Osisko Gold Royalties Ltd Q1 2023 Earnings Call

Good morning, ladies and gentlemen, and welcome to the Cisco Gold royalties Q1, 2023 results conference call. After the presentation. We will conduct a question and answer session. If you would like to ask a question. Please press star followed by the number one on your telephone keypad. Please note that this call is being recorded.

They may 11, 2023 at 10, a M eastern time today.

Today on the call we have Mr. Sandeep Singh, President and Chief Executive Officer, and Mr. <unk>, <unk>, Chief Financial Officer, and Vice President Finance and I would like to turn the meeting over to your host for today's call. Mr. Sandeep thing.

As long as you've been dumped I missed you really.

Or is it other permits you missed the debate event, well Duh Arista Cisco limited.

Taylor, Please I'll pass don't do closer to home and South because you don't give it for.

So what is the repos in guests you'll have a piece of electric it was C D and E mail.

So your pontoon up because at the peloton was just like we don't see that almost do me the first one.

The left does that also that they'll do so Mr. Sandeep Singh President is shift alleged axial industrial school. They typically will shift to let Jack Sophie nausea is this piece does not Jim haven't.

And also the leprechaun.

Mr Singh.

Now it could be a more local known good morning, everybody. Thanks for being with US myself in February I'll. As you just heard that are gonna be walking you through the quarter are an excellent start to the year for us. So so happy to be giving you that update.

The presentation is available on the.

The web site as well as through the webcast as of this quarter.

So oh, so you have that in front of you and we will be referring to page numbers as we go through things.

Perhaps with slide three.

As I said are an excellent start to the year on the left hand side. There all of those are high level metrics have already been released and Ah I forget and Fred will walk you through some of the more specifics in a second.

Over the quarter.

Continue to build up cash.

And decided to share some of it.

By increasing our dividend by just over 9%, we've said it over and over that we continue to prioritize returns to shareholders.

And look for opportunities to do that and find the right balance in doing that so very happy to kind of.

I hit the button on another increase after a small hiatus, where we're more active on the buyback.

So that's positive as well.

Very happy to add.

Forgive me nominate a Norman Macdonald to our board of directors.

I'm Gonna all individual.

Phenomenal resource Investor in this space for 25 plus years, many of you would've known through his prior prior work, although weather at our Invesco or teachers are beutel Goodman among other places so a phenomenal addition.

And when he joins in due course after the AGM and look forward to having him on the team, but also want to thank Charlie page who.

Who is reaching the tail end of his 10 year based on our policies.

And decided not to stand for election, he's been a great story for the company since the creation of a Cisco royalties and the tail end up be Cisco one days.

So thank him for his contributions.

And look forward to adding norm to the team.

<unk> would make.

The seventh.

Yeah, Sam This new board member in the last sort of circa three and a half years as part of our board renewal process and again strong strong addition to the team.

So with that I'll pass it onto your thread for the first section to walk you through the quarter and then I'll pick back up a little bit later on so Fred over to you. Please.

Thank you Sandeep or don't methane next it was running at a new collectors off that someone was extended because it doesn't put the mask. Good morning. Thank you for joining us today will be brief the numbers speak by themselves, let's start with some highlights on slide three upside the presentation.

A slightly above 23000 geos in Q1, 'twenty two 'twenty three a decrease of 27% over the first quarter of 2022.

Revenue was up $59 6 million compared to $50 7 million in Q1 of last year, which translated into a cash flows from operations of $45 5 million compared to $40 5 million to last year. Our cash margin was stable at 93%, we have repaid an amount of <unk>.

15 million on our revolving credit facility.

And despite that repayment, we ended the quarter with a cash balance of $119 million compared to 91 million on December of last year.

On slide four we present, our geos by asset and by commodity gold represented 65% of our deal was in the first quarter to 22% and diamonds and other commodities 13%.

On slide five we present the growth in our revenues and our operating cash flows mostly as a result of increased deliveries.

Our royalty.

Good evening.

On slide six net earnings were $28 million elegance and oven.

Per share compared to $16 8 million or 10 cents per share last year.

