Q2 2026 OR Royalties Inc Earnings Call

Operator 2: Good morning, ladies and gentlemen, and welcome to the OR Royalties Q2 2026 Results Conference Call. After the presentation, we will conduct a question and answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. Please note that this call is being recorded today, 6 August 2026, at 10:00 AM Eastern time. I would now like to turn the meeting over to our host for today's call, Mr. Jason Attew. Bonjour mesdames et messieurs. Bienvenue à l'appel conférence des résultats du deuxième trimestre de 2026 de Redevances Aurifères Osisko. Après la présentation, nous procéderons à une séance de questions et réponses. Si vous désirez poser une question, veuillez appuyer sur la touche étoile suivie du numéro un. Veuillez prendre note que cette appel est enregistrée aujourd'hui, le 6 août 2026 à 10:00 h, heure de l'Est.

Speaker #1: One. Good morning, ladies and gentlemen, and welcome to the OR Royalties Q2 2026 results conference call. After the presentation, we will conduct a question-and-answer session.

Speaker #1: If you would like to ask a question, please press star, followed by the number 1. On your telephone keypad, please note that this call is being recorded today, August 6, 2026, at 10:00 AM Eastern Time.

Speaker #1: I would now like to turn the meeting over to our host for today's call, Mr. Jason Attew. Bonjour, madame et monsieur, et bienvenue à l'appel conférence des résultats du deuxième trimestre de 2026 de redevance OR.

Speaker #1: Après la présentation, nous procéderons à une séance de questions et réponses. Si vous désirez poser une question, veuillez appuyer sur la touche étoile suivie du numéro 1.

Speaker #1: Veuillez prendre note que cet appel est enregistré aujourd'hui, le 6 août 2026, à 10:00 heure de l'Est. J'aimerais maintenant céder la parole à votre hôte, Monsieur Jason Attew.

Operator 2: J'aimerais maintenant céder la parole à votre hôte, Monsieur Jason Attew.

Speaker #2: Good morning, everybody, and thank you for joining us on a busy earnings day. Please note that the news release and regulatory filings are available on our website, and on Edgar and Cedar Plus.

Jason Attew: Good morning, everybody, and thank you for joining us on a busy earnings day. Please note that the news release and regulatory filings are available on our website and on EDGAR and SEDAR+. If you are logging into the webcast, we will advance the slides for today's presentation, which is also available in the investor section of our website. Please also note there are forward-looking statements in this presentation from which actual results may differ, and that all amounts presented and discussed will be in US dollars unless otherwise noted. I am joined on the call this morning by Fred Ruel, the company's Chief Financial Officer, Vice President, Finance, amongst the others, as indicated on slide three. Fred will take you through the financial results in a few minutes. Three things to take away from the Q2. First, our portfolio did its job.

Speaker #2: If you are logging into the webcast, we will advance the slides for today's presentation. Which is also available in the investor section of our website.

Speaker #2: Please also note there are forward-looking statements in this presentation from which actual results may differ and that all amounts presented and discussed will be in U.S.

Speaker #2: dollars unless otherwise noted. I'm joined on the call this morning by Fred Ruele, the company's Chief Financial Officer and VP Finance. Amongst the others has indicated on slide 3.

Speaker #2: Fred will take you through the financial results in a few minutes. Three things to take away from the second quarter. First, our portfolio did its job.

Speaker #2: Revenues of $97.8 million and operating cash flow of $83.2 million were both up 62% over the second quarter of last year. On a 5% increase in goal-equivalent ounces.

Jason Attew: Revenues of $97.8 million and operating cash flow of $83.2 million were both up 62% over the Q2 of last year on a 5% increase in Gold Equivalent Ounces. That spread, 5 points of GEO growth producing 62 points of cash flow growth, is the whole argument for this business model. $0.968 of every revenue dollar converted to Cash Margin this quarter, which is the best in the sector. Also, net earnings were up 94% to $0.33 per share. Second, capital. We closed on the Gold Fields royalty portfolio and the Spring Valley acquisitions, $335 million in total, funded largely from our Revolver, which stood at $215 million drawn at quarter-end. In July, we closed the Murray Brook Stream as well.

Speaker #2: That spread, 5 points of geo-growth producing 62 points of cash flow growth, is the whole argument for this business model. $96.8 cents of every revenue dollar converted to cash margin this quarter, which is the best in the sector.

Speaker #2: Also, net earnings were up 94% to $33 cents per share. Second, capital. We closed on the Goldfields royalty portfolio and the Spring Valley acquisitions.

Speaker #2: $335 million in total, funded largely from our revolver, which stood at $215 million drawn at quarter-end. In July, we closed the Murraybrook stream as well.

