Osisko Reports Strong Third Quarter 2020 Results

(firmenpresse) -
Montréal, November 9, 2020 - Osisko Gold Royalties Ltd (the Company or Osisko) (OR: TSX & NYSE - https://www.commodity-tv.com/ondemand/companies/profil/osisko-gold-royalties-ltd/) today announced its consolidated financial results for the third quarter of 2020.

Highlights (amounts in Canadian dollars, except otherwise noted)

- Record revenues from royalties and streams of $41.2 million (Q3 2019 - $33.9 million);
- Record cash flows from operating activities of $36.1 million (Q3 2019 - $28.3 million); $31.7 million before changes in non-cash working capital items (Q3 2019 - $25.1 million);
- Record cash operating margin1 of 96.4% from royalty and stream interests, generating $39.7 million in operating cash flow, in addition to a cash operating margin of $0.7 million from offtake interests;
- Earned 16,739 GEOs2 (Q3 2019 - 18,123 GEOs);
- Net earnings of $12.5 million, $0.08 per basic share (Q3 2019 - net loss of $45.9 million, $0.32 per basic share);
- Adjusted earnings3 of $17.5 million or $0.11 per basic share (Q3 2019 - $17.5 million, $0.12 per basic share);
- Cash on hand of $160.7 million and over $400.0 million further available under the credit facility as at September 30, 2020;
- Announced the spin-out of mining assets and certain equity positions through a reverse take-over transaction and the creation of a North American gold development company, Osisko Development Corp. (Osisko Development), which in conjunction completed a $100 million bought deal financing;
- The Canadian Malartic mine operators announced strong results from the drilling program at East Gouldie, which are expected to lead to a significant increase in the mineral resources estimate at year-end 2020. A preliminary economic assessment is also expected to be completed in early 2021, which may result in the start of mine shaft construction;
- Acquired the San Antonio gold project in Mexico for US$42 million, which will be spin-out to Osisko Development;

- Acquired an additional 15% ownership in a Canadian precious metal royalty portfolio, including royalties on the Island Gold and Lamaque mines;
- Announced that the Renard diamond mine, operated by Stornoway Diamonds Canada Inc., restarted operations in September 2020;
- Announced a strategic partnership with Regulus Resources Inc. (Regulus) whereby Regulus has agreed to grant Osisko an initial royalty and certain future royalty rights in exchange for an upfront cash payment of US$12.5 million ($16.6 million);
- Commercial production was declared by the operator of the Eagle Gold mine on July 1, 2020, on which the Company holds a 5% NSR royalty; and

- Declared a quarterly dividend of $0.05 per common share paid on October 15, 2020 to shareholders of record as of the close of business on September 30, 2020.

Sandeep Singh, President of Osisko commented on the activities of the third quarter of 2020: We had a very strong third quarter with production rebounding well and other significant catalysts. The spin-out transaction announced on October 5th is an important strategic milestone for the Company. It greatly simplifies Osisko into a pure-play royalty and streaming company, while maintaining exposure to the company-making assets contributed to Osisko Development. Our cornerstone Canadian Malartic royalty continues to create significant value for our shareholders as the joint venture partnership makes significant strides towards an underground development decision. We anticipate a continued upward trend in GEO deliveries in the fourth quarter, and we believe that we are in excellent position to meet our forecast for the second half of 2020.

Outlook

Osiskos guidance for the six months and the year ending December 31, 2020 is shown in the table below. For the full year 2020 guidance, actual results were used for the first semester and added to the forecast for the second semester of the year. For the outlook of the last 6 months of 2020, silver and cash royalties have been converted to GEOs using commodity prices of US$1,900 per ounce of gold, US$22 per ounce of silver and an exchange rate (US$/C$) of 1.33.


Six months ending Year ending December
December 31, 2020 31, 2020

(i) (i)
Low High Cash Low High Cash
margin margin

(GEOs) (GEOs) (%) (GEOs) (GEOs) (%)

Royalty 24,800 26,250 100 45,500 46,950 100
interest
s

Stream 8,000 8,450 87 17,150 17,650 81
interest
s

Offtake 200 300 2 850 900 3
interest
s

33,000 35,000 63,500 65,500
(i) Excluding any potential revenues from the Renard diamond mine for the six months ending December 31, 2020.


Q3 2020 Results Conference Call

Osisko will host a conference call on Tuesday, November 10, 2020 at 10:00 am EST to review and discuss its third quarter 2020 results.

Those interested in participating in the conference call should dial in at 1-(877) 223-4471 (North American toll free), or 1-(647) 788-4922 (international). An operator will direct participants to the call.