Adjusted earnings were $32 6 million or <unk> <unk> per share compared to $24 8 million or 15 cents per share in Q1 of 2022.

On slide seven.

We have a summary of our quarterly results and details equaled 80, 23000, geos compared to 18000.

<unk> and Q1 of last year, our gross profit amounted to $42 million compared to 36 million in 2022.

On slide eight we have the breakdown of our cash margin the cash margin from our royalties reached $29 million cash margin from our spring amounted to $16 5 million.

For a total <unk> of $55 5 million compared to $47 5 million last year.

And on slide nine we have a summary of our balance sheet position, our cash balance stood at $119 million.

We held equity investments valued at $494 million revolving credit facility was drawn by $44 million.

For a net debt position of $15 million at the end of Q1 compared to $57 million.

Beginning of this quarter.

Our available credit.

Under the revolving credit facility was approximately $616 million, including the accordion.

And finally as a result of our strong margins and cash flows and we increased our quarterly dividend by 9% to six cents per share and.

Starting this quarter.

We will now turn the call back to Sandeep for a company review of our assets.

Near term catalyst.

Thanks, very much Fred.

So look I will be brief not going through all the slides and realized today is a busy day for most people.

And some of these some of these slides you're used to seeing from US I will pick out a few things that happened during the quarter that I think are relevant to talk about men and then make wafer for questions as soon as possible and doing so I'll skip past slides 11 and 12.

If you're following on the deck and pause on slide 13 for a second.

To talk about cable Arctic so overall in the quarter I would say a little bit lighter in terms of our deliveries from from sorry from Arctic in Q1.

Certainly made up by by other assets. So overall, a great quarter that I just walked you through.

I think some of that has to do with just.

The underground the first the first stopes in the underground being later in the quarter than expected.

The first production blast that Odyssey South was in late March.

A unique or a partner is expecting 50000 ounces of underground contribution. This year. Other progress includes the shaft sinking which has now commenced so good good progress there overall.

And we expect our we expect good use over the course of the year I would remind people that from a global perspective.

Throughput has been reduced down from circa 60000 times to 51% that you wanted to 5000 tonnes per day.

By agnico intentionally to kind of optimize the transition now that the last truck or has come out of the Canadian Arctic pit and mining has transitioned completely to the Barnett pit and the underground.

We hope that that that transition back to full run rate.

Is is in the near term I think the last talked about it being 2024 early 'twenty 'twenty four.

We will see how that progresses, but overall still a phenomenal asset doing phenomenal things for us that on the day to day side.

More in terms of the future of the assets you've heard us talk about it youre hearing some of those same updates which are phenomenally important for us in terms of filling the mill are growing the resource looking at new mine plan. So in terms of the rest of this year.

We're already in May, but looking forward to that update a site visit bike because that's being run which many of you probably will be on in June .

Looking for the exploration update in kind of a broader update that accompanies that that that events and then later in the year the new study.

Which will hopefully start to fill in some of the puzzle pieces with respect to how exactly that mill and that complex are going to be optimized and maximize and so a lot of good news alone used we expect that needs to be good.

Two to flow through over the course of the year.

Excuse me jumping to slide 15.

Touching on some of the other core assets.

Bearing with Mentos a good quarter.

They're all I'd say at Mentos, we saw.

Capstone, our partner talk about some preventative maintenance that they took that they undertook in Q1 to increase increase excuse me reliability.

Over the quarter.

Throughput averaged just over 16000 tonnes a day versus just over 15000 tons a day in Q4.

Importantly, there was good science of that progress in February where the average was 19000 tonnes a day. So I think we're getting there our partners getting there.

And importantly in our last discussions that are in their last public disc.

Disclosure, they talked about expectations to get to that steady state consistently and I'm quoting now in the very near future. So.

Hopefully that maintenance that was undertaken in Q1.

Sets them up for a strong a strong three quarters ahead.

At Eagle.

Good quarter. Good Q1 are just shy of 38000 ounces produced versus 24000 ounces in the same period last year. This is the first quarter, where they ramped up to stacking a year round.