Speaker #2: The second half's job is straightforward: continue to seek accretive opportunities for our owners. Third, guidance. First half deliveries were $43,497 goal-equivalent ounces, which were up 12% over the first half of 2025.

Jason Attew: The H2's job is straightforward, continue to seek accretive opportunities for our owners. Third, guidance. H1 deliveries were 43,497 Gold Equivalent Ounces, which were up 12% over H1 2025 and has us comfortably on track for our 80,000 to 90,000 GEO range for 2026. I want to spend a minute on why that remains true after the news at Canadian Malartic. As most of you are aware, on 1 July, a rock mass movement occurred along the north wall of the Barnat open pit at Canadian Malartic. Nobody was hurt. As Agnico described on its Q2 call last week, its monitoring systems were tracking the wall and mining in the area had already been suspended as a precaution. The systems worked exactly as designed. Here is the updated picture from that call.

Speaker #2: And track for our 80,000 to 90,000 GEO range for 2026. And I want to spend a minute on why that remains true after the news at Canadian Malartic.

Speaker #2: As most of you are aware, on July 1, a rock mass movement occurred along the north wall of the Barnett Open Pit at Canadian Malartic.

Speaker #2: Nobody was hurt. And as Agneco described on its second quarter call last week, is monitoring systems were tracking the wall and mining in the area had already been suspended as a precaution.

Speaker #2: The systems worked exactly as designed. Here is the updated picture from that call. Roughly 1 million tons of move material will remain in place.

Jason Attew: Roughly 1 million tons of moved material will remain in place. Agnico will spend the Q3 building safety berms and access roads, with mining in the affected area expected to resume in the Q4. In total, approximately 370,000 ounces of gold are now considered inaccessible over the next 3 years, 60,000 to 80,000 ounces in the H2 2026 and up to roughly 150,000 ounces in each of 2027 and 2028. Agnico now expects full-year production toward the lower end of its guidance range at Canadian Malartic, supplementing mill feed from low-grade stockpiles in the meantime. Most of you would have already updated your models for this event, I will walk you through our math.

Speaker #2: Agneco will spend the third quarter building safety berms and access roads. With mining in the affected area expected to resume in the fourth quarter.

Speaker #2: In total, approximately 370,000 ounces of gold are now considered inaccessible over the next three years. 60 to 80 thousand ounces in the second half of 2026, and roughly up to, or up to roughly 150,000 ounces in each of 2027 and 2028.

Speaker #2: Agneco now expects full-year production toward the lower end of its guidance range in Canadian Malartic. Supplementing mill feed from low-grade stockpiles in the meantime.

Speaker #2: Most of you would have already updated your models for this event, but I will walk you through our math. Applying 5% to those figures means roughly 3,500 fewer geos to OR in 2026.

Jason Attew: Applying 5% to those figures means roughly 3,500 fewer GEOs to OR in 2026. Up to roughly 7,500 fewer GEOs in each of 2027 and 2028. Call it 18,500 Gold Equivalent Ounces over 3 years. This, of course, would be before any mitigation or recovery activities Agnico undertakes. Three things don't change because of this. Our 2026 guidance of 80,000 to 90,000 GEO stands. Our 2030 outlook of 120,000 to 135,000 GEOs is unaffected because Barnat was always scheduled to be mined out by 2028 or 2029. In Odyssey, the future of Canadian Malartic is untouched. It set a quarterly production record of 28,800 ounces. The first phase of shaft number 1 sinking was completed in July at a depth of 1,586 meters, and first shaft production remains on schedule for the Q2 2027.

Speaker #2: And up to roughly 7,500 fewer geos in each of 2027 and 2028. So call it 18,500 gold-equivalent ounces over three years. This, of course, would be before any mitigation or recovery activities Agneco undertakes.

Speaker #2: Three things don't change because of this. Our 2026 guidance of 80,000 to 90,000 geo stands. Our 2030 outlook of 120 to 135,000 geos is unaffected.

Speaker #2: Because Barnett was always scheduled to be mined out by 2028 or 2029. In Odyssey, the future of Canadian Malartic is untouched. It's set a quarterly production record of ounces.

Speaker #2: The first phase of shaft number 1 sinking was completed in July, at a depth of 1,586 meters, and first shaft production remains on schedule for the second quarter of 2027.

Speaker #2: Agneco was clear on its call that its journey to 1 million ounces at Canadian Malartic by the early 2030s remained unchanged. It also note on a more somber subject that Canadian Malartic's second quarter included a 16-day mill shutdown following a fatal accident in April.