The conference call replay will be available from 1:00 pm EST on November 10, 2020 until 11:59 pm EST on November 24, 2020 with the following dial in numbers: 1-(800) 585-8367 (North American toll free) or 1-(416) 621-4642, access code 4896403. The replay will also be available on our website at www.osiskogr.com.

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 138 royalties, streams and precious metal offtakes. Osiskos portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, which is the largest gold mine in Canada. Osisko also owns the Cariboo gold project in Canada as well as a portfolio of publicly held resource companies, including a 14.6% interest in Osisko Mining Inc., 17.8% interest in Osisko Metals Incorporated and an 18.3% interest in Falco Resources Ltd. On October 5, 2020, Osisko Gold Royalties
Ltd announced the spin-out of mining assets and the creation of Osisko Development Corp., a premier
North American gold development company. This transaction is expected to close in the fourth quarter of 2020.

Osiskos head office is located at 1100 Avenue des Canadiens-de-Montréal, Suite 300, Montréal, Québec, H3B 2S2.

For further information, please contact Osisko Gold Royalties Ltd:

Sandeep Singh
President
Tel. (514) 940-0670
ssingh(at)osiskogr.com

In Europe:
Swiss Resource Capital AG
Jochen Staiger
info(at)resource-capital.ch
www.resource-capital.ch


Notes:

(1) Cash operating margin, which represents revenues less cost of sales, is a non-IFRS measure. The Company believes that this non-IFRS generally accepted industry measure provides a realistic indication of operating performance and provides a useful comparison with its peers. The following table reconciles the cash margin to the revenues and cost of sales presented in the consolidated statements of income (loss) and related notes (In thousands of Canadian dollars):

Three months Nine months
ended ended

September 30, September 30,
2020 2019 2020 2019
$ $ $ $

Revenues 55,707 109,235 149,070341,567


Less: Revenues from (14,464(75,314 (41,260(240,36
offtake ) ) ) 5)
interests

Revenues from royalty and 41,243 33,921 107,810101,202
stream
interests


Cost of sales (15,236(77,419 (45,464(247,61
) ) ) 6)

Less: Cost of sales of 13,738 74,300 39,114 237,452
offtake
interests

Cost of sales of royalty (1,498)(3,119) (6,350)(10,164
and stream )
interests





Revenues from royalty and 41,243 33,921 107,810101,202
stream
interests

Less: Cost of sales of roya(1,498)(3,119) (6,350)(10,164
lty and stream )
interests

Cash margin from royalty 39,745 30,802 101,46091,038
and stream
interests


96% 91% 94% 90%

Revenues from offtake 14,464 75,314 41,260 240,365
interests

Less: Cost of sales of offt(13,738(74,300 (39,114(237,45
ake ) ) ) 2)
interests

Cash margin from offtake 726 1,014 2,146 2,913
interests



5% 1% 5% 1%


(2) GEOs are calculated on a quarterly basis and include royalties, streams and offtakes. Silver earned from royalty and stream agreements was converted to gold equivalent ounces by multiplying the silver ounces by the average silver price for the period and dividing by the average gold price for the period. Diamonds, other metals and cash royalties were converted into gold 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 Nine months ended
September 30, September 30,
2020 2019 2020 2019

Gold(i) $1,909 $1,472 $1,735 $1,364
Silver(i) $24 $17 $19 $16

Exchange rate 1.3321 1.3204 1.3541 1.3292
(US$/Can
$)(iii)

(i) The London Bullion Market Associations pm price in U.S. dollars.
(ii) The London Bullion Market Associations price in U.S. dollars.
(iii) Bank of Canada daily rate.

(3) The Company has included certain non-IFRS measures including Adjusted Earnings and Adjusted Earnings per basic share to supplement its consolidated financial statements, which are presented in accordance with IFRS.

The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Adjusted earnings is defined as Net earnings (loss) adjusted for certain items: Foreign exchange gain (loss), Impairment of assets, including impairment on financial assets and investments in associates, Gains (losses) on disposal of exploration and evaluation assets, Unrealized gain (loss) on investments, , Share of loss of associates, Deferred income tax expense (recovery) and other unusual items such as transaction costs.

Adjusted earnings per basic share is obtained from the adjusted earnings divided by the Weighted average number of common shares outstanding for the period.