So and I think they showed that they can do that successfully so that's a big step forward for the asset in terms of reaching steady state.

And with a good Q1 behind us that bodes well at Eagle that bodes well for the rest of the year. So so kudos to the team there.

And similarly at Eleonore, a good Q1.

66000 ounces produced there in Q1 versus <unk> 46 last year.

And really I think the a b.

The upshot of that is.

Increased focus but increased success rate I guess in terms of recruiting and less absenteeism, resulting in and just higher mill throughput I think that was in operation a fly in fly out why our operation that was.

Significantly more challenge than perhaps others throughout the COVID-19 period, and the and the overall.

Flux of of people in the mining sector Unemployment's perspective, so good to see them get a handle on that and hopefully continue to drive forward.

I will jump now to slide 18 to touch on a handful of.

Of.

The positive developments in the development portion of the portfolio.

Or the new assets perspective, as well, maybe starting with CSA.

Good progress on that transaction closing over the course of the last couple of months in particular.

If you're following the metals acquisition story Dave.

Now filed there are four statement.

Which I believe is.

Boy.

Blessed by the SEC or will be eminently they've announced their pipe financing.

Which they can continue to grow but at least has the basics of what they need to get a transaction done.

And our understanding is and will be announcing a shareholder vote date.

In the extreme near term sorry.

So everything they are driving towards.

So we look forward to that that transaction, taking shape here still over the course of Q2 is our expectation.

Excuse me at windfall.

A very successful transaction with the joint venture that was announced goldfields.

Yeah. So you know a huge endorsement of the project by a senior company a significant derisking of what is a very important asset in our development portfolio.

And we've said I've said for a long time.

That windfall is an asset that matters in the sector.

At times have been doubters.

Doubters are question marks about that but the size the grade the upside in Canada as I said all of that matters and so it's good to see others.

At the same way and good to see a fully financed.

Hum asset in our portfolio moving forward.

I think as well the combination of skill sets there to build operate explore permit.

Well given that Theres still a very under explored excuse me under explored.

<unk>.

And it was positive to see goldfields being at the same way talking about a lot of upside.

On the immediate deposit, but also on strike and a depth, but also on the broader land package. So overall a win win win.

And we look forward to the.

The thing that partnership developing hopefully intensify their work there on on the asset.

Let me next touching on her most up a little bit we're still driving towards an F. I D point this year on Taylor Hermosa.

Her most is made up of Taylor and Clark.

But worth noting that in her most of that was added to the fast 41 list by the V. O E. Pardon me a note of energy.

<unk> stands for fixing America's surface Transportation Act, so essentially an expedited review.

Worth noting of Taylor is largely permanent it has.

You know, it's a it's water use permits at the aquifer protection permit it needs other minor permits along the way, but it's it's it's largely advanced in that process, but what we see there is a positive is obviously in relation to things like Clark, which is the battery grade manganese.

Separate.

And of the deposit.

But also in time I think just be expedited review potential for all of her most Ah Ah yeah.

Time, I think leads to a better pathway forward to the forest service ground, which is another layer of upside there on the on the broader land package. So all that is good news and as I said the biggest the biggest catalyst point there would be the point, but a significant amount of investment being made by sell through to their.

Even prior to that this year.

Yeah.

Maybe jumping to slide 19.

To touch on casino a little bit.

And if you haven't been following that story in early April our western copper and gold announced a circa $20 million investment by Mitsubishi minerals material excuse me for <unk>.

5% of the company Rio Tinto maintained their pro rata.

The small top up to to keep them at 8%.

So good news there in terms of the.

Broader collective that is supporting that that that asset in that company uses a very good comparable porphyry that can be built and in my opinion should and will be built.

These investments don't ticked that box fully in terms of a shovel in the ground or anything close, but certainly it's a very promising to see that collective are forming around our western copper hopefully in time, a coalition of the willing so that's an important asset for us that's that's moving forward.

In the background.

I guess with that I will just the highlights slide 21, which you've seen versions of <unk> in the past we've updated this slide more recently, so I'm not sure everyone's seen the updated version to take into account.