Jason Attew: Agnico was clear on its call that its journey to 1 million ounces at Canadian Malartic by the early 2030s remain unchanged. I'd also note on a more somber subject that Canadian Malartic's Q2 included a 6-day mill shutdown following a fatal accident in April. Our thoughts remain with the family and colleagues affected, and we fully support Agnico's position that nothing at the operation matters more than the safety of its people. Two smaller items also moved against us. At CSA, concentrates sat on site at quarter-end because of transport logistics, deferring some silver and copper GEOs into the H2. Harmony expects inventories to normalize over the balance of the year. Mantos Blancos delivered fewer GEOs than in the Q1, which we had flagged last quarter as silver grades were front-end loaded this year.

Speaker #2: Our thoughts remain with the family and colleagues affected. And we fully support Agneco's position that nothing at the operation matters more than the safety of its people.

Speaker #2: Two smaller items also moved against us. At CSA, concentrate sat-on-site at quarter-end because of transport logistics. Deferring some silver and copper geos into the second half.

Speaker #2: Harmony expects inventories to normalize over the balance of the year. And Mantos Blancos delivered fewer geos than in the first quarter, which we had flagged last quarter as silver grades were front-end loaded this year.

Speaker #2: Net of all this, we now expect the second half to be modestly lighter than the first. Barnett takes ounces out, and the ramp-ups at Nandini, San CSA put some back.

Jason Attew: Net of all this, we now expect the H2 to be modestly lighter than the H1. Barnat takes ounces out, and the ramp-ups at Namdini, San Gabriel, Dalgaranga, Seabee, and CSA put some back. Scoring ourselves against what we previously committed to, the 2026 guidance is on track, the 2030 outlook intact, and it still excludes any geos from the additional Spring Valley coverage or the Murray Brook transactions, both of which now have closed. That outlook has contingency built in. One more thing on Malartic, because it frames how we think about everything we own. Agnico's update on the path to 1 million ounces is now expected in November, and their chief operating officer has publicly said that even at an expanded production rate, the life of mine could still extend out to 2060.

Speaker #2: Scoring ourselves against what we previously committed to, the 2026 guidance is on track. The 2030 outlook intact. And it's still excludes any geos from the additional Spring Valley coverage or the Murraybrook transactions, both of which now have closed.

Speaker #2: So that outlook has contingency built in. One more thing on Malartic, because it frames how we think about everything we own. Agneco's update on the path to 1 million ounces is now expected in November.

Speaker #2: And their chief operating officer has publicly said that even at an expanded production rate, the life of mine could still extend out to 2060.

Speaker #2: Before Jean Cernan climbed off the moon in 1972, who was the last man to walk on it, he wrote his daughter's initials in lunar dust.

Jason Attew: Before Gene Cernan climbed off the moon in 1972, who was the last man to walk on it, he wrote his daughter's initials in lunar dust. There's no atmosphere up there, they're still there today. A royalty and a great ore body works the same way. Mine plans get revised, pit walls get redesigned, operators may come and go. The ore body and our royalty on it doesn't move. The announcement of the wall movement changes our near-term geos, it changes nothing about what we own and our shareholders as well. Briefly across the rest of the portfolio, we received the first royalty payment from Dalgaranga this quarter, and at Namdini, our increased 2% royalty is becoming a significant contributor as the ramp-up hits its stride.

Speaker #2: Because there's no atmosphere up there, they're still there today. A royalty and a great ore body works the same way. Mine plans get revised.

Speaker #2: Pit walls get redesigned. Operators may come and go. The ore body and our royalty on it doesn't move. The announcement of the wall movement changes our near-term geos but it changes nothing about what we own.

Speaker #2: And our shareholders as well. Briefly across the rest of the portfolio, we received the first royalty payment from Dalgaranga this quarter. And at Nandini, our increased 2% royalty is becoming a significant contributor as the ramp-up hits its stride.

Speaker #2: Our portfolio currently boasts 23 producing assets, and the 24th producing asset should be Cabral Gold's Koiu project, Koiu Koiu project in Brazil. With commissioning still on schedule for the fourth quarter.

Jason Attew: Our portfolio currently boasts 23 producing assets, and the 24th producing asset should be Cabral Gold's Cuiú Project in Brazil, with commissioning still on schedule for the Q4. Slide eight lists the catalysts ahead on assets representing over half our NAV. The three I'd watch out are Harmony's fiscal 2027 guidance expected this month with an updated mineral resource estimate and life of mine plan to follow later in the year. Also, first gold at Amulsar in September, where our stream should begin accruing from first production ahead of its first payments expected in 2028, which is largely dependent on commodity price and the pace for which the operator, United Gold, pays back their loan. Finally, an update from Agnico on Canadian Malartic's future, now expected, as I said earlier, to be coming in November. On new business, the pipeline is active and our criteria have not moved.

Speaker #2: Slide 8 lists the catalysts ahead on assets representing over half our NAV. The three I'd watched out are Harmony's fiscal 2027 guidance expected this month with an updated mineral resource estimate and life of mine plan to follow later in the year.

