Q3 2024 Osisko Gold Royalties Ltd Earnings Call

Move rapidly to unlock the potential of the significant discovery.

and the discovery of the high grade underground pepper deposit quickly followed suit.

The project now comprises of a current, short, compliant mineral-resourous estimate that includes a high-grade resource of 1.9 million ounces at 8.7 grams per ton.

The expiration potential of this emerging resource is what really attracted us to this asset.

We see parallels to the early innings of Alamos's Island Gold Mine with this asset.

Speaker Change: As noted previously, this is a straight down the Fairway Transaction for Cisco.

Givinner is an asset that checks all our boxes in terms of near-term geos, near-term cash flow generation, a top tier mining jurisdiction, management quality, and significant exploration upside.

Speaker Change: We are expecting the key catalyst from Delgaranga in the second quarter of calendar 2025. Whereby Spartan has indicated, they plan to release a maiden reserve estimate and project feasibility study.

Speaker Change: This information is likely to coincide with a final investment decision, which could see Delgarang at restart mining and milling operations as early as late 2026.

Speaker Change: We see the exciting projects fitting comfortably within our five-year outlook when we update our outlook out to 2029 in February of next year. With the Dal Garanga, potentially contributing well over 2,500 gold-to-covone ounces annually to assist go over the life of mine.

Finally, with over 95 kilometers of drilling plan for Spartans Financial Year 2025, we also expect the project will continue to grow in scale.

The End.

twitching gears to slide 11 and focusing on our cornerstone asset, the Canadian Mark Moleurctic Complex, was French and centre in Ignitco Eagles impressive Q32024 results announced last week.

As noted, production was a tab lighter quarter over quarter, but this was expected. And her partner remains well on track to achieve production guidance from a lactic this year.

Perhaps even more exciting were the headline drill results from the shallower parts of the East School Lead deposit, which is Cisco has a 5% NSR.

Speaker Change: Egnico specifically noted in their release that, and I quote,

Continued conversion drilling success in this area would confirm the potential to add mineral reserves that could provide additional production for the operation that would require modest additional lateral development considering the area's proximity to the existing ramp infrastructure.

Speaker Change: Moving to slide 12.

and Underground Development at Odyssey Progress, we call in Q3.

As ramp development continued to progress on schedule, and as of September 30th, 2024, the main ramp had reached a depth of 873 meters.

Recall that Ignaco continues to study the potential to accelerate the first underground production from East Gouldi into 2026 from 2027 previously.

Speaker Change: As a ramp progress remains ahead of schedule.

Speaker Change: On the expiration front we're excited to report that expiration drilling at the Odyssey Mine and regional expiration drilling around the mine total 68,800 meters during the third quarter.

Speaker Change: Reneoli, 155,000 meters during the first nine months of 2024.

Speaker Change: with up to 11 underground drill rigs and 13 surface drill rigs in operation, primarily targeting the East School lead and other and the various audios audios speed deposits.

The Cisco would also like to congratulate members of the Ignanco Eagles Canadian Malar to expiration team. As it was announced yesterday that they were selected to be the recipients of the PDAQ 2025 build Dennis Award for their extraordinary discovery of the East School be Gold deposit.

Speaker Change: This discovery made in 2018 represents a major mock-miles stone in Canadian mineral exploration due to its size, geological significance and economic value.

Speaker Change: The exploration team's perseverance, technical expertise, and commitment to innovation have been central to the success of this discovery.

Speaker Change: Constquently, the Cisco couldn't think of a more deserving group for this award.

Speaker Change: On to slide 13, which touches on Capstone Copper's mental splancos mine, our second most important contributor.

Speaker Change: We're excited to say that things are finally appear to be turning the corner.

Speaker Change: In July, the successful two-week plan shutdown was completed, which included the installation of a new holding tank and additional pumps in the tailings area.

Speaker Change: These investments addressed or addressed deficiencies identified preventing the sustained achievement of the 20,000 ton per day throughput capacity from the self-light operations.

Speaker Change: Following the plant ramp up period in August, or through put, averaged 18,062 tons per day, through to the end of Q3. With plant throughput, meeting or exceeding the nameplate capacity of 20,000 tons per day on 23 operating days.

