Q1 2024 Osisko Gold Royalties Ltd Earnings Call
Operator: Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q1 2024 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 on your telephone keypad. Please note that this call is being recorded today, May 9, 2024, at 10 a.m. Eastern Time. Today on the call, we have Mr. Jason Attew, President and Chief Executive Officer, Mr. Fredric Ruel, Chief Financial Officer, and Vice President of Finance.
Good morning, ladies and gentlemen, and welcome to the Cisco Gold royalties Q1, 'twenty 'twenty four results conference call after.
Operator: After the presentation, we will conduct a question and answer session.
Operator: If you would like to ask a question. Please press star followed by the one on your telephone keypad.
Operator: Please note that this call is being recorded today may nine 2024 at 10 am eastern time.
Speaker Change: Today on the call. We have made we have Mr. Jason <unk>, President and Chief Executive Officer, Mr. Fidel at crew, Chief Financial Officer, and Vice President Finance, Heather Taylor, Vice President of sustainability, and communications and Mr. Ian Farmer, Vice President corporate development I would now like to turn to me.
Jason Attew: Meeting over to our host for today's call Mr. Jason It too well.
Operator: Heather Taylor, Vice President, Sustainability and Communications, and Mr. Ian Farmer, Vice President, Corporate Development. I would now like to turn the meeting over to our host for today's call, Mr. Jason Attew. Bonjour Mesdames et Messieurs, and welcome to the results conference of the first trimestre of the year 2024 of Redevrance Horifiar Osiske Limited. After the presentation, we will proceed to a Q&A session. If you would like to ask a question, please press the star button, followed by 1.
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Operator: Please note that this call is being recorded today, May 9, from 8 to 10 p.m. We have on the line today Mr. Jason Attew, President and Director, Mr. Fredric Ruel, Director of Finance and Vice-President of Finance, Mr. Ian Farmer, Vice-President of Corporate Development, and Heather Taylor, Vice-President of Sustainable Development and Communication. I would now like to give the floor to your host, Mr.
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Jason Attew: Good morning, everybody. And thanks for being on today's call. I'm Jason Attew, President and CEO of Osisko Gold Roya. Procedurally, I, along with Heather Taylor, will run you through the presentation, and then we'll subsequently open up the line for questions. For those participating online via the webcast, you can submit your questions in advance through the webcast platform.
Jason Attew: Good morning, everybody and thanks for being with us.
Jason Attew: Jason Matthews, President and CEO.
Jason Attew: Yes.
Jason Attew: Procedurally I along with Heather Taylor.
Jason Attew: Orientation.
Speaker Change: We open up the line.
Jason Attew: For those participating online via the webcast you can submit your question.
Jason Attew: For the webcast.
Operator: Dave's presentation will also be available and downloadable online through our corporate website. Please note that there are four forward-looking statements in this presentation from which actual results may differ. Also, please note the basis of the presentation will be Canadian dollars unless otherwise noted. I'm joined on the call this morning by Frederick Ruel, the company VP of Finance and Chief Financial Officer, and Heather Taylor, Vice President of Sustainability Communications. Amongst the others, as indicated on slide three. Slide four.
Jason Attew: Today's presentation will also be available for download.
Operator: Online.
Operator: Please note.
Operator: Forward looking statements in this presentation actual results may differ.
Operator: Also please note the basis of presentation Canadian dollars.
Operator: Right.
Operator: I'm joined on the call. This morning by record companies, VP Finance and Chief Financial Officer.
Operator: Vicepresident sustainability communication.
Operator: The others as indicated on slide three.
Jason Attew: When looking at Osisko's first three months of 2024, we are off to a predictable start as it relates to gold equivalent ounces earned, cash margin, cash flows, as well as overall net reduction. Cisco earned $22,259 in the first quarter of 2024, which puts us on track to achieve our previously published full year 2024 guidance of between $82,000 and $92,000 in gold equivalent output. Revenues for the period were strong in Q1, at $60.8 million.
Operator: Slide four we're looking at a physical at the first three months of 2024, we're off to a predictable start as it relates to gold equivalent ounces earned cash margin cash flows as well as overall debt reduction.
Jason Attew: So our 23200 <unk>.
Jason Attew: In the first quarter of 'twenty.
Jason Attew: Which puts us on track with our previously published full year 2020 guidance.
Jason Attew: Tween 80090 thousand.
Jason Attew: Revenues for the very good strong Q1 at $60 8 million.
Jason Attew: Even though gold and silver prices in Q1 were robust, with average realized prices of U.S. 2073 and U.S. 2378, respectively, the Precious Metals Complex only saw a real appreciation after our last sale concluded for the quarter.
Jason Attew: Even though gold and silver prices.
Jason Attew: All the above average realized prices of U S.
Jason Attew: 2073, and you have 23 78, respectively, the precious metals called but all he thought we have appreciation after her lifestyle.
Jason Attew: Sure.
Jason Attew: In other words, today's bought gold price is approximately $250 higher than a realized price over Q1. In addition, CISA's cash margin was 97% in the quarter. This is just shy of the company's record quarterly cash margin of 98% in the third quarter of 2017. Tesco ended the first quarter.
Jason Attew: Another word today's spot gold price.
Jason Attew: Ultimately.
Jason Attew: $50 higher than our realized price over Q1.
Jason Attew: In addition, if there's cash margin from 97% in the quarter.
Jason Attew: It was just shy of the company's record quarterly cash margin of 98% in third quarter.
Jason Attew: Pete.
Jason Attew: Cisco ended the first quarter.
Jason Attew: $70.6 million in cash and net debt of just over $8 million after the company continued to pay down its revolving credit facility during the period. So far in Q2, the company has repaid an additional $18.6 million on the facility, further increasing our financial flexibility in order to be able to transact new accretive opportunities as they present themselves. With respect to our ongoing commitment to return capital to shareholders, the company declared and paid a quarterly dividend of $0.06 per share in Q1, marking its 36th consecutive dividend with over $279 million in return to shareholders to date from each distribution.
Jason Attew: With 76 million in cash and net debt of just over 8 million. The company continued to pay down its revolving credit facility.
Jason Attew: Right.
Jason Attew: So far in Q2, the company has repaid an additional $8 6 million.
Jason Attew: Further increasing our financial flexibility in order to be able to transact in new accretive opportunities as they present themselves.
Jason Attew: With respect to the ongoing commitment to return capital to shareholders. The company declared and paid a quarterly dividend per.
Jason Attew: Per share Q1, marking our 36th consecutive dividend.
Jason Attew: 279 million returned to shareholders to date from these distributions.
Jason Attew: Subsequent to the quarter, the Osisko Board of Directors approved an 8% increase to the base quarterly dividend of $0.065 per common share payable on July 15, 2024 to shareholders of record as at the close of business on June 28, 2020.
Jason Attew: Subsequent to the quarter.
Jason Attew: The board of directors approved an 8% increase to the base quarterly dividend six and a half cents per common share payable on July 15, 2024th to shareholders of record as of close.
Jason Attew: As the visit on day 28.
Jason Attew: Okay.
Jason Attew: This is a testament to the tremendous confidence we have in the consistency and the predictability of the cash flows underpinning our business. With respect to our opportunity set, the company's pipeline continues to remain robust, with our corporate development teams busier than they have ever been. We remain optimistic that we'll get at least one, or possibly two, meaningful transactions across the line there. Finally, as some of you know, on April 10th, Osisko published its 4th edition of its sustainability report, Growing Responsibly. And I'd like to bring in Heather Taylor to talk about this key achievement in more detail. Heather?
Jason Attew: This is a testament to the tremendous confidence we have consistency and predictability of cash flow underpinning our business.
Heather Taylor: With respect to our opportunity set.
Heather Taylor: The pipeline continues to ramp up blah blah blah.
Heather Taylor: With our corporate development team busier than ever.
Heather Taylor: We remain optimistic that we'll get at least one possibly two meaningful transactions the crop this year.
Heather Taylor: Finally, some of you know on April.
Heather Taylor: Cisco published its fourth edition.
Heather Taylor: He's already report growing responsibly.
Heather Taylor: And I'd like to bring on other theater, they talk about the key achievements in more detail.