Into accounts Ah another $1 1 million meters of drilling in 2022, So a 60 year in a row, if you squint and round, where we've been on average over 1 million meters are out a million meters.

Depending on how you want to look at it and obviously had touched on some of the highlights that are coming out of that work, but there are many many others and if you look at slide 21, you see a story of <unk>.

A year ago. It was a significant additions to the resource base. This year with significant movement in the quality of those resources with a lot of ounces.

Moving from MNI into a significant pnp increase.

We will continue to see that ebb and flow, but it's just a lot of good work being done by our partners that we are and our shareholders are benefiting from.

And then on slide 22.

Just a recap of where we're trading.

We've had a good start to the year.

Not one we're satisfied with but we've got a good start to the year, we've outperformed but really we're still just making up ground in our minds importantly, the underlying NAV keeps growing based on our partner's efforts some of which I just highlighted.

As our asset base continues to improve.

At our as our as our assets are hugely important to most if not many at all of our partners.

Tour of advancing them so.

That's our the end of what I want to touch on it at least formally.

And and certainly operator happy to take questions. At this time around we do have some questions on the webcast. If it's all the same you can you can put your questions through the call. If you put them through the webcast you have to type them in we do see them, we'll probably get to those after those that are on the phone line.

But operator over to you to see if there are any questions on the line of Michael <unk>.

Darwin now if you do have any questions.

Okay.

And your first question will be from Ralph precede those caps.

Capital. Please go ahead.

Oh, Thanks, operator, thanks for taking my questions Oh, Sandy just firstly on the <unk>.

The MD&A disclosure about stronger G OS through the rest of the year and I just want to kind of see if I have it right that the combination of CSA, plus mantles blancos proximal Arctic as kind of covering the bulk of where we're trending in terms of the first half second half split of if I have that right or if there are any other assets that you see that could.

Sort of complement that a stronger T O.

As we get into year end.

No look I think that's largely correct I would include Eagle.

Eagle and that mix, even though they had a good quarter and seasonally it wasn't.

It's still going to have a stronger rest of the year, we believe and if you look at things like C. V that was one that had a tougher Q1. They had some equipment issues that had been resolved. So we expect to see some progress there, but overall I think the crux of what you said is accurate.

Okay, great great. Thanks for that and I wanted to come and maybe ask a question on the deal pipeline I think we've seen this kind of a 2000 dollar an ounce gold price uptick you know, we don't know if a sort of sustainable or were going for higher levels. Here. If we if we do would you expect.

To see some go ahead decisions on growth projects that are in the gold pipeline as sort of a source for more deal, making or would you see the potential for opportunistic M&A.

Using royalties to fund M&A as a mechanism for the for the next few deals in the pipeline.

Look I think it's both so I think it's all of the above and others certainly a 2000 dollar gold price is nothing to whine about so we were optimistic about the future, but I think we're very comfortable with where the prices now.

It does lead to exactly what you said, which is yeah go ahead decisions on assets.

Significant funding for the right assets, maybe not all assets in this market, but the right assets.

Seen deals when Paul is an example of that.

Development company.

M&A transactions haven't been in Vogue for for a while as people are focused on production.

But but I think you know in a world of finite assets, we're seeing that start to change as well.

So yes, no I think that does bode well I think the other thing I would add.

He is just generally you know Walter right I still think even at $2000 gold in the mining sector and in the.

The entire economy, I think we're seeing a tighter.

Crunch on credit.

And access to credit access to debt, both access to and cost of and that's pushing people back towards towards us in our business as well. So we're kind of in a sweet spot here, where not only a commodity prices are very attractive, but there's you know there's still just not that much.

Capital, both equity and debt to fund what the sector needs and that's that's what historically the royalty streaming sector has bridged tore so I do see that pipeline getting better not worse.

Okay.

It's good context, so thanks very much.

Thank you no problem Rob Thank you.

Next question will be from Adrian day Investor. Please go ahead.

Yeah, Hi, how are you I have two questions. If I may the first one a broader question I think I heard 67% of your revenue from gold are you comfortable with that kind of mix or.

How low would you be comfortable with go going.