Speaker #2: Also first gold at Almosar in September, where our stream should begin occurring from first production ahead of its first payments expected in 2028. Which is largely dependent on commodity price and the pace for which the operator, United Gold, pays back their loan.

Speaker #2: And finally, an update from Agneco and Canadian Malartic's future now expected as I said earlier to be coming in November. On new business, the pipeline is active, and our criteria haven't moved.

Speaker #2: No non-dilutive deals. We can afford that selectivity because our growth through 2030 is already bought and paid for with zero contingent capital. Beyond that, we don't comment on transactions until they're signed.

Jason Attew: No non-dilutive deals. We can afford that selectivity because our growth through 2030 is already bought and paid for with zero contingent capital. Beyond that, we don't comment on transactions until they're signed. I'd like to hand it over to Fred to talk about our financial results.

Speaker #2: I'd like to hand it over to Fred to talk about our financial results.

Speaker #1: Thank you, Jason, and good morning, everyone. Revenues for the quarter were 97.8 million, up from 60.4 million a year ago. A 62% growth on 5% more geos driven by realized prices of 4,504 dollars per ounce of gold and 70 dollars per ounce of silver.

Frédéric Ruel: Thank you, Jason, good morning, everyone. Revenues for the quarter were CAD 97.8 million, up from CAD 60.4 million a year ago, a 62% growth on 5% more GEOs, driven by realized prices of CAD 4,504 per ounce of gold and CAD 70 per ounce of silver. Cash Margin was CAD 94.7 million or 96.8% of revenues, up from CAD 57.8 million or 95.8% last year. Royalties, which carry essentially no cost, contributed CAD 62.8 million of revenue. Streams contributed CAD 35 million. Net earnings were CAD 61.4 million or CAD 0.33 per basic share against CAD 0.17 a year ago. Adjusted earnings were CAD 60.5 million or CAD 0.32 per share, up 78%. Cash flow from operations was CAD 83.2 million, up 62%, CAD 0.44 per share against CAD 0.27 last year. That per share line is the one we manage the business to.

Speaker #1: Cash margin was 94.7 million or 96.8% of revenues. Up from 57.8 million or 95.8% last year. Royalties, which carry essentially no cost, contributed 62.8 million of revenue.

Speaker #1: Streams contributed 35 million. Net earnings were 61.4 million or 33 cents per basic share, against 17 cents a year ago. Adjusted earnings were 60.5 million or 78%.

Speaker #1: Cash flow from operations was 83.2 million, up 62%. 44 cents per share, against 27 cents last year. And that per-share line is the one we manage the business to.

Speaker #1: Turning to the balance sheet, we ended June with 75.6 million of cash and 215 million drawn on decredit facility for a net debt position of 139 million.

Frédéric Ruel: Turning to the balance sheet, we ended June with CAD 75.6 million of cash and CAD 215 million drawn on the credit facility for a net debt position of CAD 139 million. The draw funded the Gold Fields and Spring Valley closings, we also repaid CAD 18 million on the credit facility during the quarter. On returns to shareholders, the board raised the quarterly dividend by 18.2% to CAD 6.50 per share in May, first paid on 15 July. Our 47th consecutive quarterly dividend, with approximately CAD 300 million returned to shareholders through dividends to date. A further CAD 6.50 dividend has been declared, payable 15 October. Under the Normal Course Issuer Bid, we repurchased over 225,000 shares for CAD 8 million during the quarter, a further approximately 1 million shares for CAD 29.1 million in July, a total of roughly 1.6 million shares repurchased and canceled year to date.

Speaker #1: The draw funded the gold fields and Spring Valley closings. And we also repaid 18 million on the credit facility during the quarter. On returns to shareholders, the board raised the quarterly dividend by 18.2% to 6.5 cents per share in May, first paid on July 15th.

Speaker #1: Our 47th consecutive quarterly dividend, with approximately 300 million returned to shareholders through dividends to date. And a further 6.5 cent dividend has been declared, payable October 15th.

Speaker #1: Under the normal course issuer bid, we repurchased over 225,000 shares, for 8 million during the quarter, and a further approximately 1 million shares for 29.1 million in July.

Speaker #1: A total of roughly 1.6 million shares repurchased and canceled year to date. Subsequent to quarter end, we also closed the 28 million Murraybrook precious metals stream with Canadian copper, together with a 4 million equity subscription.

Frédéric Ruel: Subsequent to quarter end, we also closed the CAD 28 million Murray Brook precious metals stream with Canadian Copper, together with a CAD 4 million equity subscription. The initial CAD 9 million was funded from cash on hand. Also in Q3, we expect to close the CAD 15 million extension of our royalty coverage at Chile's Costa Fuego to include the new La Verde discovery. Our capital allocation framework is unchanged. Returns to shareholders through the dividend and buybacks, as well as investment into precious metals royalties and streams, with ongoing debt repayment being considered normal course. All prioritized in whatever order creates the most net asset value per share. In H1, that meant new acquisitions.