Heather Taylor: Thanks, Jason, and thank you to everyone who's taken the time to join us today. Subsequent to the quarter, we published the fourth edition of our sustainability report, Growing Responsibly, guided by the highest standards set by GRI, FASB, and IFRS for climate-related disclosures. This publication marks another year of substantial progress made with respect to our governance, environmental, and social initiatives. I invite you to explore our achievements in greater detail in the report, which is posted on our website.
Heather Taylor: Thanks, Jason and thanks to everyone who's taken the time to join us today.
Heather Taylor: Subsequent to the quarter, we publish the fourth edition of our sustainability report growing responsibly as Jason mentioned, it's guided by the highest standards set by D. R. I Sadly I F. Our climate related disclosure.
Heather Taylor: This publication marks another year of substantial.
Heather Taylor: The progress made with respect to our governance, environmental and social initiatives and.
Heather Taylor: Like it's like floor, our achievements in greater detail in the report which is posted on our website.
Heather Taylor: Starting with governance, this past year has seen Osisko make significant strides. We've enhanced the leadership of our board by appointing an independent chairperson, reinforcing our commitment to robust oversight and accountability. We've also maintained our commitment to diversity, with women continuing to make up over 30% of our board members.
Heather Taylor: Starting with governance.
Heather Taylor: Past year has seen I was just going to make significant strides we've enhanced the leadership of our board by appointing an independent chair.
Heather Taylor: And forcing our commitment to robust oversight and accountability.
Heather Taylor: Also maintained our commitment to diversity with women and anyway, you can make up over 30% of our board members.
Heather Taylor: The integration of my now-not-so-new role as Vice President of Sustainability and Communications ensures that we have a dedicated individual focusing on our ESG initiatives and continuing to drive these forward. On the environmental side, supporting Osisko's mandate to align capital allocations with ESG principles, we formalized our investment due diligence process by developing an ESG screening and monitoring tool. The tool is aligned with industry-leading practices and allows us to assess the ESG performance of potential assets and mining partners across multiple topics prior to investing and subsequent monitoring post-capital deployment.
Heather Taylor: Integration of mind now not totally wrong as vice president of sustainability and he sent in.
Heather Taylor: Sure and then we have a dedicated individual focusing on our ESG initiatives and continuing to drive these forward.
Heather Taylor: On the environmental side. The party has discussed a mandate to align capital allocation, yes, you'd principles, we formalized our investment due diligence process by developing an ESG screening and monitoring tool.
Heather Taylor: One was in line with industry, leading practices and allowed us to us that yes, the performance at <unk>.
Heather Taylor: So has that been mining partners across multiple topics prior to investing and subsequent monitoring post capital deployment.
Heather Taylor: In our commitment to address climate-related challenges, we conducted scenario analysis to gauge the exposure of key assets to climate-related risks and opportunities. This analysis helps inform the development of an inaugural climate change strategy for the 2024 to 2027 timeframe.
Heather Taylor: And our commitment to address climate related challenges, we conducted scenario analysis to gain exposure to climate related risks and opportunities.
Heather Taylor: This analysis to help inform the development of an inaugural climate change strategy or the 'twenty 'twenty four 'twenty 'twenty seven timeframe.
Heather Taylor: We have also enhanced our transparency in reporting spoke three emissions and have entirely offset the company's 2023 office-based emissions with the purchase of high quality carbon credits. Lastly, on the social front, we have deepened our commitment to our employees and the communities we impact. We implemented comprehensive training focused on diversity, equity, and inclusion, health and safety, and human rights. Additionally, our teams have actively participated in volunteering events that support and uplift our local community.
Heather Taylor: We also enhanced our transparency in our reporting scope three M. S N and haven't entirely offset the company's 2023 office based in Michigan with the purchase of high quality carbon credit.
Heather Taylor: Lastly on the social front, we have deepened our commitment to our employees and the communities we impact.
Heather Taylor: Implemented comprehensive training focus on diversity equity and inclusion health and safety and human right.
Heather Taylor: Additionally, our teams are actively participated in answering event that supports an uplift our local community.
Heather Taylor: We deployed over $325,000 towards community donations aligned with our newly formalized Community Investment Guidelines. Our efforts have been recognized externally, with Osisko receiving an AA rating from MSCI and high rankings from Sustainalytics, including top-rated regional and industry badges. These achievements should be immensely proud of. These accomplishments reflect our strong performance relative to precious metal peers and underscore our dedication to leading ESG practices. As we look to the future, our commitment remains firm.
Heather Taylor: We deployed over $325000 toward community donations aligned with our newly formalized community investment guidelines.
Heather Taylor: Our efforts have been recognized externally with US just go receiving a double AA rating from MSCI and high ranking it sounds with analytics, including top rated regional and industry badges.
Heather Taylor: These achievements, we should be immensely proud at.
Heather Taylor: He has accomplished accomplishments reflect our strong performance relative to the precious metals here that underscore our dedication to leading ESG practices.
Heather Taylor: As we looked at our future our commitment remains firm we.
Heather Taylor: We will continue to integrate ESG principles across the organization and into our corporate strategy, ensuring that our actions benefit not only our shareholders but also the broader communities and environments in which we conduct business. With that, I'll pass it back to Jason. Thanks, Kevin.
Heather Taylor: We will continue to integrate ESG principles across the organization and into our corporate strategy, ensuring that our accident benefit not only our shareholders, but also the broader community and environment in which we conduct business.
Heather Taylor: With that I'll pass it back to Jason.
Jason Attew: Thanks, Heather. The mail pivot for the company's financial performance for Q1. Quarterly revenues effectively track higher year-over-year commodity prices when compared to Q1 2023, which was also partially offset by less gold equivalent ounces versus the same period last year. The decrease in Q1 2024 is due to the stoppage of operations at the Lennard Diamond Mine at the end of 2023. Net earnings of $0.08 per basic common share for the period represent a modest decline versus the first quarter of 2023. However, this delta largely reflects a non-cash share of loss on associates, more specifically of fiscal development, and to a lesser extent, a modest non-cash foreign exchange loss during the period.
Jason Attew: Thanks, Kevin.
Jason Attew: As for the company's financial performance for Q1.
Speaker Change: What are your quarterly revenues effectively tracking higher year over year commodity prices.
Jason Attew: Parents keep on 2023, which was also partially offset by less gold equivalent ounces versus the same period last year.
Jason Attew: In Q1, 2020 or stoppage of operations, our diamond at the end of 2023.
Jason Attew: Net earnings of eight.
Jason Attew: It's a common share for the period, representing a modest decline versus the first quarter of 2023.
Jason Attew: With the Delta largely noncash.
Jason Attew: Noncash share of loss of associates, or specifically for development and to a lesser extent modest noncash foreign exchange loss during the period.
Jason Attew: Most importantly, though, Q1 2024. So a year-over-year improvement in both cash flow per share, as well as quarterly adjusted earnings of $0.16 per basic common share, during the first quarter of 2024. This company has 19 production apps.
Speaker Change: Most importantly, though Q1 2024.
Jason Attew: The year over year.
Jason Attew: Cash flow per share quarterly adjusted earnings of 16.
Jason Attew: Sure.
Jason Attew: During the first quarter of 2024.
Jason Attew: The company had 19 producing asset.
Jason Attew: Our GOs earned come predominantly from Canada, and we derive over 95% of our gold equivalent ounces from precious metals, gold just under 71% and silver at 25%, with the remainder coming from other metals. As I noted previously, with the recent shutdown of Menard, diamonds will no longer be contributed to Osisko's GEOs firms going forward, putting the company in a position to effectively be 100% precious metal until some of the company's base metal exposure begins to expand, with the first materiel contributions coming from the CSA conference, for the effective date of the accomplished dreams of June 15th of this year.
Speaker Change: Our deal with earn come predominantly from Canada, right over 95% of our gold equivalent ounces of precious metal.
Jason Attew: Oh, just under 71% and silver at 25%.
Jason Attew: They're coming from other metals.
Jason Attew: As I noted previously the recent shutdown of Bernard.
Jason Attew: Women can no longer be contributed to the Cisco deal.