That's the first question and then the second question I just wanted to clarify some things on my Youll royalty on the lot take is it actually an on melodic the ground or does it cover all the throughput from the mill.

Okay, Hi, Adrian Yeah happy to cover both of those questions.

Good question, so look with respect to the the metals mix, yes. It was 65% for the quarter that was roughly consistent when you look at gold and silver you add another 20, some odd percent yeah. That's that's the crux of our business.

And that's not changing overall, if you look at it as kind of on a near term basis or are a longer term NAV or longer term production basis, you kind of ended up in the 70 2010 type of split 70 goal 20th silver 10% other.

Right now that 10% others made up of diamonds.

But as we've talked about in the past you know those are shorter lives and less important to us and those will as they fizzle out there'll be replaced by by 10%, 10%. Other that is made up primarily of base metals and COO.

Copper so that's the split we feel comfortable with how we're made up right now and our focus will continue to be on those those primary objectives.

With respect to melodic excuse me.

And you can pick up some of this on slides 13 and 14.

We have both I guess, so we have a royalty on galactic that is 5% of the open pit on slide 13 on the bottom left you'll see what it translates to on the underground deposits.

But based on the current mine plan that Nico has put out its about four 5% on the underground and the more east Goldie they find the more that will trickle up.

As well, but five on the open pit four and a half on the underground is a fair way to look at it right now.

Outside of that we do have a royalty on the mill. So we have those royalties I've. Just described on everything that is mill Arctic AR that was sold to agnico and Yamana eight years ago.

Anything else that goes through the mill.

That they're talking about we would get a 40 cent per ton mill royalty on.

And when there is 40000 tons of free capacity in the mill, that's going to be important that that's useful.

Importantly, as well or more importantly, some of those sources of extra mill feed that they're talking about putting through there.

Upper Beaver potentially other our.

Other resources like upper Canada, and in in Ontario, and on Upper Beaver, We do have a 2% royalty as well. So we can get the double dip on the mill royalty and the 2%. So a lot of there'd be a lot to unpack there, but the good news is on the <unk>.

I agree with 15 million ounces.

That've been delineated in the underground so far we would have an aggregate four 5% royalty and and we have other sources of catalysts that could put additional material through that mill. So hopefully that that that's clearer answers. Your question Yeah. No. That's excellent I honestly didn't realize you had the royalty.

So George on the mill throughput so that's great.

Yeah look I mean, it was it was clear even to the team you know nine years ago that that mill, a 60000 ton per day mill in the Abitibi has a valuable resource it hasn't had a day of spare capacity or a ton of spare capacity in the last 10 years of mining the mill Arctic now mine.

But in time, it will and we like unique uncle he believes that it will become the center of gravity in the Abitibi for anything that either is not viable on its own or just would be made more viable if it didn't need a standalone mill. So yeah no. It's all good news and as I said earlier the updates that we're expecting.

And kind of expecting pretty soon now the year does fly by in June and at the end of the year I think will be.

Good gates to go through in terms of how we can make I was thinking about the that whole picture.

Okay, great. Thank you so much.

My pleasure Hadrian.

Thank you next question will be from Kerry Smith.

<unk> Securities. Please go ahead.

Thanks, operator.

Sandeep do you think based on your analysis that you will be.

And in that copper stream on <unk>.

On the mine, where see it with metal or sports or how have you started doing that today.

Yeah look I mean, my analysis is is less important there their analysis matters more of this is there they're the right.

As a backstop.

And all of our conversation so with that caveat I would say in all of our conversations.

We see them valuing that copper stream.

E <unk>.

Valuing the existence of it and they're in their funding stack.

And and we do see them, taking some of it now that remains to be seen and it remains to be seen how much they take but yeah I'm optimistic that we'll be able to fund a good chunk of that and either way, but that deterioration will happen here in the very near term.

And do you think that when they decide to that that would be our closing or do you think that would be a subsequent event I guess it would be up closing, perhaps it would be your expectation.

Yeah. So the gate they need to go through is there a shareholder vote, which as I said theyre going to be setting a date here for imminently.

And I expect that date to be basically very early June .