Three months ended Nine months ended
September 30, September 30,
2020 2019 2020 2019

(in thousands of C $ $ $ $
anadian

dollars, except p
er share
amounts)


Net earnings 12,514 (45,924) 12,244 (79,020)
(loss)


Adjustments:
Impairment of - 60,800 26,300 99,700
royalty,

stream and other
interests

Impairment of 1,281 12,500 5,304 12,500
investments

Foreign exchange 391 (498) (1,166) 1,145
loss
(gain)

Unrealized (gain) (1,308) (1,529) (16,766) 3,804
loss on
investments

Share of loss of 760 4,146 3,934 14,688
associates

Deferred income 3,615 (12,001) 1,590 (21,267)
tax expense
(recovery)

Transaction 276 - 276 -
costs (RTO
transaction)


Adjusted earnings 17,529 17,494 31,716 31,550

Weighted average 166,110 144,446 162,321 151,570
number
of

common
shares
outstanding
(000s)


Adjusted earnings 0.11 -0.12 -0.20 -0.21
per basic
share


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 managements expectations regarding Osiskos growth, results of operations, estimated future revenue, requirements for additional capital, production estimates, production costs and revenue, business prospects and opportunities are forward-looking statements. In addition, statements relating to gold equivalent ounces ("GEOs") are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the GEOs will be realized. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "is expected" "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions or variations (including negative variations of such words and phrases), or may be identified by statements to the effect that certain actions, events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, the performance of the assets of Osisko, that the conditions precedent to the spin-out of mining assets and the creation of Osisko Development Corp. will be met, that significant value will be created within the accelerator group of companies and Osiskos ability to seize future opportunities. Although Osisko believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors and are not guarantees of future performance and actual results may accordingly differ materially from those in forward-looking statements. Factors that could cause the actual results deriving from Osiskos 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; Osiskos 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 statements are not guarantees of future performance. Osisko cannot assure investors that actual results will be consistent with these forward-looking statements and investors should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.

For additional information with respect to these and other factors and assumptions underlying the forward-looking statements made in this press release, see the section entitled "Risk Factors" in the most recent Annual Information Form of Osisko which is filed with the Canadian securities commissions and available electronically under Osisko''s issuer profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov. The forward-looking information set forth herein reflects Osiskos 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.

Osisko Gold Royalties Ltd
Consolidated Balance Sheets
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars)

SeptemberDecember
30, 31,

2020 2019
$ $


Assets

Current assets

Cash 160,705 108,223
Short-term investments 21,568 20,704
Amounts receivable 11,554 6,330
Inventories 10,269 1,656
Other assets 2,944 3,516
207,040 140,429

Non-current assets

Investments in associates 123,946 103,640
Other investments 123,086 67,886
Royalty, stream and other interests 1,121,353 1,130,512


Mining interests and plant and 443,371 343,693
equipment

Exploration and evaluation 43,150 42,949
Goodwill 111,204 111,204
Other assets 26,920 6,940
2,200,070 1,947,253

Liabilities

Current liabilities

Accounts payable and accrued 34,186 18,772
liabilities

Dividends payable 8,341 7,874
Current portion of long-term debt 49,580 -
Provisions and other liabilities 4,600 1,289
96,707 27,935

Non-current liabilities

Provisions and other liabilities 39,940 29,365
Long-term debt 372,010 349,042
Deferred income taxes 53,235 47,465
561,892 453,807

Equity

Share capital 1,767,460 1,656,350


Warrants 18,072 18,072
Contributed surplus 39,796 37,642
Equity component of convertible 17,601 17,601
debenture
s
Accumulated other comprehensive inc 59,851 13,469
ome

Deficit (264,602) (249,688)
1,638,178 1,493,446


2,200,070 1,947,253


Osisko Gold Royalties Ltd
Consolidated Statements of Income (Loss)
For the three and nine months ended September 30, 2020 and 2019
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

Three months Nine months
ended ended

September 30, September 30,
2020 2019 2020 2019
$ $ $ $


Revenues 55,707 109,235 149,070 341,567



Cost of sales (15,236 (77,419 (45,464 (247,61
) ) ) 6
)
Depletion of royalty, st (9,665) (10,965 (32,057 (35,166
ream ) ) )
and other interests
Gross profit 30,806 20,851 71,549 58,785

Other operating expenses
General and (5,957) (4,559) (18,059 (15,034
administrative ) )

Business development (1,910) (1,375) (4,682) (4,899)


Gain on disposal of an - 7,636 - 7,636
offtake
interest

Exploration and (32) (48) (108) (139)
evaluation

Impairment of assets - (60,800 (26,300 (99,700
) ) )

Operating income (loss) 22,907 (38,295 22,400 (53,351
) )

Interest and dividend 1,327 1,091 3,523 3,183
income

Finance costs (6,440) (5,843) (19,938 (17,382
) )