Jason Attew: Going forward.
Jason Attew: The company is positioned to effectively 100% precious metal.
Jason Attew: Some of the companies based on all of those will begin.
Jason Attew: And to expand with the FERC material contribution coming from the CSA copper stream or the effective date of the copper stream.
Jason Attew: I think that this year.
Jason Attew: Some comments on specific my performances during the quarter before speaking about a couple of more material assets in greater detail. The Canadian malarkey had yet another impressive start to the year, with Ignico booking record quarterly production from the mine. The actor remains Osisko's most important contributor to the GEOs earnings by a solid, solid margin.
Jason Attew: Some comments on specific micro formats during the quarter for speaking out.
Jason Attew: Speaking about a couple of orbit gilead material assets in greater detail.
Jason Attew: The Canadian mill architect yet another impressive start to the year Nico booking record quarterly production for like.
Speaker Change: Yeah, that's it for me.
Jason Attew: The most important contributor.
Speaker Change: Good deal.
Jason Attew: Solid margin.
Jason Attew: Performance from Victoria Ruel's Eagle Mind during the first quarter of 2024 fell somewhat short of our budgeted expectations. Victoria noted, however, that gold production in Q1 2024 would be lower year over year due to lower grades related to mine sequencing of the Eagle IV body. Timing and Placing Stack Tums Under Leach and Lower Planned Stacking Rates in Q4 2023. Despite the slower start, the company still expects to achieve 2024 gold production guidance of 165,000 to 185,000 ounces. The summer and fall seasons are typically the month's strongest operating period.
Jason Attew: Performance on Victoria, Victoria Gold Eagle mine during the first quarter of 2024, I'm not sure everybody's expectations.
Jason Attew: Korea noted however, the gold production in Q1 2020 for lower year over year lower grades related to the mine sequencing the eagle ore body.
Jason Attew: In fact under Leach and lower planned stacking rates in Q4 2023.
Jason Attew: The slower to start the company still expects to achieve 2020 for gold production guidance of 165 to 185000.
Jason Attew: The summer and fall season, typically being the strongest operating periods.
Jason Attew: Performance from Capstone's Mantos-Blancos operation, where milling rates continue to lag based on expansion design levels, was effectively flat versus the prior period in Q4 2023. Osisko will continue to monitor MacArthur's performance through 2024. We remain optimistic that Capstone continues to point to a mid-2024 resolution of the plant issues, all the way to delivery in June 2024. Installation of New Pumping Infrastructure Related to Fine-Tailing and Water Management
Jason Attew: Performance from Capstone mental Blancos operation, we're milling rates continued to lag.
Jason Attew: Patrick I level, it was effectively flat versus the prior period.
Jason Attew: For 2023.
Jason Attew: So we'll continue to monitor for mattresses performance through 2024, we remain optimistic that capstone continues to point.
Jason Attew: Through mid 2024 resolution.
Jason Attew: The plant issues following.
Jason Attew: The delivery in June 2024.
Jason Attew: Elation of new pumping infrastructure related to the final tailings and water management.
Jason Attew: If things go well from there, if Capstone is able to consistently achieve its mainframe throughput capacity of 20,000 tons per day, then Osisko will reap the benefits of this achievement in its 2025 year, with Mantos Blanco representing the biggest driver of Osisko's step change in gold equivalent ounce growth in 2025 versus 2024. As I mentioned earlier, the number of currently producing assets in our portfolio stands at 90. We anticipate this number to increase by two production assets in the second half, as we discussed both the Landini and Tocantino projects to be pouring gold before the end of the year, in addition to the start of the CSA conference. Moving to the next slide.
Jason Attew: If things go well from their capstone is able to consistently achieve nameplate throughput.
Jason Attew: 20000 tests per day.
Jason Attew: We will reap the benefits of this achievement and a 2025 years.
Jason Attew: <unk> blancos, representing the biggest driver.
Jason Attew: <unk>.
Jason Attew: Gold equivalent ounce growth in 2025 versus 2024.
Jason Attew: As I mentioned earlier.
Jason Attew: We're currently producing assets in our portfolio stands at 90.
Jason Attew: We anticipate that Robert increased by two production.
Jason Attew: Second half.
Jason Attew: We expect both net new.
Jason Attew: Nino projects to be pouring gold before the end of the year.
Jason Attew: In addition to the TSA copper stream.
Jason Attew: While we've spoken to this slide an innumerable number of times, I think it remains as relevant today as ever, and their company continues to distinguish itself from the rest of its relevant peers and subjects, as it relates to geotextile exposure. Osisko is the leader when it comes to both net acid value and gold equivalent ounces earned from what Osisko defines as Tier 1 mining jurisdictions, which include Canada, the United States, and Australia Of note is that if we were to add Chile to that list of countries, it would be by over 95%.
Jason Attew: Moving to the next slide while we have spoken to this slide and the numerous number of time.
Jason Attew: I think it remains as relevant today as ever.
Jason Attew: As our company continues to distinguish itself from the rest of its relevant peer group sub sector.
Jason Attew: The jurisdictional exposure.
Jason Attew: Fiscal <unk> is the leader when it comes to build net asset value in gold equivalent ounces earned.
Jason Attew: But what Cisco define tier one mining jurisdiction.
Jason Attew: Which includes Canada, the United States and Australia.
Jason Attew: Of note is that if we were to actually do that.
Jason Attew: Sorry.
Jason Attew: Over.
Jason Attew: 95%.
Jason Attew: In terms of Canadian malarkey, the mine realized record quarterly gold production driven by higher tonnage and gold rates thanks to contributions from the Odyssey Underground. More specifically, ramp development continues to exceed target, reaching the first production levels at East Gould Beach in February 2024 and at a depth of 765 meters at the end of March. Chaff sinking improved during the quarter with an average sinking rate of 2.4 m per day.
Jason Attew: In terms of Canadian Malarchuk, the mine realized record the mine realized record quarterly gold production driven by higher tonnage and gold grade thanks to contributions from the Odyssey underground.
Jason Attew: More specifically ramp development continued to exceed target, reaching the FERC production level equal in February 2024.
Jason Attew: And at a depth of 765 meters at the end of March.
Jason Attew: I was thinking improved during the quarter with an average thinking right at two four meters per day.
Jason Attew: The Temporary Loading Pockets previously planned at Level 102 will now be built at Level 64, which is expected to provide hoisting capacity by mid-2025, six months earlier than previously planned and will provide added development and protection for. We were obviously also delighted to hear our operating partner continue to make reference to plans around a potential second shaft for the Odyssey Underground, story to stay tuned. We'll do the next slide on CSA.
Jason Attew: The temporary loading pocket previously planned at level, one or two will now be built.
Jason Attew: Sure.
Jason Attew: As expected to provide hoisting capacity by mid 2025.
Jason Attew: Six months earlier than previously planned, but won't provide out of development and production flexibility.
Jason Attew: You were obviously also delighted to hear.
Jason Attew: Operating partner continues to make reference to plan around a potential second shaft Odyssey undergrad.
Jason Attew: Sorry to stay tuned.
Jason Attew: The next slide on CSA.
Jason Attew: Just a few weeks ago, our offering partners at Metals Acquisition Corps announced an updated mineral reserve and resource savings based on drilling completed at CSA only up to the end of August 2023. Highlights included a 57% increase in my life to 11 years.
Jason Attew: Just a few weeks ago, our operating partners and metals acquisition quarter announced an updated mineral reserve and resource statements based on drilling.
Jason Attew: <unk> CFA only up to the end of August 2023.
Jason Attew: This included 67% increase in mine life of 11 years.
Jason Attew: In other words, to the end of 2034, based on mineral reserves only, compared to a six-year reserve mine life outlined previously. The updated mineral reserve only extends 95 vertically 95 meters vertically below the current decline, and Metals Acquisition Corp. has continued to drill beyond the August 2023 cutoff. So we clearly expect that there is more to come from this team in the relatively near term. Recall that the TSA copper mine has been producing for almost 60 years with very limited exploration away from the known deposits, and there is clear potential to further optimize metal acquisition for April 2024 life of mine production. Exploration in the top 850 meters of the cauldron is just starting.