Speaker #1: The initial 9 million was funded from cash on end. And also, in the third quarter, we expect to close the 15 million extension of our royalty coverage at a Chili's Costa Fuego to include the new La Verde discovery.

Speaker #1: Our capital allocation framework is unchanged, returns to shareholders through the dividend and buybacks as well as investment into precious metals royalties and streams, with ongoing debt repayment being considered normal course.

Speaker #1: All prioritized in whatever order creates the most net asset value per share. In the first half, that meant new acquisitions, in the second half, it could mean more opportunistic share repurchases and, as Jason mentioned, if we don't find an announced any accretive deals for our shareholders over this period, we'll look to reduce the debt drawn on our credit facility.

Frédéric Ruel: In H2, it could mean more opportunistic share repurchases, as Jason mentioned, if we don't find and announce any accretive deals for our shareholders over this period, we'll look to reduce the debt drawn on our credit facility. On this point, I'd like to flag that earlier this week, Gold Royalties, along with a syndicate of supporting banks, officially amended its revolving credit facility to increase the amount available from CAD 650 million to CAD 850 million, and the accordion from CAD 200 million to CAD 350 million. We also extended the maturity date from May 2029 to August 2030. Back to you, Jason.

Speaker #1: And on this point, I'd like to flag that earlier this week, all royalties along with a syndicate of supporting banks officially amended its revolving credit facility to increase the amount available from 650 million to 850 million in the accordion from 200 million to 350 million.

Speaker #1: We also extended the maturity date from May 2029 to August 2030.

Speaker #2: Back to you, Jason.

Speaker #3: Thank you, Fred. And with that, I'd like to thank. Thank you, Fred. And with that, I'd like to thank everyone for listening. We'll now open up the line for questions.

Jason Attew: Thank you, Fred. With that, I'd like to thank everyone for listening. We'll now open up the line for questions, as well as questions posted in the webcast. If we don't get to all the questions on the line, we'll make sure we respond offline. Back to you, Joelle.

Speaker #3: And as well as questions posted on the webcast. If we don't get to all the questions on the line, we'll make sure we'll respond offline.

Speaker #3: Back to you, Joelle.

Speaker #4: 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 touchstone phone.

Operator 2: 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 touch tone 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 keys. One moment, please, for your first question. Your first question comes from Cosmos Chiu with CIBC. Your line is now open.

Speaker #4: You will hear a prompt by your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the two.

Speaker #4: If you are using a speakerphone, please lift the handset before pressing any keys. One moment. Please for your first question. Your first question comes from Cosmos2 with CIBC.

Speaker #4: Your line is now open.

Speaker #3: Thanks. Thanks, Jason and team, for a very thorough presentation. Maybe my first question is on Egnico Yigo and Barnett Pitt. And thanks, Jason, for giving us a very detailed description of potential impact to OR royalties.

Cosmos Chiu: Thanks. Thanks, Jason and team, for a very thorough presentation. Maybe my first question is on Agnico Eagle and Barnat Pit. Thanks, Jason, for giving us a very detailed description of potential impact to OR Royalties. I guess my question is, as you pointed out, issues at the pit, Agnico Eagle share price came down and OR share price also came down in sympathy. I guess, any concerns about concentration risk? Canadian Malartic continues to be one of the largest or the largest royalty for your company, and it's going to grow in size and importance as it kind of channels towards 1 million ounces a year production. Again, how should we look at it in the context of OR Royalties and, as time progresses, any concerns about concentration risk?

Speaker #3: I guess my question is, as you pointed out, issues at the Pitt, Egnico Yigo share price came down and OR share price also came down in sympathy and I guess any concerns about concentration risk.

Speaker #3: Canadian Melodic continues to be one of the largest or the largest royalty for your company and it's going to grow in size. And importance as it kind of channels towards a million ounces a year production.

Speaker #3: So again, how should we look at it in the context of OR royalties and as time progresses, any concerns about concentration risk?

Speaker #5: Thank you, Kaz. That's a very good question and something certainly our board and ourselves discussed this week. So we wouldn't have thought a few weeks back that Egnico Eagle, who's got an exceptional reputation as an operator, very good operator, and they've really put on a masterclass as it relates to the Canadian Melartic, including the underground expansion.

Jason Attew: Thank you, Cos. It's a very good question and something certainly our board and ourselves discussed this week. We wouldn't have thought a few weeks back that Agnico Eagle, who's got an exceptional reputation as an operator, very good operator. They've really put on a master class as it relates to the Canadian Malartic, including the underground expansion. I mean, the Odyssey is the future of certainly our company and certainly, again, the journey to 1 million ounces for Agnico. We fully support, again, that operating group, that their operational acumen, their technical acumen, and the fact, again, this asset is in Quebec.