Speaker Change: The overall variability of the milling process has been significantly reduced and if you listen to management on their Q3 results presentation, higher throughput is expected in Q4.

Speaker Change: Given our two months delivery lag on the stream, our year end at Mantos Blankos effectively ended last week on October 31.

Speaker Change: But this is very directually good news as it bodes well for a Cisco as we head into 2025.

Speaker Change: with improvements at Manso's Blankos expected to be the key year over year, Golda Quivalent Owens growth driver for our Cisco.

Speaker Change: Additionally, we are looking forward to a potential phase-to-expansion at Mantos Blankos over the next few years with a feasibility study on this expected from our partner late next year.

Speaker Change: Moving to slide 14.

Speaker Change: and after a solid Q3 2024, Francisco is on track to meet his 2024 Gold Equivalent Outed Delivery Guidance Range of 77-83 Gold Equivalent Outed.

Speaker Change: which was revised last quarter after the suspension and subsequent full-right down of Eagle.

Speaker Change: I also just want to quickly flag Nendimi on the slide. The mind and the male are expected to be commissioned by operator Cardinal and Nimi at some point during this month.

Speaker Change: with the potential for first-gold or before the end of the year.

Speaker Change: Based on previously published technical studies, which we understand still underpin the expected mind plan. The great profile of the mind sees higher grades upfront in the first few years.

Speaker Change: Meaning Nendimi should represent another key year over year growth driver for a Cisco as we head into 2025.

Speaker Change: With a 15-year life of mine, we also expect Nendini will be a meaningful contributor to a Cisco for many years to come.

Speaker Change: Our investing companies continue to make great strides in derisking their assets that will accrue to our shareholders.

Speaker Change: Hi, light system of these efforts are provided on slide 15.

Speaker Change: If there was one we haven't really discussed in one that I would like to highlight today, it would be Oceanic Gold's WKP, which in early October was approved under the New Zealand's Government New Fast Track Approvals Bill.

Speaker Change: We're expecting to find out more about Oceanigold's plans for the Wahi North WKP project.

Speaker Change: Before the end of the year, as the results of Project Pre-Feedability Study are expected this quarter.

Speaker Change: This is Go Ones, a 2% NSR royalty on WKP.

Speaker Change: Finally, we'll end the formal part of the presentation on slide 16, which outlines the current state of the system.

Speaker Change: At Quarter End we had total debt of just over 80 million and net debt of only 22 million.

Speaker Change: This comparison net debt of just under 250 million in the comparative quarter of 2023.

Speaker Change: As a responsible capital allocators, we have focused a news error cash flow from operating activities to pay down a revolving debt facility.

Speaker Change: Here today these repayments amount to over $115 million.

Speaker Change: During the quarter, the Cisco Viermuda, the Bromita Limited, also made a US $10 million payment to so-gold as their first installment under the Gold Stream Agreement to further advance the Cascue L project in Ecuador.

Speaker Change: As we are now in the fourth quarter, it's also worth recalling that we're expecting to pay a $50 million during this current period once a Dalgorega transaction closes.

Speaker Change: Assuming no new transactions are announced by a Cisco or any of its subsidiaries between now and year end, the company should be in an etcached cash position by early 2025.

Speaker Change: This is important as a Cisco's corporate development team continues to be active.

Speaker Change: With the hope of getting more deals across the line over the next several months.

Speaker Change: Our much-timpro balance sheet provides the company with a financial capacity and flexibility to continue its strategy of discipline and allocation in the pursuit of high quality, a creative precious metal streams and royalties.

Speaker Change: That will both throw the company's current and near-term Goldquivolene ounce deliveries, as well as cash flows, all of which should accrue to our shareholders benefit.

Speaker Change: Lastly, on behalf of all the employees and Board of Assist Go, we'd like to thank Rob Crichmore Off for a valuable guidance and advice over the past two years as he moves on to take the helm at Heckler mining.

Speaker Change: And with that, I'd like to thank everyone for listening today. We'll now open the line for questions, including those from the webcast.

Speaker Change: If we don't get to all the questions on the line, we'll make sure to respond offline to those that aren't covered on the webcast.