Jason Attew: In other words for the end of 2034 based on mineral reserves only compared to a six year reserve mine life outlined previously.
Jason Attew: Updated mineral.
Jason Attew: Only extends 95 vertical 95 meters vertically below the current deepwater position.
Jason Attew: <unk> acquisition costs continue to go well beyond August 2023 cutoff date.
Jason Attew: We expect that there is more to come from this team.
Jason Attew: And relative near term.
Jason Attew: Recall that she got the copper line had been producing for almost 60 years with very limited exploration away from the known deposits and there are clear potential to further optimize metal acquisition Corp. By April 2020 for life of mine production plan.
Jason Attew: Exploration in the top 850 meters as they call. It is just starting the initial results highlight strong potential to open additional mining fronts.
Jason Attew: The initial results highlight strong potential to open additional mining projects. Moving to the next slide, Ion Mugino, in late March 2024, Alamo announced a friendly acquisition of Argonaut Gold and its Maginot Gold mine and mill located immediately adjacent to Island Gold. This transaction is expected to close in Q3 2024. The previously planned phase 3 mill expansion construction work at Island will no longer be required following the announced acquisition of the 10,000 ton per day Maginot Mill, which is located approximately two kilometers from the Island Gold shaft.
Speaker Change: Moving to the next slide I am Mizuno and late March 2020 for Alamos announced frankly acquisition are going out coal.
Jason Attew: And if the Geno gold mine and mill located immediately adjacent to I don't go.
Jason Attew: Transaction is expected to close in Q3 2024.
Jason Attew: <unk> for the planned phase III no expansion construction work at island will no longer be required following the announced acquisition. The 10000 ton per day Medina Mill, which is located approximately two kilometers from the island gold Shana.
Jason Attew: The larger mill and tailings infrastructure at Majuno will now accommodate the rapidly growing mineral reserves and resource base at Island Gold. The expanded and accelerated mine plan is also anticipated to transition a greater proportion of production toward the 2% and 3% NSR royalty boundaries earlier in the mine plan, as opposed to the mineral inventory covered by ASSIST's 1.38% NFL ROE. In addition, a small fraction of the eastern limit of the Maginot Pit is covered by a 3% NSRO, with production expected later this decade. The underground exploration potential previously highlighted by Argonite Gold on this claim is located less than 300 meters from the existing Island Gold underground infrastructure.
Jason Attew: The larger mills and tailings infrastructure amid Gino will now accommodate rapidly growing.
Jason Attew: And look resource base at island gold.
Jason Attew: <unk>.
Jason Attew: The expanded and accelerated might've learned also anticipated transition a greater proportion of production toward the six 2% and 3% MSR royalty boundaries earlier in the mine plan as opposed to the mineral inventory covered by it this is 138% NFL royalty.
Jason Attew: In addition, a small fraction of the eastern limits within the genome kit is covered by a 3% royalty with production expected later this decade.
Jason Attew: The underground exploration potential previously might've highlighted by organic old others claim is located less than 300 meters from the existing island gold underground infrastructure.
Jason Attew: Moving to our guidance and growth. After the first quarters, as previously noted, the company remains on solid footing with respect to being able to achieve its previously published 2024 Geo Delivery Guidelines, especially with three material contributors expected to deliver new gold equivalent ounces to Osisko in the second half of 2024, being the CSA Copper Stream, Tocantinzino, and Nandini. While this year's guidance number was always going to represent a modest step down versus last year's, it is worth reminding everyone that with Bernard no longer in the picture, cash margins have increased.
Jason Attew: Moving to our guidance and growth.
Jason Attew: And given the write-downs that have already taken place in the asset, tax schools have been created, so Osisko is not expecting to be taxable in Canada for 2024. Unsurprisingly, at this point in time, the company's five-year outlook for the 2028 publication mid-February remains unchanged.
Jason Attew: After the first quarter.
Jason Attew: And as previously noted the company remained.
Jason Attew: With respect to being able to achieve the previously published 2024 deal delivery guidance.
Jason Attew: Especially with pre material contributor is expected to deliver new gold equivalent ounces with Cisco in the second half of 2024 being CSA copper stream.
Jason Attew: And then Mimi.
Jason Attew: While this year's guidance never was always garner revenue, representing a modest step down versus last years. It is worth reminding everyone. We are no longer with Bernard no longer in the picture cash margins have increased.
Jason Attew: Given the write down have already taken place and the asset tactical up and being created.
Jason Attew: I'm not expecting to be cash tax taxable in Canada for 2024.
Jason Attew: Unsurprisingly at this point in time, the company's five year outlook for 2028 published in mid February remains unchanged.
Jason Attew: As we remain very confident that both the expansion and our development assets will fuel the 35% peer-leading growth with no continued capital or any capital calls required. Moving to our catalyst slide. Underpinning this updated growth profile is a long list of near-term catalysts that we provided on slides 14 and 15. We've already discussed many of these on previous slides in this presentation, so no need for me to add anything further here today.
Jason Attew: We remain very confident that both the expansion and our development assets will yield a 35% pure leading growth with no contingent capital or any capital required.
Jason Attew: Moving to our catalyst slide.
Jason Attew: Underpinning the updated growth profile is a long list of near term catalysts.
Jason Attew: We've provided on slide 14 and 15.
Jason Attew: Already discussed many of these already on previous slides from this presentation. So no need for me to add anything further today.
Jason Attew: That said, I would still suggest you take the time to go through this impressive list yourself. And if you have any questions or would like to discuss further any of the remaining light items highlighted on these two pages, I encourage you to reach out to my colleagues here at Osisko for more information. Turning to the ballot sheet.
Jason Attew: That said I would still suggest you take the time to go.
Jason Attew: Impressive lift yourself and if you have any questions or would like to discuss further any of the remaining light items highlighted on these two pages I encourage you to reach out to my colleagues here at <unk> for more information.
Jason Attew: Turning to the balance sheet.
Jason Attew: Well, finally, we'll end the formal part of the presentation on slide 16, which outlines the current state of the Osisko Salish. At quarter end, we had a total death of just over 150 million, a net death of only approximately 80 million. As we've stated previously, Covenant performance was exceptionally strong with a 97% cash margin experience in the first quarter of 2024, expected to continue throughout the year. As noted previously on this call and noted as a subsequent event in our MD&A, we've now also repaid an additional $18.6 million against our revolver credit facility, further strengthening our financial position, which, by the way, extended the facility for another four years.
Jason Attew: Well finally, we will end the formal part of the presentation on slide 16, which outlines the current state of the fiscal balance sheet.
Jason Attew: Quarter end, we had total debt of just over $150 million and net debt of only approximately $80 million.
Jason Attew: As we stated previously our covenant performance was exceptionally strong with a 97% cash margin experienced in the first quarter of 2024 expected to continue throughout the year.
Jason Attew: As noted previously on this call and noted as a subsequent event in our MD&A. We've now also repaid an additional $18 $6 million against our revolver credit facility further strengthening our financial position.
Jason Attew: Which by the way break extended the facility for another four years.
Jason Attew: In addition, if commodity prices, specifically gold and silver, sit above U.S. 2300 and U.S. 27, respectively, 25 respectively, we forecast to end up in a net cash position at the beginning of the fourth quarter of 2024. No significant deals are closed by that time. This is important as Osisko doesn't expect its internet plan to be completed in 2024. And our much-improved balance sheet provides the company with the financial capacity and flexibility to continue its strategy of disciplined allocation in the pursuit of high-quality, accretive precious metal streams and royalties that will bolster the company's current and near-term geo-deliveries and cash flow that should accrue to our shareholders' benefit.
Jason Attew: In addition, if commodity prices.
Jason Attew: <unk> gold and silver sit above U S 2300, and U S 27, respectively.
Jason Attew: Sorry, 25, respectively, we forecast to end up in a net cash position at the beginning of the fourth quarter 2024, no significant deal or close by that time.
Jason Attew: This is important as a Cisco doesn't expect it there.
Jason Attew: Great.
Jason Attew: And our much improved balance sheet provides the company with the financial capacity and flexibility to continue its strategy of disciplined allocation in the pursuit of high quality accretive precious metal streams and royalties.