Barring any any kind of.

Foreseen circumstances.

Once that vote happens they'll know what the redemptions have been in the stack they'll know what their pipe is by then and then the gap. If there is one will be made up of other sources, starting with the copper stream. So yeah. It's all it's all going to flush itself out here in the next several.

Several weeks.

Okay. Okay. That's helpful. Thank you.

No problem and look I fully admit them and this is no fault of anybody this has been a long transaction. The team there at that Machnik, Michael and his team have done a phenomenal job of a stick handling what is a very complicated transaction given the size of it the moving pieces the copper price dip would be an understatement.

It was felt over the course of 2022 but it's really nice to see them that's come out of them.

I come out of that that extended period are at.

At the right time for them at the right time for us and and look forward to getting that done.

Thank you. Thanks, thanks, Thanks, a lot Gary.

As a reminder, ladies and gentlemen, if you would like to ask a question. Please press star followed by one on your telephone keypad.

And your next question will be from Cosmos <unk> of CIBC. Please go ahead.

Hi, Thanks, Sandeep bread and.

Hum.

Maybe christophe two questions on taxes.

It sounds like the global minimum tax might actually happen maybe sometime in 2024.

Have you went through an analysis in terms of what the potential impact could be for Cisco gold royalties or anything that you can potentially share with us.

Sure Hi Cosmos.

I can start I can say.

I can start.

And and do my best attacks impersonation, and Fred you can you can shut me down afterwards, but look we have obviously been tracking that Kyle.

I mean, how long has it been two years 18 months at least.

And first and foremost as you would know we have the least.

We just have more royalties and streams. So by fact, we have the least amount of stream international stream exposure.

So if it were to apply it would it would have what feels like a pretty minimal impact to us, but more importantly, we do not meet the minimum threshold to be caught in that 15% global minimum tax is based on one of the pillars is based on revenues of at least 750 million euros.

And whilst we hope to get there one day, we are not there yet.

So it looks to us like it it's a it trips up some of our larger peers, but not us if that changed.

As I said.

Her back to the start up my comment, but right now theres been no discussions to change that threshold that pillar.

So we don't see it impacting us the same way it would be it would be impacting some of our peers as you rightly point out it looks like in 2024, sorry did I Miss anything important there.

No you're 100% correct somebody.

And even with the potential silver stream from CSA and copper stream potentially from CSA, you would still fall under that.

That number.

Yeah look what are we at shred 200, and some odd to 'twenty to 'twenty five.

Sure.

We would we would need to have quite a bit of success from a revenue generating potential to be at 750 million Euro bill discount us, but it might take us a little while I get there I believe in your Sandy you'll get.

[laughter] and then my second question on taxes.

I guess last night.

You know you recorded an expense income tax expense of $8 4 million.

But in terms of your adjusted earnings you adjusted out seven or $6 million, a big chunk of it could you maybe remind us of the rationale for that adjustment once again I think I'd do it every quarter I just wanted to get a reminder.

Sure Fred I've exhausted my my my attacks impersonation I can if you want to pick that up.

Essentially I mean, essentially caused most of that has to do with with deferred taxes, but why don't you go ahead.

Okay, Yes, exactly we adjusted the adjusted earnings for deferred taxes right. Now. So these are not cash taxes, we have approximately $900000 of cash taxes paid in Q1, mostly on withholdings from flooring revenues.

So that's you're correct, that's an adjustment that we've done in the past to AR and exclude the deferred taxes, which are not right now taxes payable, but more an accounting oh.

Sure thing.

Yeah, and that and that will continue to be the case.

For what looks like the rest of this year at least maybe by the tail end of this year, we might have some minimal taxes payable barring a new investments that are made.

When that starts to change a little bit tight play for them and thereafter.

Yeah, that's a that's the answer for an alpha Oh, sorry, yeah.

Great and then maybe just switching gears, a little bit sandy great to see that you've increased your dividend by 9%.

Shows how strong the company is my.

My question is you know if I work it out correctly your share price has gone up this year as you mentioned I still work it out to about a 1% dividend yield I'm just I forget is there a number that you were trying to get to in terms of dividend yield or what how do you look at.

