305,499

)

 

(283,042

)

Equity attributable to Osisko Gold Royalties Ltd’s shareholders

1,882,046

 

 

1,634,605

 

Non-controlling interests

493,699

 

 

145,456

 

Total equity

2,375,745

 

 

1,780,061

 

 

2,923,434

 

 

2,370,622

 



Osisko Gold Royalties Ltd
Consolidated Statements of Income (Loss)
For the three and six months June 30, 2022 and 2021
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

 

Three months ended
June 30,

 

 

Six months ended
June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

Revenues

63,959

 

 

57,941

 

 

123,357

 

 

124,864

 

 

 

 

 

 

 

 

 

Cost of sales

(15,318

)

 

(10,791

)

 

(26,480

)

 

(31,188

)

Depletion and amortization

(12,050

)

 

(11,437

)

 

(24,076

)

 

(23,364

)

Gross profit

36,591

 

 

35,713

 

 

72,801

 

 

70,312

 

 

 

 

 

 

 

 

 

Other operating expenses

 

 

 

 

 

 

 

General and administrative

(14,875

)

 

(9,171

)

 

(27,519

)

 

(19,077

)

Business development

(1,260

)

 

(1,118

)

 

(2,681

)

 

(2,105

)

Exploration and evaluation

(144

)

 

(843

)

 

(264

)

 

(1,180

)

Mining operating expenses

(20,602

)

 

-

 

 

(35,848

)

 

-

 

Impairments - royalty, stream and other interests

-

 

 

-

 

 

-

 

 

(2,288

)

Impairments - mining exploration, evaluation and development

-

 

 

(40,479

)

 

-

 

 

(40,479

)

Operating (loss) income

(290

)

 

(15,898

)

 

6,489

 

 

5,183

 

Interest income

2,292

 

 

1,348

 

 

3,483

 

 

2,658

 

Finance costs

(7,310

)

 

(5,884

)

 

(13,683

)

 

(12,027

)

Foreign exchange gain (loss)

9,405

 

 

(406

)

 

10,592

 

 

(1,535

)

Share of (loss) income of associates

(1,219

)

 

(1,861

)

 

1,054

 

 

(1,893

)

Other gains (losses), net

23,884

 

 

1,629

 

 

18,660

 

 

(281

)

Earnings (loss) before income taxes

26,762

 

 

(21,072

)

 

26,595

 

 

(7,895

)

Income tax expense

(10,190

)

 

(3,991

)

 

(15,552

)

 

(7,405

)

Net earnings (loss)

16,572

 

 

(25,063

)

 

11,043

 

 

(15,300

)

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to:

 

 

 

 

 

 

 

Osisko Gold Royalties Ltd’s shareholders

17,159

 

 

(14,759

)

 

17,485

 

 

(4,165

)

Non-controlling interests

(587

)

 

(10,304

)

 

(6,442

)

 

(11,135

)

 

 

 

 

 

 

 

 

Net earnings (loss) per share

 

 

 

 

 

 

 

Basic and diluted

0.09

 

 

(0.09

)

 

0.10

 

 

(0.02

)














Osisko Gold Royalties Ltd
Consolidated Statements of Cash Flows
For the three and six months ended June 30, 2022 and 2021
(tabular amounts expressed in thousands of Canadian dollars)

 

Three months ended
June 30,

 

 

Six months ended
June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

 

Net earnings (loss)

16,572

 

 

(25,063

)

 

11,043

 

 

(15,300

)

Adjustments for:

 

 

 

 

 

 

 

Share-based compensation

2,525

 

 

2,090

 

 

6,156

 

 

5,390

 

Depletion and amortization

15,983

 

 

11,794

 

 

31,000

 

 

24,055

 

Impairment of assets

384

 

 

40,479

 

 

904

 

 

44,879

 

Finance costs

2,570

 

 

1,716

 

 

4,715

 

 

3,555

 

Share of loss of associates

1,219

 

 

1,861

 

 

(1,054

)

 

1,893

 

Net gain on acquisition of investments

-

 

 

(211

)

 

(48

)

 

(649

)