Jason Attew: Will bolster the company's current near term geo deliveries and cash flow that should accrue to our shareholders' benefit.
Jason Attew: And with that, I'd like to thank everyone for listening today. You'll now open up the line for questions as well as questions posted on the webcast. If we don't get to all the questions on the line, we will make sure to respond offline to those that we don't cover on this webcast.
Speaker Change: And with that I'd like to thank everyone for listening today, we'll now open up the line for questions as well as questions focused on the webcast. If we don't get to all the questions on the line, we will make sure to respond offline.
Jason Attew: Don't cover all that.
Jason Attew: Operator.
Operator: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the number on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any. Your first question comes from Ralph Profiti with... 8 Capital. Your line is now open.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone.
Operator: To hear a problem that you have that your hand has been raised should you wish to decline from the political process. Please press star followed by the Q.
Operator: If you are using a speaker phone please lift the handset before pressing any piece.
Ralph Profiti: Your first question comes from Ralph <unk> with.
Ralph Profiti: Eight capital your line is now open.
Ralph Profiti: Thanks, Operator. Good morning. Jason, thanks for taking my question. Two of them, please. Firstly, the degree to which you can, you know, without giving away too much, you mentioned one to two transactions that you hope to be able to close this year. Can we get sort of a broad range of the sizes of those you're looking at? And maybe more importantly, whether or not these are sort of competitive processes, or are you leveraging existing or new relationships where we would consider these opportunities more exclusive?
Operator: Okay.
Ralph Profiti: Thanks, operator, good morning.
Ralph Profiti: Jason Thanks for taking my question I had two of them. Please firstly the degree to which you can you know without giving away too much you mentioned one to two transactions.
Ralph Profiti: Hopefully be able to close this year.
Ralph Profiti: You know can we get sort of a broad range of the sizes of that youre looking at and maybe more importantly, whether or not these are sort of competitive processes or are you leveraging existing or new relationships, where we would consider these opportunities are more exclusive.
Jason Attew: Thank you, Ralph. A very good question. And obviously, we'd love to give you more information on the opportunities that we have. But obviously, there's a lot of confidentiality associated with it. With respect to the opportunity set and the size of the ticket or the size of the transaction, again, it varies, obviously, due to the transactions that we're looking at, whether it's royalties or streams as well. There's not a lot of detail that I can give you.
Speaker Change: Great. Thank you very good question and obviously, we'd love to give you more information on the opportunities.
Jason Attew: Talking to deepwater competencies associated.
Jason Attew: With respect to the opportunity set and the size of the ticket or the size of the transaction again it varies obviously.
Jason Attew: The transactions that we're looking at whether its royalty is extremely well it certainly varies in terms of the transactions, there's not a lot of detail, but I can give you however, what.
Jason Attew: However, what I would say is, again, the team is very, very much focused and has the team very focused on a smaller number of high-convection bets that, again, we're hopeful that we can get one or two transactions announced by the end of the year. And transaction size, you can think of anywhere between 50 million up to $300 billion US. That's what we're essentially looking at.
Jason Attew: I would say is again the team is very very very much focused in.
Jason Attew: I have the team very focused on.
Jason Attew: A smaller number of high conviction that that.
Jason Attew: Again, we are hopeful that we can get one or two transactions.
Jason Attew: But by the end of the year and transaction by you can think of anywhere between $50 million up to $300 million U S.
Jason Attew: We're essentially looking at them in terms of the competition. It is still a very very competitive process competitive environment. Because I think you can appreciate we've got a lot of peers as well as private equity groups that participate in that.
Jason Attew: In terms of the competition, it is still a very, very competitive process, competitive and environmentally, I think you can appreciate. We've got a lot of peers as well as private equity groups that participate in the process. We do have some very strong relationships, though, and so we are also moving forward with a number of bilateral type transactions that are outside of any sort of process. But any more detail that we can provide you, Ralph, obviously, we've been preaching confidentiality.
Jason Attew: Processes, we do have some very strong relationships. So and so we're also moving forward with a number of bilateral type transactions that are outside of any sort of process.
Jason Attew: But any more detail that we can variety Ralph.
Jason Attew: Obviously, we do routine confidentiality.
Jason Attew: Look we're very excited to hopefully again be able to announce one or two of these by year end and then you can now analyze this in terms of what the overall returns are because we have incredibly disciplined to ensure that either accretive deal and the accretion will accrue to our shareholders.
Jason Attew: We were very excited to hopefully again be able to announce one or two of these by year end, and then you can analyze this in terms of what the overall returns are because we're incredibly disciplined to ensure that these are accreted deals, and the accretion will accrue to our share.
Ralph Profiti: Yes, certainly, I appreciate that, but very helpful comments. And then, secondly, I wanted to break down the incremental benefit at Island Gold with Mageno. And just, you know, can we quantify sort of bringing forward not only not only the actual production by not having to bring in that mill but also, you know, the encroachment on the more advantageous 2 to 3% NSR? And, you know, if you're running at sort of 5,000 ounces of gold equivalent, I'm just wondering if you can quantify, say, over the guidance period, whether or not we're going to see, you know, any incremental GEOs from that.
Speaker Change: Yes, certainly I appreciate that very helpful comments, and then secondly, I wanted to be.
Ralph Profiti: Break down the incremental benefit.
Ralph Profiti: At Island Gold with <unk> and just you know can we quantify sort of bringing forward not only are the actual production by not having to bring in that mill, but also you know the.
Ralph Profiti: The encroachment on the more advantageous to the 3% MSR and if youre running at sort of 5000 ounces gold equivalent I'm. Just wondering if you can if you can quantify say over the guidance period, whether or not we're going to see any incremental <unk> from that.
Jason Attew: Well, thank you, Ralph. I'll start and ask you to provide some of your expertise around the technical nature of the assets. I would say the first comment is the transaction has not closed as yet. And obviously, the best source of information when it does close is with respect to the Alamos team. Obviously, the proximity of the two assets has been something that's been contemplated for some time. What we're obviously excited about is, obviously, you have an operator that's moving into, well, taking over an asset.
Speaker Change: Well, thank you Rob I'll start out.
Jason Attew: But some is expertise around the technical nature of the asset I would say the first comment.
Jason Attew: The transaction has not closed yet.
Jason Attew: And obviously the best source of information when it does close.
Jason Attew: That could be Alamos team.
Jason Attew: Obviously, the proximity of the two assets that's been something that's been contemplated for some time.
Jason Attew: We're obviously excited as obviously you'd have an operator that moving into goodwill.
Jason Attew: And specifically, it's all about mill optimization. As I think you know, that has a deep set of experience in terms of both operational acumen and a very deep balance sheet as well. So, again, we're quite excited about
Jason Attew: Taking over an asset specifically, it's all about mill optimization.
Jason Attew: Oh, that's got a deep set of experience in terms of both operational acumen, but hurt the balance sheet as well.
Speaker Change: Yes, we're quite excited about the transaction, we do think that it's going to be beneficial for our royalties both at the island gold as well as the genome overtime, but allow me to comment if he has anything further.
Unknown Executive: Yes, if you look at the most recent disclosure by Alamos, you'll see just naturally where the center of gravity of the mining is going towards the edges of where they've been recently and that, in general, you can see that as going towards the 2 and 3 percent. The Maginot acquisition or potential acquisition doesn't really change anything. Any part of that plan, the thing that it does is de-risk some of the construction that was required, the mill expansion, tailing facilities, and so that's, you know, if the acquisition goes through, then those items are de-risked, and then the other portion is below that pit, and you'd have to go back a couple years to see some of the Argonaut disclosures on underground drilling that were really quite spectacular intersections, But that's, yeah, it's hard to quantify what that could look like.
Jason Attew: For the if you look at the most recent.
Unknown Executive: Disclosure by Alamos is you'll see just naturally where the.
Unknown Executive: The mines are the center of gravity of the mining is going towards the edges of where they've been recently and that in general you can see that as going towards the 2% to 3%.
Unknown Executive: Matt as you know.
Unknown Executive: Vision or potential acquisition doesn't really change.