Speaker #5: I mean, the Odyssey is the future of certainly our company and certainly, again, the journey to 1 million ounces for Egnico. And we fully support, again, that operating group that they're operational acumen.

Speaker #5: They're technical acumen. And the fact, again, this asset is in Quebec. So the short answer, Cosmos, no, we don't have any sort of issues or concerns around concentration risk.

Jason Attew: The short answer, Cosmos, no, we don't have any sort of issues or concerns around concentration risk. The concentration in terms of our net asset value, as you would be aware, because in your model, it's around 25% to 30% of NAV, so it's not 50%, 60%, or what have you. We're yet incredibly comfortable, first, where the asset's located in Quebec, a very supportive regulatory environment, exceptional workforce, that's really endorsed, and the technical acumen of the Agnico team, we have just a tremendous amount of comfort over. Yes, what happened was unfortunate, but there's a reason why they actually do have these systems in place to ensure that with a large open pit, that any sort of rock mass movement is detected, and Agnico took all the precautionary steps, and obviously, as you heard in my comments and Agnico's comments last week, nobody was hurt.

Speaker #5: The concentration in terms of our net asset value as you would be aware because in your models around 25 to 30% of NAV. So it's not 50%, 60% or what have you.

Speaker #5: But we're getting incredibly comfortable as first where the assets located in Quebec, a very supportive regulatory environment, exceptional workforce. That's really endorsed and the technical acumen of the Egnico team.

Speaker #5: We have just a tremendous amount of comfort over. Yes, what happened was unfortunate. But the reason why they actually do have these systems in place to ensure that with a large open pit that any sort of rock mass movement is detected and Egnico took all the precautionary steps and obviously, as you heard in my comments, then Egnico's comments last week, nobody was hurt.

Speaker #5: And certainly they're working through right now, again, as I said, in what Egnico said last week, the focus will be on building berms, access roads, and assuring the safety of that pit when they go and reaccess it for mining go forward.

Jason Attew: Certainly, they're working through right now, again, as I said and what Agnico said last week, the focus will be on building berms, access roads, and ensuring the safety of that pit when they go and re-access it for mining go forward. The short answer is no, we don't have any real concerns or issues around concentration risk. This is the crown jewel in our portfolio, and as you rightly pointed out, as they make the journey to 1 million ounces, it is incrementally positive for our company. Excellent question. Thanks, Cosmo.

Speaker #5: So short answer is no, we don't have any real concerns or issues around concentration risk. This is the crown jewel in our portfolio. And as you rightly pointed out, as they make the journey to 1 million ounces, it is incrementally positive for our company.

Speaker #5: But excellent question. Thanks, Cosmo.

Speaker #3: Great. Thanks, Jason. And maybe switching gears a little bit, you touched on your longer-term guidance, your 2030 guidance, 120 to 135,000 ounces. And as you mentioned, that does not yet include spring valley.

Cosmos Chiu: Great. Thanks, Jason. Maybe switching gears a little bit, you touched on your longer term guidance, your 2030 guidance, 120,000 to 135,000 ounces. As you mentioned, that does not yet include Spring Valley, Murray Brook, and maybe some of the other more recent acquisitions as well. I guess, could you maybe, in words, qualitatively talk about how that could potentially change your five-year or your 2030 outlook? In terms of the actual numbers coming out, are we going to have to wait until, say, February 2027, before we get your updated longer term outlook?

Speaker #3: Murray Brook and maybe some of the other more recent acquisitions as well. So I guess, could you maybe in words, qualitatively talk about how that could potentially change or five-year or your 2030 outlook?

Speaker #3: And then in terms of the actual numbers coming out, are we going to have to wait until say February 2027 before we get your updated longer-term outlook?

Speaker #5: Yeah, another excellent question. Thank you, Cosmos. So again, yes, our process is we update the market once a year in February in terms of our five-year outlook.

Jason Attew: Yeah. Another excellent question. Thank you, Cosmo. Again, yes, our process is we update the market once a year in February in terms of our five-year outlook. Obviously, through that year, our corporate development team has done an exceptional job of putting more accretive assets into our portfolio that have not been reflected in the 2030. Things that you mentioned, such as our coverage to get to 6% NSR in Spring Valley, we think is going to be very incremental to that outlook go forward. Things like Murray Brook, again, we have a tremendous amount of time and respect for that operating group and very accretive deal for ourselves. As well as we're seeing some really good positive momentum within our portfolio. You know the story of Island Gold.

Speaker #5: Obviously, through that year, our corporate development team has done an exceptional job of putting more accretive assets into our portfolio that have not been reflected in the 2030.