Speaker Change: Operator.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question in answer session. Should you have a question please press star, follow by the one on your touch tone phone. You will hear a prompt that your hand has been raised.

Speaker Change: should you wish to decline from the polling process please press our follow by the two. If you are using a speaker phone please the handset before pressing any keys.

Speaker Change: First Question comes from Ralph, Profit with a Capital. Your line is now open.

Ralph: Thanks, Alperator. Good afternoon. Jason, I want to ask a question on the Delgaranga Production Pro file.

Speaker Change: Specifically your reference to 2.5,000 ounces

Speaker Change: Annually, which I believe was a life of my estimate. When we get into that high-grade core in those early years, do you have a more of a near-term profile if you look at it?

Speaker Change: Potential diluted grades. I mean, my numbers come almost double that in the first few years. Just wondering if that...

Speaker Change: and then just to follow up, if we're not going to get a mind plan until the second quarter of 2025, you anticipate still including it in your next guidance update or will you wait?

Speaker Change: Thank you for your question. You noted the most important thing with respect to disclosure.

Speaker Change: from Spartan Resources. We will not see publicly.

Speaker Change: The feasibility study, as I mentioned, into 2025. So it's really difficult for us to comment on a mind plan that hasn't...

Speaker Change: Ben developed. However, I will pass the microphone over to Tuggi who is very familiar with, again, that investment and was one of the bigger advocates here at a Cisco of us pursuing and transacting on that.

Tuggi: Yeah, Ralph, you correctly pointed out that the grade, they have potential to hit high grade earlier in life of mine

Tuggi: We're trying to be a little bit conservative.

Tuggi: with respect to how those answers are going through that plant, but there's also a buy-down provision and we don't know what's going to happen with that piece as well.

Tuggi: Chris Northernell.

Chris Northernell: Sorry Ralph, the other point is that the mill allows for 2.5 million tons per year. However, the company has sort of been communicating that they'll be using a portion of that, at least in the initial life of mine.

Tuggi: And we'll respect you a question on the five year outlook, yes, in February of next year we will be providing five year outlook. And you can expect that there will be some inclusion of Dalgaranga within our five year outlook.

Ralph: Okay, thanks for that clarity and I apologize if I missed this on Nandini, are we?

Ralph: Expecting first revenue, including sort of that one to two months like, that first goals is the first goal this ported towards the end of the year. We may not see those first revenues until say Q1 or Q2 of 25.

Speaker Change: I think that's a very good assumption and yes. So yes Ralph, I think that's what we're expecting here, Q1, 2025, if again the poor first gold by the end of this year.

Speaker Change: and Chris. Thanks, Jason Attew.

Chris: Thanks for all.

Speaker Change: Good night. Your next question comes from Carrie Smith with Haywood Security. Your line is now open.

Carrie Smith: Thanks, Dr. Peter. Jason, would the plan be for a dog or a dog or an anger when you when it closes, I guess you would just draw it down on your facility. Is that the plan in the short term?

Speaker Change: Yes, that's exactly right. Gary again, it's 50 million US dollars, so we'll be coming out. We expect it's going to be coming out in Q4 of this year. It is subject as I mentioned to the firm approval in Australia. But the plan is to just draw on a revolver facility. But as you also know, and note from our quarter this year, we're making close to 50 million and operating cash.

Speaker Change: for a year or sorry for a quarter, especially if they have these elevated gold prices. So we'll quickly pay that down based on our operating cash flow.

Speaker Change: All right, okay, okay, that's great. And then as you mentioned, you're going to give switch over for account of your 2025 to US dollar reporting, then correct?

Speaker Change: Yes, that's correct. So our presentation, currency, go forward. For for 2025, we'll be in US dollars. Our functional currency is still remaining as Canadian dollars.

Speaker Change: and West with a large proportion of your revenues coming from Canada. Would you think about doing any currency, hedging that? I mean, I know you wouldn't hedge the commodity, but wouldn't make you hedge some of the exchange exposure.

Speaker Change: Look at this, we don't really get you in.

Speaker Change: You know, I look at the good question and Gary and given.

Speaker Change: Again, week we consider any sort of hedging FX others is...