Unknown Executive: Any part of that plan the thing that it does do is de risked some of the construction that is that was required on the mill expansion tailings facilities and so that.
Unknown Executive: If the.
Unknown Executive: Acquisition goes through then alright.
Unknown Executive: Or de risked.
Unknown Executive: And then the other portion is below that pit and you'd have to go back a couple of years to see some of the <unk>.
Unknown Executive: Organized disclosure on underground.
Unknown Executive: Drilling that were really quite spectacular intersections and those were not.
Unknown Executive: Not necessarily orphan, but a lot less accessible except for now in the hands of Alamos, that's a lot easier for them to drift over.
Unknown Executive: And further tests those and see if there are economic and makes sense to bring into the life of mine plan earlier.
Unknown Executive: Yes, it's hard to quantify what that could look like.
Speaker Change: Okay Alright.
Ralph Profiti: Helpful. Thanks, Jason. Thanks, Guy.
Speaker Change: Well, thanks, Jason Thanks, Keith.
Speaker Change: Thank you Rob.
Operator: Your next question comes from Kerry Smith with Haywood Securities. Your line is now open.
Ralph Profiti: Your next question comes from Kerry Smith with Haywood Haywood Securities. Your line is now open.
Kerry Smith: Thanks, operator. Jason, just two questions.
Kerry Smith: Thanks, operator.
Kerry Smith: Just two questions. Firstly, what is your sort of targeted debt level that you'd like to run with supported the company you keep paying it down pretty aggressively in.
Kerry Smith: Firstly, what is your sort of targeted debt level that you'd like to run with for the company? You keep paying it down pretty aggressively, and you know, you're generating 45 to 50 million a quarter of cash flow. So the debt's pretty modest in that context. I'm just wondering if you have a target number there.
Kerry Smith: You're generating $45 million to $50 million a quarter of cash flow. So that's pretty modest in that context. I was just wondering if you have a target number there.
Jason Attew: In your second question, Kerry,
Speaker Change: And your second question Gary.
Kerry Smith: And my second question is, how is the agreement structured on the Alamos royalty in terms of how you actually figure out what your payable ounces will be from the island tonnage because the recoveries... From a genome will be considerably lower than the recoveries. So get to me on or just by virtue of the grade. I'm just wondering how you monitor that. Thank you, Kerry.
Speaker Change: And myself okay.
Kerry Smith: And my second question is how is the agreement structure gone the Alamos royalty.
Kerry Smith: In terms of how you actually share a watch.
Kerry Smith: What your payable ounces will be from from the island tonnage because of the recoveries.
Kerry Smith: From a gino will be considerably lower than the recoveries, you'll get from the island or just by virtue of the grade and just wondering how you monitor that.
Jason Attew: Thank you, Kerry. With respect to the leverage levels, you're absolutely on point, being a real focus, Fred, and the whole Osisko executive team to continue to pay down our facilities. You heard what I had to say, Mr. Ralph, with respect to the opportunities that we do think that there's possibility for which we can be deploying this year $300-400 million U.S. And so the way we think through things, we think through things in terms of the net debt to EBITDA level, I would suggest if we can do producing assets, and it really again depends on the type of transaction that is done, because if you're doing a transaction that gives you immediate cash flow, it's obviously better.
Speaker Change: Thanks, Gary with respect to the leverage level, you're absolutely on point being a real focus.
Jason Attew: And the whole of fiscal executive team to continue to pay down or facility.
Jason Attew: Eric what I have to say that there Ralph with respect to the opportunities that we do think that there is possibility for which we can be deploying this year at three $400 million.
Jason Attew: So the way we think two things we think everything is in terms of the net debt to EBITDA level.
Jason Attew: Yes, if we can do a producing asset and it really again depends on the type of transaction that is done because if youre doing a transaction, we get immediate cash flow.
Jason Attew: It's obviously got better but general rule of thumb carry we don't want to be for any long period of time beyond our net debt to EBITDA ratio of two times, we could go through it and obviously, we've got lots of covenant.
Jason Attew: But the general rule of thumb, Kerry, we don't want to be for any long period of time beyond a net debt to EBITDA ratio of two times. We could go through it, and obviously we've got lots of covenants, and there's lots of room within the covenants of our facility to do that. But generally speaking, the rule of thumb of the management team, we think it's certainly at these commodity prices. Unknown Executive, Osisko Gold Roya, Unknown Executive, Osisko Gold Roya,
Jason Attew: There's lots of room within our covenants ability do that but generally.
Jason Attew: Generally speaking we will have some of the management team, we think it certainly at these commodity prices.
Jason Attew: Two times net debt to EBITDA.
Jason Attew: Secondly, then we'd be back into we have.
Jason Attew: Over the course of the last 12 to 18 months just repaying debt.
Jason Attew: Ill leave it out of cash flow, while repaying it accurate through another method.
Jason Attew: Turn the question with respect to the island and tonnage island gold in tonnage to eco speaking out there like that yes.
Unknown Executive: Yeah, so the distribution of ounces and the relative coverage, we can have a separate conversation if you want to reach out. But there are clues in the most recent technical report in terms of the royalty percentage with time in some of the graphs that they provide.
Speaker Change: Yes sure.
Jason Attew: The distribution of ounces on the relative coverage.
Speaker Change: We can have a separate conversation if you want to reach out.
Speaker Change: But there are clues in the most recent technical report in terms of the.
Speaker Change: The royalty percentage with time.
Unknown Executive: The graphs that they provide.
Unknown Executive: And with respect to the recovery of the Island Gold ores that would go into the Maginot Mill, if you listen to the conference calls that were given by Alamos following the announcement of the transaction, this was raised on those calls; the process The specific process they use at Maginot and at the Island Gold Mill is the same, and the expectation is that the recovery will be equal. And I expect that Alamos will be highly sensitive to any gold loss, especially if you look at the differential and grades there.
Unknown Executive: And with respect to the recovery of the eye.
Unknown Executive: Island Gold.
Unknown Executive: Or is that would go into the match you know mill.
Unknown Executive: If you listen to the.
Unknown Executive: The conference calls that were that were given by almost following the announcement of the transaction.
Unknown Executive: This was raised almost calls.
Unknown Executive: The process.
Unknown Executive: A specific process to use that now as you know and the island gold mill or the same.
Unknown Executive: The expectation is that the recovery will be equal and I expect that almost could be highly sensitive to any goldbach, especially the if you look at the differential and grades there.
Unknown Executive: We are very sensitive and will always have work for it.
Unknown Executive: Beginning period anyway, they will have the opportunity to run that test.
Unknown Executive: Test scenarios and run that.
Unknown Executive: Some of the mill throughput through the existing mill there.
Speaker Change: Yeah, I'm not we're not concerned about that.
Kerry Smith: Okay. Okay. Thank you.
Unknown Executive: Mario.
Kerry Smith: [inaudible] Okay, okay.
Speaker Change: Okay. Okay. Thank you.
Kerry Smith: Yeah.
Operator: The next question comes from John Tumazos from John Tumazos's Very Independent Research. Your line is now open.
Kerry Smith: Thanks. Your next question comes from John Tumazos from John Tumazos, very independent Research. Your line is now open.
John Tumazos: Thank you very much and congratulations on all the progress on so many fronts. I was sort of brainstorming, and I was thinking it would be an interesting package to put up for sale. If you were to bundle all of the Osisko legacy royalties together as a package, Karibu Tinti.
John Tumazos: Okay. Thank you very much and congratulations on all the progress on so many fronts.
John Tumazos: I was sort of brainstorming I was thinking it would be an interesting package to put up for sale.
John Tumazos: Okay.
John Tumazos: If you were to bundle.
John Tumazos: All of the Cisco legacy royalties together as a package.
John Tumazos: Caribou tend to.
John Tumazos: Horn 5, Falco, Windfall, and 39.6% of OTV and sell them as a block, as an asset package. It's a nice North American package, a lot of good Canadian gold. And the proceeds would probably all book straight to equity because they're assets that you didn't pay much for that probably aren't on your books for very much. They would probably all be tax-free because you have some accumulated losses, and it would improve the perceptions in the market, and we wouldn't have any more equity losses from ODV. What do you think of that, Jason? Would that be a nice way to pay down some debt or fund a stock buyback?