<unk> increases frequency of increases the dividend and.

And whatnot.

Yeah look your math is about right and.

Maybe just a tick above that but we were due for an increase we've got the cash flow. The cash flow is growing last year, we took more of that and bought back stock that was just ridiculously cheap we might do that again, so we're always going to find the balance in terms of capital allocation between.

Vesting of new growth.

Raising dividends are aggressively in buying back our stock or just just building up the cash buffer to two.

To invest so we bought the strength do any and all of that you know our balance sheet is pristine at the right time, essentially almost zero net debt.

Or a trivial amount of $15 million Canadian yes, we do have to fund that TSA transaction, but plenty of room on our credit facility that we will use disproportionately for the for the foreseeable future that our cash flow to fund transactions. So so yes, no we feel pretty good about it.

The payout ratio had we done nothing would have been.

Amongst the lowest that we've had in our history really.

And we didn't see we didn't think that was fair we want continue to reward shareholders.

And their confidence in us and our dividend is one way to do that.

Right.

One last question.

I saw that in your guidance for 2023 in terms of Geos.

<unk>, the CSA stream since or.

Beginning a retro active to February 1st is that just part of the the contract that you have in place and then number two when it does happen it might go to see like a big.

Like are we going to catch up February .

Also in March so theres going to be a one quarter, where it could be five months worth of geos and revenue coming into that.

It works.

Yes, and yes, so it is.

The silver stream has an effective date of February 1st so as long as the transaction closes, which we're highly confident that well about that that's basically picking towards us.

So whenever the first quarter is that.

But the transaction closes and hopefully that's Q2, they'll basically be five months of production in that in that quarter.

Great. Thanks, again, Sandeep said Friday and team those are all the questions I have.

Thank you.

As a reminder, again, ladies and gentlemen, if you would like to ask a question over the phone. Please press star followed by one.

And at this time, so we have no other phone questions.

Okay, sorry, let me manage this I think there are at least a couple of questions on the webcast I'm, just keeping an eye on that.

The first one.

And I have to read these out I believe so bear with me it's their first time doing this.

Apparently some people just don't like the art of an old fashioned phone call, but what are your stock repurchase plan. So I guess this is kind of falls back into the last question is.

Well as I said, we've we've always tried to we don't have a strict mechanism or formula or equation you follow.

We do track.

All of our options at all times and we decide what the best use of our capital is.

When were looking staring at what our opportunities are in front of us.

So just because we increased our dividend.

This time around doesn't mean, we won't come back to us.

Stock repurchases, we will look at what the market gives us and look a lot of days, even with our recent outperformance a lot of days. The best answer is going to be to get more exposure to mill, Arctic and Mentos and Eagle and windfall in casino and <unk>.

And Hermosa and go down the list. So that's that's just something we we track as a team.

And we try to make the best possible decisions with the information.

In front of us.

So I believe that was the only question on the webcast, but if I'm lying someone please shopping down and I'm happy to.

To be told otherwise.

Thank you Sir we do have another questions on the phone from John Tumazos at Johnson.

John Tumazos very independent research. Please go ahead.

Good morning Sandeep.

Morning, John how are you.

Wow Wow so.

Some of them do.

Different companies are having issues with cost creep. This morning, we saw see bridge found I think for another $150 million royalty.

On top of the $2 25, they sold last year I guess.

It's costing them a little more for their project.

I was chatting with a Quebec exploration companies the other day that shutdown.

Shutdown a camp in Quebec.

The province requires every cap to have a nurse.

And their nurse.

Quit making 225, K newmont paid more than <unk>.

It's getting kind of hard to figure out what costs of doing business are.

Are you.

Yeah.

Staying at your criteria or moving to.

Things are already in production that don't have to build the factory yet or.

What's your best way of managing.

Construction cost timing and uncertainty.

Yeah look John I think there's a it's an excellent question and there's a lot in that.

Is continuing to happen in the sector. It's a.

No.

If there's inflation in the world I have always said that it doesn't it's worse in mining because mining is it's two things it's people intensive and it's in its energy intensive a little bit of relief on the energy side. So far this year, but I don't see that.