Foreign exchange (loss) (419) 508 1,299 (1,104)
gain

Share of loss of (760) (4,146) (3,934) (14,688
associates )

Other gains (losses), 27 (10,971 11,462 (16,304
net ) )

Earnings (loss) before 16,642 (57,656 14,812 (99,646
income ) )
taxes

Income tax (expense) (4,128) 11,732 (2,568) 20,626
recovery

Net earnings (loss) 12,514 (45,924 12,244 (79,020
) )


Net earnings (loss) per V
share

Basic and diluted 0.08 (0.32) 0.08 (0.52)

Osisko Gold Royalties Ltd
Consolidated Statements of Cash Flows
For the three and nine months ended September 30, 2020 and 2019
(Unaudited)
(tabular amounts expressed in thousands of Canadian dollars)

Three months Nine months
ended ended

September 30, September 30,

2020 2019 2020 2019
$ $ $ $

Operating activities
Net earnings (loss) 12,514 (45,924 12,244 (79,02
) 0)

Adjustments for:
Share-based 2,567 2,052 6,932 6,273
compensation

Depletion and 9,954 11,287 33,067 36,113
amortization

Net gain on disposal - (7,636) - (7,636
of an )
offtake

Impairment of royalty, stream - 60,800 26,300 99,700
and other
interests

Finance costs 1,888 1,817 6,638 5,291
Share of loss of 760 4,146 3,934 14,688
associates

Net gain on (982) (540) (3,827 (628)
acquisition of )
investments

Change in fair value (326) 205 (1,332 1,399
of financial assets )
at fair value through
profit and
loss

Net gain on dilution - - (10,38 -
of 1)
investments

Net (gain) loss on disposal - (1,091) (1,226 3,136
of )
investments

Impairment of investments 1,281 12,500 5,304 12,500


Foreign exchange loss 391 (498) (1,166 1,145
(gain) )

Deferred income tax 3,615 (12,001 1,590 (21,26
expense ) 7)
(recovery)

Other 35 (66) 110 (559)
Net cash flows provided by 31,697 25,051 78,187 71,135
operating activities


before changes in non-cash
working capital
items

Changes in non-cash 4,426 3,243 (2,842 3,259
working capital )
items

Net cash flows 36,123 28,294 75,345 74,394
provided by operating
activities



Investing activities
Short-term investments (519) (9,614) (1,588 (25,84
) 4)

Acquisition of (8,401 (7,359) (42,34 (47,89
investments ) 4) 6)

Proceeds on disposal 7,163 71,434 10,600 129,90
of 8
investments

Acquisition of the San (48,70 - (48,70 -
Antonio gold 8) 8)
project

Acquisition of royalty (12,51 (43,501 (36,87 (71,47
and stream 2) ) 9) 0)
interests

Proceeds on disposal of - 43,182 - 43,182
royalty and
offtake
interests
Exploration and evaluation (85) (69) (201) 81
(expenses) tax credits,
net

Mining assets and (16,07 (15) (42,48 (603)
plant and 2 7
equipment ) )

Restricted cash 4,762 - 4,762 -
Other 206 (113) 357 -
Net cash flows (used in) (74,16 53,945 (156,4 27,358
provided by investing 6 88
activities ) )


Financing activities
Private placement of - - 85,000 -
common
shares

Exercise of share 6,249 15,446 7,382 21,714
options and shares
issued under the
share purchase
plan

Increase in long-term - 19,772 71,660 19,772
debt

Financing fees - (490) - (490)
Repayment of long-term - - - (30,00
debt 0)

Common shares acquired - (71,434 - (129,4
and cancelled through ) 86)
a share repurchase


Normal course issuer bid - - (3,933 (11,90
purchase of common ) 1)
shares

Dividends paid (6,882 (6,736) (21,06 (20,53
) 3) 8)

Other (74) 278 (2,840 86
)

Net cash flows (used in) (707) (43,164 136,20 (150,8
provided by financing ) 6 43)
activities


(Decrease) increase in (38,75 39,075 55,063 (49,09
cash before effects 0) 1)
of exchange rate
changes on
cash

Effects of exchange (2,516 1,038 (2,581 (1,472
rate changes on cash ) ) )


(Decrease) increase in (41,26 40,113 52,482 (50,56
cash 6) 3)


Cash - beginning of period 201,97 83,589 108,22 174,26
1 3 5

Cash - end of period 160,70 123,702 160,70 123,70
5 5 2

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Datum: 10.11.2020 - 02:53 Uhr
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