John Tumazos: Horne five VAALCO windfall.
Jason Attew: And the 39, 6% of O T V.
John Tumazos: And sell it as a block as an asset package.
John Tumazos: So a nice north American package good Canadian gold.
Jason Attew: And the proceeds.
Jason Attew: We'd probably all book.
John Tumazos: Straight to equity.
John Tumazos: Because they are.
John Tumazos: Such that you didn't pay much for that probably arent on your books for very much.
Jason Attew: Probably I'll be tax free.
Jason Attew: Have some accumulated losses.
John Tumazos: And it would improve the perceptions in the market.
John Tumazos: And we wouldn't have any more equity losses from O D D.
Jason Attew: What do you think is that.
John Tumazos: Jason would that be a nice way to pay down some debt or fund the stock buyback.
Jason Attew: John, I appreciate the comments and the color and look. It is obviously a very interesting concept. What I would say, however, is with all the assets that you mentioned, there are obviously some that we really do believe that there are royalties. And it's so tough in this competitive market to actually acquire royalties, but these are some very, very good royalties that we think from a shareholder perspective, which I know you are, it's much better for them to remain in our portfolio.
Jason Attew: John I appreciate the comments and the color and obviously, a very interesting concept what I would say however is.
Jason Attew: With all the assets you mentioned, obviously, some we really do believe that there.
Jason Attew: The royalties.
Jason Attew: So tough in this competitive market to actually acquire royalty, but there's some very very good royalties that we think from a shareholder perspective, which I know you have one.
Jason Attew: It's much better for the remainder of our portfolio.
Jason Attew: As I think you're aware, it's very, very rare for royalty companies, streaming companies, to be selling off assets like this. And, you know, specifically bundling all the ones that you mentioned, I would argue in this marketplace that we wouldn't get the same value if we just waited and waited until these assets did come on and start generating some very good gold equivalent ounces in the fullness of time. But I appreciate the comments; we are, again, we are very supportive of, obviously, all the companies that are associated with these companies moving development forward because we do think, in the fullness of time, that our Osisko Gold Royalty shareholders will accrue the benefit of it more so than if we were to.
Jason Attew: I think youre aware very very rare or royalty streaming companies to be selling off assets like this.
Jason Attew: And specifically bundling.
Jason Attew: All the ones that you mentioned.
Jason Attew: I would argue in this marketplace that we wouldn't get the same value as we just patient and wait until these assets do come on and start generating very good.
Jason Attew: Gold equivalent ounces in the fullness of time.
Speaker Change: But I appreciate the comment.
Jason Attew: We are again, we are very supportive of obviously all the companies that are associated with these companies moving development forward because we do think in the all of the time that our typical royalty shareholders.
Jason Attew: Accrue the benefit or more so than if we were to potentially monetize that abbvie said yesterday.
Speaker Change: Thank you.
Jason Attew: Yeah.
Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from Tanya Jakusconek. Your line is now open.
Speaker Change: Ladies and gentlemen, as a reminder, should you have a question. Please press star one your next question comes from Kenya.
Tanya Jakusconek: So Nick.
Tanya Jakusconek: Your line is now open.
Tanya Jakusconek: Great, thank you. Good morning everyone.
Tanya Jakusconek: Great. Thank you good morning, everyone I just wanted to come back to Rob's question on the transactions that are out there in the one two that you've talked about.
Tanya Jakusconek: I just wanted to come back to Rob's question on the transactions that are out there and the one to two that you've talked about, potentially being done this year Jason. I just want to understand whether it's similar to other deals in the markets which are either to fund the mine bills to help buy out some of Newcrest's Sold Assets or another by Newmont. So first of all, or is it balance sheet repair? Like I'm trying to understand what sort of, you know, deal semantics they are. Yeah, thanks for your question, Tanya.
Tanya Jakusconek: Potentially be done this year Jason.
Tanya Jakusconek: I'm trying to understand whether it's similar to other deals in the.
Tanya Jakusconek: In the markets, which are either to fund the mind Bill to help buy out some of these new cross sold assets that are either by newmont. So first of all <unk> or is it balance sheet repair like I'm trying to understand.
Tanya Jakusconek: So like you know.
Tanya Jakusconek: Deal.
Tanya Jakusconek: Mantech they are.
Jason Attew: Yeah, no, thanks. Thanks for your questions, Tanya. And again, kind of the same overriding comment with Ralph, obviously, all the conversations that we're having are quite confidential. We'd love to open up and show you the opportunities, because I think you'd be quite impressed with them. With respect to the type of transactions though, and you probably are aware that Q1 was a very quiet period for any sort of transactions in not only basically the whole subsector, the whole sector of royalties and extremes, there was really nothing that material, as you know. And so in terms of the type of transactions that we're looking at, you're absolutely on point.
Speaker Change: Yes. Thanks.
Tanya Jakusconek: Thanks for your question.
Jason Attew: And again kind of the same overriding comment with Ralph obviously, all the conversations that we're in a quite confidential, we'd love to open up and show you the opportunity set because I think it'd be quite impressed with it.
Jason Attew: With respect to the type of transactions, though when he probably youre aware that Q1 was a very quiet period or any sort of transaction by.
Jason Attew: Basically the whole sub sector of the whole picture of royalties and streams that were really nothing material.
Jason Attew: <unk>.
Jason Attew: It's transactions for which senior companies are selling assets, and mid-tiers are effectively looking at this as a financing possibility or vehicle to essentially get the funds to bring that into their portfolio, which hopefully will improve the portfolio. There are very few opportunities with respect to balance sheet repair at this point, I would say. Typically, again, if the assets aren't supporting what they're doing currently, unless they have a large portfolio with one asset that's materially better than the others, we obviously need to structure it to ensure that our interests are protected if we're assisting with one of the lesser assets.
Jason Attew: And so in terms of the type of transactions that we're looking at and you're absolutely on point as transactions for which senior families or selling assets and mid tier effectively looking there.
Jason Attew: Financing.
Jason Attew: Profitability or vehicle data you can essentially get the funds to bring it up into their portfolio and that hopefully will improve the portfolio there.
Jason Attew: There are very few I would say opportunities with respect to balance sheet repair at this point.
Jason Attew: Typically.
Jason Attew: Again, if the asset backed supporting what they're what they are doing currently unless they have a large portfolio with one asset.
Jason Attew: Yes.
Jason Attew: Materially better than the others and then we obviously need to structure to ensure that our.
Jason Attew: So we're not really looking and working on anything with respect to balance sheet repair. It's more on companies either acquiring good assets that, for the most part, are in production, or some very high quality development assets that will come into production within our five-year outlook with very, very competent teams, management teams in very good jurisdictions. I think that's all I can say for now, Tanya.
Tanya Jakusconek: Our interests are protected.
Tanya Jakusconek: We are assisting with one of the lesser of asset.
Jason Attew: So we're not really looking and working on anything with respect to the balance sheet repair it's more on <unk>.
Jason Attew: Companies either acquiring good assets.
Jason Attew: For the most of our production and for some very high quality development.
Tanya Jakusconek: That will come into production within our five year outlook with very very competent team management team has been very good jurisdiction I think that's all I can say for now.
Tanya Jakusconek: Okay, that's fair enough, and maybe Jason, would you be interested in, let's say, some of the bigger-sized deals that may be syndicated? Would that be of interest to you? If you were syndicated in that 60 to 300 million range that you talked about? Because it's always of interest to us.
Tanya Jakusconek: Okay, that's fair enough and maybe Jason would you be interested in that space. Some of the bigger size deals that may be syndicated would that be of interest to you.
Jason Attew: With syndicated in that $60 million to $300 million range that you talked about.
Jason Attew: It's always of interest to us, being the fourth or fifth largest company in terms of public companies, royalties companies out there. If again, we have deep relationships with all our peers, so it's always of interest to do something. As you can appreciate, though, there haven't been that many transactions of that sort or nature done in the past, or for the reasons of, again, if you have a high-quality asset, obviously, you want to do a transaction that benefits your shareholders as opposed to, you know, sharing the economics with others.