Speaker Change: Effectively Risk Management Exercise. If we see that there's a discrepancy for example today, there was obviously a very strong reaction and a very positive reaction to the US dollar, whether that's, we believe that sustainable or not, go forward. Again, we'll get together as a team of potentially put on.

Speaker Change: Some US dollar hedges, but it won't be material and it's really as a risk management exercise as opposed to any sort of speculation on currency.

Speaker Change: Thank you very much.

Speaker Change: Thanks, Gary.

Speaker Change: Ladies and gentlemen, as there are reminders, should you have a question please press star 1. Your next question comes from Tangia, Jakosno with Scorshabank. Your line is now open.

Tangia Jakosno: I'd like to thank you for your support.

Tangia Jakosno: I just wanted to ask on the transaction environment and I know Jason you mentioned it's really busy and maybe you don't get another one in this year but watch out in the first half of next year.

Speaker Change: and we have a different parameter as on your transactions. Like we saw, one of your competitors have to put colors in for the transaction they did. So I'm just kind of wondering what the structure is looking like has that been changing for you as well.

Speaker Change: Thanks, Daniel. We're really good question. So as I said, the opportunity set is very, very robust.

Speaker Change: Again, our sweet spot as we've articulated many, many times, anywhere between 50 US, million, all the way up to 4 to 500 million US.

Speaker Change: So really will depend case by case and first and foremost we look at acid quality.

Speaker Change: and so yes, there's been a number of transactions that we've obviously seen. One of our senior peers at Transact at it was...

Speaker Change: and Transaction that also involves a debt facility.

Speaker Change: So what I would say around that is we try and be as bespoke to our operating partners.

Speaker Change: Or are potential operating partners as possible, but it really comes back to the asset quality. If we think the asset quality is very good and we think the management quality is very good.

Speaker Change: and a jurisdiction that we're comfortable will be as bespoke as we can to be competitive around ensuring that again we're disciplined with our capital deployment.

Speaker Change: and so you're seeing in the marketplace that everybody has to, it is competitive, but everybody's having to be, again, providing that bespoke solution to some of the operating partners out there.

Speaker Change: So would that be a, should I conclude from that that you would be open to equity and that?

Speaker Change: et cetera, and callers if you know if the opportunity was great and you have to provide that.

Speaker Change: Look for the right asset and the team got excited and we're going to actually provide very good returns to our equity holders. Yes, I think everything is on the table in terms of what you've seen historically.

Speaker Change: Okay. And with most of the opportunities you're seeing, so be in the development phase, or are we seeing any that is more in the production phase?

Speaker Change: We're seeing a lot in the cash flow development stage. Sorry, the cash flowing stage more so, and a lot of it has to do with obviously they do a lot of activity in our sector right now. So we're across a number of companies assisting them with acquisition finance.

Speaker Change: and so those acquisition finance, they're all cash flowing opportunities at this stage. There are also some high-quality development assets that...

Speaker Change: and Work Cross from as well. So case by case, but we're again, the focus of this team and the company is really to focus on opportunities that will have an impact and hopefully a significant positive, a creative impact in the next five years.

Speaker Change: Okay and did I hear correctly that?

Speaker Change: You will be changing your reporting currency to US dollars from Canadian dollars starting in 2025.

Speaker Change: That's correct.

Speaker Change: Okay, so two four will still be Canadian but starting with Q1, it would be all USC.

Speaker Change: Thank you for the US dollars and then into the contract at 2025 and all the US dollars.

Speaker Change: Okay, so two four and going forward. Okay, that's great. Thank you for the clarity on that.

Speaker Change: There are no further questions at this time I will now turn the call over to Jason for closing remarks.

Jason Attew: Thanks for everyone participating in this evening. As I said, we had a very solid quarter at SSGO Gold Royalty's and we look forward to.

Jason Attew: and I'm coming back in another solid core quarter in Q4. So thank you for your time, thank you for support. And if there are any further questions you know how to get to us, thank you.

Speaker Change: Ladies and gentlemen, this concludes our conference call for today. We thank you for participating in that. Please disconnect your lines.

Speaker Change: [inaudible]