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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, Nov. 09, 2021 (GLOBE NEWSWIRE) — Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX & NYSE) today announced its consolidated financial results for the third quarter of 2021. Amounts 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)
    • Record operating cash flows from the royalties and streams segment2 of $44.1 million (Q3 2020 – $37.3 million)
    • 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)
    • Adjusted earnings5 from the royalties and streams segment2 of $23.3 million, or $0.14 per basic share5 (Q3 2020 – $18.4 million or $0.11 per basic share)
    • 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

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 Amalgamated 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.

  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 )

(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 margin 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 the Segment Disclosure section of this MD&A.

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 construction, 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 Kenya 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 believes 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 reclamation 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.

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”).

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
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 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 %

(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.

 

  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  

(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.

  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  

(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.

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 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, 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 objective 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 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 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.

 
 
Osisko Gold Royalties Ltd   
Consolidated Balance Sheets   
(tabular amounts expressed in thousands of Canadian dollars)  
     
  September 30,     December 31,  
  2021     2020  
  $     $  
       
Assets      
       
Current assets      
       
Cash 151,945     302,524  
Short-term investments     3,501  
Amounts receivable 16,038     12,894  
Inventories 19,172     10,025  
Other assets 2,608     6,244  
  189,763     335,188  
       
Non-current assets      
       
Investments in associates 126,035     119,219  
Other investments 165,485     157,514  
Royalty, stream and other interests 1,147,153     1,116,128  
Mining interests and plant and equipment 590,989     489,512  
Exploration and evaluation 45,875     42,519  
Goodwill 111,204     111,204  
Other assets 13,821     25,820  
  2,390,325     2,397,104  
       
Liabilities      
       
Current liabilities      
       
Accounts payable and accrued liabilities 46,700     46,889  
Dividends payable 9,160     8,358  
Provisions and other liabilities 15,956     4,431  
Current portion of long-term debt     49,867  
  71,816     109,545  
       
Non-current liabilities      
       
Provisions and other liabilities 39,934     41,536  
Long-term debt 405,306     350,562  
Deferred income taxes 61,669     54,429  
  578,725     556,072  
       
Equity      
       
Share capital 1,779,565     1,776,629  
Warrants 18,072     18,072  
Contributed surplus 41,041     41,570  
Equity component of convertible debentures 14,510     17,601  
Accumulated other comprehensive income 60,181     48,951  
Deficit (260,637 )   (174,458 )
Equity attributable to Osisko Gold Royalties Ltd’s shareholders 1,652,732     1,728,365  
Non-controlling interests 158,868     112,667  
Total equity 1,811,600     1,841,032  
  2,390,325     2,397,104  

Osisko Gold Royalties Ltd
Consolidated Statements of Income (Loss)
For the three and nine months ended September 30, 2021 and 2020
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)
 
  Three months ended
September 30,
    Nine months ended
September 30,
 
  2021     2020     2021     2020  
  $     $     $     $  
               
               
Revenues 50,035     55,707     174,204     149,070  
               
Cost of sales (3,507 )   (15,236 )   (34,000 )   (45,464 )
Depletion of royalty, stream and other interests (12,733 )   (9,665 )   (36,097 )   (32,057 )
Gross profit 33,795     30,806     104,107     71,549  
               
Other operating expenses              
General and administrative (11,359 )   (5,957 )   (30,436 )   (18,059 )
Business development (933 )   (1,910 )   (3,038 )   (4,682 )
Exploration and evaluation (336 )   (32 )   (1,516 )   (108 )
Impairments – royalty, stream and other interests         (2,288 )   (26,300 )
Impairments – mining exploration, evaluation and development (33,320 )       (73,799 )    
Operating (loss) income (12,153 )   22,907     (6,970  )   22,400  
Interest income 1,268     1,327     3,926     3,523  
Finance costs (6,269 )   (6,440 )   (18,296 )   (19,938 )
Foreign exchange gain (loss) 798     (419 )   (737 )   1,299  
Share of loss of associates (772 )   (760 )   (2,665 )   (3,934 )
Other gains, net 15,296     27     15,015     11,462  
(Loss) earnings before income taxes (1,832 )   16,642     (9,727 )   14,812  
Income tax expense (4,320 )   (4,128 )   (11,725 )   (2,568 )
Net (loss) earnings (6,152 )   12,514     (21,452 )   12,244  
               