Those those people issues are sticky ones, both in terms of availability of people.

Technical talent and also what it takes to retain them. So.

We see that in our in our.

Portfolio in our set of assets Thankfully our partners are doing phenomenal job dealing with a you touched on earlier and where I think they are.

A good phase of dealing with it. So we're fortunate that our assets are maybe starting with our existing portfolio. We're fortunate that our assets are so important to our partners. When you go down the list they genuinely matter.

So we're seeing a lot of investment time, and energy and money into those assets to resolve those issues. So it would be or they are issues, but we trust our partners or some of the best in class and we trust their motivations because they're so important to them.

That they will resolve them, obviously theres costs associated with that but they have to deal with but the assets are good enough that they can they can withstand it.

As we look out.

From here I'd say, a couple of things to your question. One is all of that does to me as a person who tries to simplify things is it justifies elevated commodity prices for some time.

That's that's good for us in our existing portfolio in terms of pushing forward assets our partners as well have always shown an ability to raise capital better than I'd say the aggregate.

<unk> market and so our assets are being fed with the money they need to move forward, it's not always a straight line and it's not always as quickly as you'd like but I think if you look at our portfolio.

It's it's better set up that way than than most so so good news there and yeah as we look out.

We always manage what we consider a timeline risks those are our risks and the royalty sector. When there was extra costs, we don't suffer at least not immediately were directly but the delays we do we do suffer from.

So, yes that that doesn't hasn't changed our view John we've been pretty steadfast in the last few years that.

Yes, we will take on and you've seen us take on some later stage assets when the returns and the asset quality is high there's good assets. There is good room in our portfolio for an asset at any stage, but are our larger dollars would be would be kept for either production or near term or line of sight.

Two to production so that hopefully you are on the other side of that you never always on the other you never fully on the other side of that mechanism, but or that dynamic, but that be I guess the.

The first level answer to your question Don.

I apologize sandeep, if I'm repetitive.

A long winded CEO call me.

And I Couldnt hang up and I missed the first part of your call.

Give an update on the animals SAR project in Armenia Alright.

Alright, Thank you retain a 40% ownership stake in addition to the stream.

And is it too much for the shareholders to homes.

You get paid something for that 40% in the stock of the new owner or incremental royalty or cash or how do you think that's going to settle out.

It's not a it's not ground we covered John so happy to know we didn't didn't get into it with respect to our malls are I would say as I've said before we worked diligently behind the scenes to.

And the last piece that is missing in the last two plus years.

There's been a unfettered access to the sites we.

We've seen new Asian development Bank step in with a big check we've seen the blessing of the government. We've seen all of the things that we need to get real excited about that asset which is important to us save a b. The last piece, which is an operator in the last in the funding to take a project that's circa 70% built completed and end up with a plus 200.

Between 200 and center 50000 ounce of your mind on the other side.

So we work on that path.

It's.

Obviously, $2000 gold and all of the other positive.

Developments that I mentioned are helping that until it's done it's not done, but we continue to work on it.

And it's an important derisking event, one that you know, it's one of those things that used to say it.

It is a light switch that's off that we are very intent on turning back on with respect to your specific question about the equity.

You know our primary objective is to see that scream reactivated whether the equity has value on top of that.

Time will tell that the beauty of Optionality in the gold sector.

And with prices moving the way they are we're not going to close that door, but first and foremost I'd say, it's fair to say that we're after value on the stream, which is why it was protected and that receiver ship processed in the first place.

Beyond that time time will tell.

Thank you and congratulations.

Thank you John .

Thank you and at this time Mr. <unk>, we have no other questions. Please proceed.

Okay, and I'm figuring out my technology and I can tell that there are no other questions on the webcast either so thanks, everyone for your time this morning and.

Maybe as a cold.

Public service announcement, just a reminder, that the Sunday is mother's day and that is someone who has disappointed both their mother and their wife in past years I plan on trying to break that streak. So hopefully hopefully you're successful in doing the same so thanks again and be well.

Thank you Sir.

Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.

[music].