Speaker #5: Things that you mentioned, such as our coverage to get to 6% NSR and spring valley, we think is going to be very incremental. To that outlook go forward.

Speaker #5: Things like Murray Brook, again, we have a tremendous amount of time and respect for that operating group and very accretive deal for ourselves. As well as we're seeing some really good positive momentum within our portfolio, you know the story of Island Gold, Nandini has also becoming a very good cornerstone royalty for us as, again, you would know that we picked up another sister royalty or another going from 1 to 2% in that asset.

Jason Attew: Namdini is also becoming a very good cornerstone royalty for us, as again, you would know that we picked up another, the sister royalty or another going from 1% to 2% in that asset. Yes, portfolio is growing, as you know and you commented on. We've got the best five-year outlook with no contingent capital associated. When we do go and give our 2031 guidance in February, it will include a lot of the corporate development activity and activity that we see from positive developments with respect to our development assets.

Speaker #5: So yes, portfolio is growing as you know and you've commented on, we've got the best five-year outlook with no contingent capital associated. When we do go and give our 2031 guidance in February, it will include a lot of the corporate development activity and activity that we see from positive developments with respect to our development assets.

Speaker #3: Thanks, Jason. And maybe one last question, you've made an incremental acquisition at Hot Chili. Extending your 1% copper and 3% gold royalties to the La Verde project.

Cosmos Chiu: Thanks, Jason. Maybe one last question, you've made an incremental acquisition at Hot Chili, extending your 1% copper and 3% gold royalties to the La Verde project. Could you maybe just quickly educate us, or at least me, in terms of how the La Verde project compares to the main deposit, and what's the potential upside here? Better yet, if you can quantify it for me, that would be great.

Speaker #3: Could you maybe just quickly educate us or at least me in terms of how the La Verde project compares to the main deposit and what's the potential upside here?

Speaker #3: And better yet, if you can quantify it for me, that would be great.

Speaker #5: Yeah, I'm going to hand it over to Guy, who's going to give you obviously, he was the person that advocated for this on the geology and the prospectivity.

Jason Attew: I'm going to hand it over to Guy, who's going to give you, obviously he was the person that advocated for this, on the geology and the prospectivity. Go ahead, Guy.

Speaker #5: Go ahead, Guy.

Speaker #6: Hey, Cosmo. Thanks for asking that question. So I'll first point you towards what Hot Chili has been saying about the asset. Unfortunately, the public doesn't have a very clear view of what that asset can be because they don't yet have a fulsome resource estimation, whereas the rest of the project has a PFS.

Guy Desharnais: Hey, Cosmo. Thanks for asking that question.

Cosmos Chiu: Hi, Guy.

Cosmos Chiu: I'll first point you towards what Hot Chili has been saying about the asset. Unfortunately, the public doesn't have a very clear view of what that asset can be because they don't yet have a fulsome resource estimation, whereas the rest of the project has a PFS. They're being very active in terms of the drilling right now to prove up the resources on that, and following the initial resource, quickly get into some economic studies to enable a more fulsome picture of the three different deposits that will make up that central processing unit. What I'll say, though, is that if you look at the best drill holes at La Verde, they're quite similar to the best drill holes at Cordillera.

Speaker #6: They're being very active in terms of the drilling right now to prove up the resources on that, and following the initial resource, they'll quickly get into some economic studies to enable a more fulsome picture of the three different deposits that will make up that central processing unit.

Speaker #6: What I'll say, though, is that if you look at the best drill holes at La Verde, they're quite similar to the best drill holes at Cordadera.

Speaker #6: And in terms of scale, it's hard to map out, but it'll be a significant contributor. And I think there's a chance that La Verde would be the first of the three deposits to go into production.

Guy Desharnais: In terms of scale, it's hard to map out, but it'll be a significant contributor, and I think there's a chance that La Verde would be the first of the three deposits to go into production. We'll see. They're very active right now. The most recent drill holes are pretty impressive, so I'll have you go back and look at some of their disclosures.

Speaker #6: But we'll see. They're drilling, they're very active right now. The most recent drill holes are pretty impressive. So I'll have you go back and look at some of their disclosures.

Speaker #3: Great. Thanks, Guy. For a very fulsome answer. And thanks, Jason, for answering all my questions. That's all I have. Thank you.

Cosmos Chiu: Great. Thanks, Guy, for a very fulsome answer, and thanks, Jason, for answering all my questions. That's all I have. Thank you.

Speaker #5: Thanks, Cosmo. Enjoy the rest of your summer.

Jason Attew: Thanks, Cosmo. Enjoy the rest of your summer.

Speaker #1: Your next question comes from Tanya Jacostonic with Scotiabank. Your line is now open.

Operator 2: Your next question comes from Tanya Jakusconek with Scotiabank. Your line is now open.