Net earnings (loss) attributable to:              
Osisko Gold Royalties Ltd’s shareholders 1,795     12,514     (2,370 )   12,244  
Non-controlling interests (7,947 )       (19,082 )    
               
Net earnings per share              
Basic and diluted 0.01     0.08     (0.01 )   0.08  

 
 
 
Osisko Gold Royalties Ltd
Consolidated Statements of Cash Flows
 For the three and nine months ended September 30, 2021 and 2020
(tabular amounts expressed in thousands of Canadian dollars)
 
 
  Three months ended
September 30,
    Nine months ended
September 30,
 
  2021     2020     2021     2020  
  $     $     $   $  
               
Operating activities              
Net (loss) earnings (6,152 )   12,514     (21,452 )   12,244  
Adjustments for:              
Share-based compensation 3,845     2,567     9,235     6,932  
Depletion and amortization 12,918     9,954     36,973     33,067  
Impairment of assets 33,320     1,281     78,199     31,604  
Finance costs 2,058     1,888     5,613     6,638  
Share of loss of associates 772     760     2,665     3,934  
Net gain on acquisition of investments (6,989 )   (982 )   (7,638 )   (3,827 )
Change in fair value of financial assets at fair value through profit and loss (3,757 )   (326 )   (72 )   (1,332 )
Net gain on dilution of investments         (1,391 )   (10,381 )
Net gain on disposal of investments             (1,226 )
Foreign exchange loss (gain) (671 )   391     724     (1,166 )
Flow-through shares premium income (2,602 )       (5,869 )    
Deferred income tax expense (recovery) 3,988     3,615     10,821     1,590  
Others (2,843 )   35     (2,351 )   110  
Net cash flows provided by operating activities
before changes in non-cash working capital items
33,887     31,697     105,457     78,187  
Changes in non-cash working capital items 7,196     4,426     (12,133 )   (2,842 )
Net cash flows provided by operating activities 41,083     36,123     93,324     75,345  
               
Investing activities              
Net disposal of short-term investments 3,408     (519 )   3,408     (1,588 )
Acquisition of investments (28,328 )   (8,401 )   (42,165 )   (42,344 )
Proceeds on disposal of investments     7,163     28,109     10,600  
Acquisition of the San Antonio gold project     (48,708 )       (48,708 )
Acquisition of royalty and stream interests (25,836 )   (12,512 )   (68,713 )   (36,879 )
Mining assets and plant and equipment (54,865 )   (16,072 )   (144,516 )   (42,487 )
Exploration and evaluation expenses, net (4,307 )   (85 )   (5,470 )   (201 )
Restricted cash     4,762         4,762  
Others (63 )   206     (264 )   357  
Net cash flows used in investing activities (109,991 )   (74,166 )   (229,611 )   (156,488 )
               
Financing activities              
Private placement of common shares             85,000  
Increase in long-term debt         50,000     71,660  
Repayment of long-term debt         (50,000 )    
Investments from minority shareholders         38,841      
Share issue expenses from investments from minority shareholders         (2,581 )    
Exercise of share options and shares issued under the share purchase plan 87     6,249     13,194     7,382  
Normal course issuer bid purchase of common shares (26,037 )       (30,501 )   (3,933 )
Dividends paid (8,049 )   (6,882 )   (23,745 )   (21,063 )
Capital payments on lease liabilities (1,798 )   (201 )   (4,578 )   (594 )
Withholding taxes on settlement of restricted and deferred share units         (3,582 )   (2,094 )
Others (1,079 )   127     (1,082 )   (152 )
Net cash flows (used in) provided by financing activities (36,876 )   (707 )   (14,034 )   136,206  
               
(Decrease) increase in cash before effects of exchange rate changes on cash (105,784 )   (38,750 )   (150,321 )   55,063  
Effects of exchange rate changes on cash 2,766     (2,516 )   (258 )   (2,581 )
(Decrease) increase in cash (103,018 )   (41,266 )   (150,579 )   52,482  
Cash – beginning of period 254,963     201,971     302,524     108,223  
Cash – end of period 151,945     160,705     151,945     160,705  

 




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