Change in fair value of financial assets and liabilities at fair value through profit and loss

(12,106

)

 

1,777

 

 

(3,930

)

 

3,685

 

Net gain on dilution of investments

(1,544

)

 

-

 

 

(3,604

)

 

(1,391

)

Gain in deemed disposal of associate

(11,854

)

 

-

 

 

(11,854

)

 

-

 

Foreign exchange (gain) loss

(9,156

)

 

622

 

 

(10,556

)

 

1,395

 

Flow-through shares premium income

(573

)

 

(2,798

)

 

(914

)

 

(3,268

)

Deferred income tax expense

9,735

 

 

3,483

 

 

14,863

 

 

6,833

 

Other

2,202

 

 

(432

)

 

1,859

 

 

493

 

Net cash flows provided by operating activities
before changes in non-cash working capital items

15,957

 

 

35,318

 

 

38,580

 

 

71,570

 

Changes in non-cash working capital items

(16,181

)

 

(4,401

)

 

(15,194

)

 

(19,329

)

Net cash flows (used in) provided by operating activities

(224

)

 

30,917

 

 

23,386

 

 

52,241

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

Acquisition of Tintic, net of cash acquired

(62,189

)

 

-

 

 

(62,189

)

 

-

 

Acquisition of investments

(384

)

 

(4,026

)

 

(11,118

)

 

(13,837

)

Proceeds on disposal of investments

3,186

 

 

8,338

 

 

24,241

 

 

28,109

 

Acquisition of royalty and stream interests

-

 

 

(39,085

)

 

(9,290

)

 

(42,877

)

Mining assets and plant and equipment

(20,973

)

 

(53,839

)

 

(34,007

)

 

(89,651

)

Exploration and evaluation expenses, net

(681

)

 

(1,028

)

 

(686

)

 

(1,163

)

Reclamation deposits, net

(13,371

)

 

-

 

 

(13,371

)

 

-

 

Other

(774

)

 

(201

)

 

(1,038

)

 

(201

)

Net cash flows used in investing activities

(95,186

)

 

(89,841

)

 

(107,458

)

 

(119,620

)

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

Bought deal equity financing

-

 

 

-

 

 

311,962

 

 

-

 

Share issue costs

(1,125

)

 

-

 

 

(13,941

)

 

-

 

Increase in long-term debt

3,666

 

 

-

 

 

7,536

 

 

50,000

 

Repayment of long-term debt

(115,095

)

 

-

 

 

(115,700

)

 

(50,000

)

Investments from minority shareholders

213,153

 

 

-

 

 

255,543

 

 

38,841

 

Share issue expenses from investments from minority shareholders

(5,108

)

 

-

 

 

(7,238

)

 

(2,581

)

Exercise of share options and shares issued under the share purchase plan

312

 

 

8,129

 

 

934

 

 

13,107

 

Normal course issuer bid purchase of common shares

-

 

 

-

 

 

(4,879

)

 

(4,464

)

Dividends paid

(9,755

)

 

(7,914

)

 

(18,478

)

 

(15,696

)

Capital payments on lease liabilities

(1,060

)

 

(1,928

)

 

(6,332

)

 

(2,780

)

Withholding taxes on settlement of restricted and deferred share units

(1,800

)

 

(3,544

)

 

(2,224

)

 

(3,582

)

Other

1,332

 

 

(3

)

 

2

 

 

(3

)

Net cash flows provided by (used in) financing activities

84,520

 

 

(5,260

)

 

407,185

 

 

22,842

 

 

 

 

 

 

 

 

 

(Decrease) increase in cash before effects of exchange rate changes on cash

(10,890

)

 

(64,184

)

 

323,113

 

 

(44,537

)

Effects of exchange rate changes on cash

10,723

 

 

(1,483

)

 

10,472

 

 

(3,024

)

(Decrease) increase in cash

(167

)

 

(65,667

)

 

333,585

 

 

(47,561

)

Cash – beginning of period

449,450

 

 

320,630

 

 

115,698

 

 

302,524

 

Cash  – end of period

449,283

 

 

254,963

 

 

449,283

 

 

254,963