Tanya Jakusconek: As always of interest to us being the floor.
Jason Attew: The fifth largest company in terms of the public companies royalty companies out there.
Jason Attew: If again, we have deep relationships with all of our peers.
Jason Attew: Interest.
Jason Attew: As you can appreciate though there hasn't been that many transactions the last order nature thats being done in the past or the reasons. Both again, if you have a high quality asset obviously, you want to do a transaction that accrues to your shareholders.
Jason Attew: Okay.
Jason Attew: Sharing these.
Jason Attew: The economics with others.
Jason Attew: We do have conversations we do like the costs that we're open to that concept.
Jason Attew: We'll see where it goes.
Tanya Jakusconek: Okay, and then my last question on these transactions, you know, are we looking at sort of your transaction being very simple in structure, i.e., a royalty or a stream? Or should we be thinking that they would be more complicated with equity investments and or debt components?
Speaker Change: Okay and then my last question on these transactions.
Tanya Jakusconek: Are we looking at.
Tanya Jakusconek: So it would be our transaction being very simple line structure.
Tanya Jakusconek: E a royalty or a stream or should we be thinking that there would be more complicated with equity investments and our debt components.
Jason Attew: Yeah, that's a great question, Tanya. I would say every opportunity we look at is quite bespoke. There's obviously a set of needs for the partner of the NDSB company that we're looking to assist either through a build or through an acquisition. And so we really do focus on the strength of the company, the cash flow of that company, and try to be quite bespoke with respect to how we can assist, whether it's royalty stream equity.
Speaker Change: Yes, Great question, Bonnie I would say every opportunity we look at it quite bespoke.
Jason Attew: Obviously, a set of needs for the partner the indemnity company.
Jason Attew: We're looking to exit either through a bodybuilder through an acquisition and so we really do focus on the strength.
Jason Attew: Company, the cash flow of that company and trying to be quite bespoke with respect to how we can assess whether its royalty extreme equity we do shy away from the debt piece, though that's not really what we consider are part of our business. It's nothing that we've contemplated to date and I would say right now with the opportunity that we have in.
Jason Attew: We do shy away from the debt piece, though; that's not really what we consider as part of our business. It's nothing that we've contemplated to date. And I would say right now, with the opportunities that we have in front of us, it's nothing that we're going to contemplate in the very near term.
Jason Attew: Front of it there's nothing that we're going to contemplate in the very near term.
Tanya Jakusconek: Okay, that's very helpful.
Tanya Jakusconek: Okay, that's very helpful. Thank you so much and good luck.
Speaker Change: Okay. That's very helpful. Thank you so much and good luck.
Speaker Change: Thanks Tanya.
Tanya Jakusconek: Okay.
Operator: Your next question comes from Brian MacArthur with Raymond James. Your line is now open.
Tanya Jakusconek: Your next question comes from Brian Macarthur with Raymond James Your line is now open.
Brian Macarthur: Thank you for taking my questions. Just following up on Tanya's question, though: I mean, people talk about these three and four hundred million dollar deals. Can we assume, though, that the majority of that price will be streaming or royalties? I mean, if half of it becomes equity all the time, aren't we getting back into the situation we had before where, you know, the royalty company's own portfolio, but you're probably not going to get the same credit for it. Thanks, Brian.
Brian Macarthur: Thank you for taking my questions I just following up on <unk> question, though I mean people talk about these three and 400 million dollar deals can we assume though the majority of that price will be streaming of royalties if top up it becomes equity all the time arent, we getting back into the situation we.
Brian Macarthur: Had before where.
Brian Macarthur: The royalty companies own portfolios, but you're probably not going to get the same credits for it.
Jason Attew: So thanks, Brian, for the comment. Like I said, I can only comment on, again, the strategy and how we're going to execute our business. I can't speak for, obviously, our peers and our competitors. What I can tell you is the general point in terms of how we look at things.
Speaker Change: So thanks, Brian for the comment.
Jason Attew: Can only comment on again the strategy.
Jason Attew: We're going to execute our business I can't speak for obviously.
Jason Attew: Here is that our competitor.
Jason Attew: I can tell you that.
Jason Attew: The general point.
Jason Attew: In terms of.
Jason Attew: How we look at things, we do not want to be portfolio managers of the equity positions Gulfport, we will as I've said in the past.
Jason Attew: We do not want to be portfolio managers of equity positions going forward. However, we will, as I've said in the past, in certain circumstances for which financing is quite bespoke, and it's the last capital in with respect to the equity check, similar to what we did with the CSA transactions that were required for them to acquire the asset from Glencore. But we don't habitually want to, again, be portfolio managers that effectively have an equity book.
Jason Attew: And third the circumstances for which you're financing is quite bespoke and lots of capital in with respect to the equity check similar to what we did with the CSA transactions that was required for them to acquire the asset from from Glencore.
Jason Attew: But we don't.
Jason Attew: Eventually want to again be portfolio managers that are effectively have an equity book.
Jason Attew: So it's essentially, again, as we think about from an Osisko Gold royalty perspective, the priorities in terms of funding, certainly royalty streams, and economic interest would be first and foremost. But if some equity is required, and it's got to be right sized, that really assists with a catalyzing event, either being an acquisition or for something that really gets a fully financed development asset. We will consider that, and we have in the past, and we will very likely do that in the future.
Jason Attew: So it's essentially again, we think that both permanent physical royalty perspective, the priorities in terms of funding certainly royalty extreme economic address would be first and foremost but.
Jason Attew: Just some equity is required and it's got to be right sized that really fits with a catalyzing event, either being an acquisition or something that really get fully finance development assets, we will consider that and we have in the past that we have very likely do that in the future.
Brian Macarthur: Great, thank you for that caller. That's very helpful. Second question is just, I know you mentioned Renard and, you know, it's been taken out, but it, you know, Winsome potentially as a call option to buy this thing, and maybe in the future, it comes back.
Speaker Change: Great. Thank you for that color. That's very helpful. Second question is just I know you mentioned Bernard and it's been taken out but when some potentially as a call option to buy this thing and maybe in the future.
Brian Macarthur: Comes back do you have any other I mean at times, you've lent money into them in.
Brian Macarthur: Do you have any others? I mean, at times you've lent money into them. Do you have anything else that comes back? I mean, if this deal were to close and went forward, would the only thing you have be the 9.6% diamond stream? Or are there other claims you might have on some of that money that
Brian Macarthur: Do you have anything else that comes back I mean, if this deal were to close and went for with the only thing you have be the nine 6% Diamond stream or is there. Other claims you might have on some of that money that they put into acquiring Bernard if that transaction goes through thank you.
Jason Attew: Thanks, Brian. Excellent question. I'm going to turn it over to Ian. Ian's on the board. He's been living this experience for the last 24 months, so he's probably the best person to comment. Go ahead, Mr. Renard.
Brian Macarthur: Thanks, Brian excellent question I'm going to turn it over to Ian.
Ian: He's on the board Stornoway has been living this experience for the last 24 months.
Ian: So it is probably the best person to comment.
Ian: Go ahead, Mr Reinhardt.
Ian: Yeah, Great question. Thanks.
Ian: In all likelihood if that win some transaction materializes.
Ian: The stream will be.
Ian: As part of that transaction and the only proceeds will be low income consideration BBB and cash for the shares.
Jason Attew:
Brian Macarthur: Great. Thanks very much for taking my questions. Thank you.
Ian: Great. Thanks, very much for taking my questions.
Ian: Thank you Brian.
Brian Macarthur: Yeah.
Operator: There are no further questions at this time. I will now turn the call over to Jason.
Brian Macarthur: There are no further questions at this time I will now turn the call over to Jason.
Operator: Yeah.
Jason Attew: Thank you very much, operator. Again, this concludes our call. Thank you for your attention today and for listening to our Q1 results. Have a good week, everybody.
Jason Attew: Thank you very much operator again this concludes our call. Thank you for your attention today and listening to our Q1 results.
Jason Attew: Good morning, everybody.
Jason Attew: Yes.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.
Operator: Yes.
Operator: [music].