Speaker #7: Oh, great. Good morning, everybody. Thank you so much for taking my questions. Just going to start, Jason, just finishing off on the guidance. Thank you for sharing that week or second half versus the first half or lower second half versus the first half.

Tanya Jakusconek: Oh, great. Good morning, everybody. Thank you so much for taking my questions. Just going to start, Jason, just finishing off on the guidance. Thank you for sharing that weaker H2 versus the H1 or lower H2 versus the H1. Originally, it had been that the rest of quarters were going to be evenly distributed. With the removal of the ounces from the Canadian Malartic open pit, should I still be thinking that Q3 and Q4 should be similar?

Speaker #7: Originally, it had been that the rest of the quarters were going to be evenly distributed. So with the removal of the ounces from the Canadian Malartic open pits, should I still be thinking that Q3 and Q4 should be similar?

Speaker #5: Yeah, excellent question. Thank you for that, Tanya. So what I would say, and we obviously don't give quarterly guidance. We give annual guidance, but we did socialize the fact that prior to the rock mass fall at Barnett Pit, we essentially, as you pointed out, our distribution from H1 to H2 was approximately the same.

Jason Attew: Yeah. Excellent question. Thank you for that, Tanya. What I would say, and we obviously don't give quarterly guidance, we give annual guidance, but we did socialize the fact that prior to the rock mass fall at Barnat Pit, we essentially, as you pointed out, our distribution from H1 to H2 was approximately the same. What you can think of is, again, given Barnat in particular is such a good contributor for our asset base and for our geos, as I mentioned earlier, Q3 is going to be, from an activity perspective, focused on creating berms, access roads, again, safety at site before they start accessing to re-renew mining in Q4. You can think modestly, I would say modestly lower in Q3 with certainly some potential tailwinds that we'll see in Q4, especially with the ramp-ups, as I mentioned earlier, at Dalgaranga, Namdini, and those sort of assets.

Speaker #5: What you can think of is, again, given Barnett in particular in such a good contributor for our asset base and for our geos, as I mentioned earlier, Q3 is going to be from an activity perspective, focused on creating berms, access roads, again, safety at site before they start accessing to renew mining in Q4.

Speaker #5: So you can think modestly, I would say modestly lower in Q3 with some certainly some potential tailwinds that we'll see in Q4, especially with the ramp-ups as I mentioned earlier at Dalgaranga and Nandini and those sort of assets Q4 will be I would say modestly stronger than Q3.

Jason Attew: Q4 will be, I would say, modestly stronger than Q3. At the end of the day, as I said earlier, we were tracking essentially H1 to H2, essentially around the same amount or equal amount of GEOs, you have to just subtract obviously of the 3,500 that we don't expect to receive in this 2026 calendar year. I hope that provides some clarity for you.

Speaker #5: But at the end of the day, as I said, earlier, we were tracking essentially H1 to H2, essentially around the same amount or equal amount of geos and then you have to just subtract obviously of the 3,500 that we don't expect to receive in this 2026 calendar year.

Speaker #5: I hope that provides some clarity for you.

Speaker #7: Yeah, no, no, that's fine. Thank you. And then I just wanted to circle back on the debt I know it was commented that we've got this debt outstanding.

Tanya Jakusconek: Yeah. No, that's fine. Thank you. I just wanted to circle back on the debt. I know it was commented that we've got this debt outstanding. How should we be thinking about balancing the debt reduction, assuming no other deals, let's say assuming no other transactions are completed. Should we be thinking that this is, besides paying the dividends and maybe some opportunistic share buyback. Would the priority be to sort of reduce this dividend in 2027? By 2027? The debt.

Speaker #7: How should we be thinking about balancing the debt reduction assuming no other deals that say assuming no other transactions are completed? Should we be thinking that this is besides paying off the providing the dividends and maybe some opportunistic share buybacks, would the priority be to sort of reduce this dividend in 2027?

Speaker #7: By '27? The debt?

Speaker #5: And you said reduce the dividend or reduce the debt in 2027? You reduce the debt. So look, I think you're absolutely on point. From a capital allocation perspective, our job as a management team is essentially put a creative assets into the portfolio for our shareholders.

Jason Attew: You said reduce the dividend-

Tanya Jakusconek: Okay

Jason Attew: or reduce the debt by 2027? You reduce the debt. Look, I think you're absolutely on point. From a capital allocation perspective, our job as a management team is essentially put accretive assets into the portfolio for our shareholders. That's obviously our first priority. We are generating, as you saw on an adjusted EBITDA rate basis, we can get these commodity prices close to CAD 90 million per quarter. That obviously is a very good run rate for us to pay down debt, obviously our business is to do accretive transactions. It's very normal course, as you know, across all our sectors. This is our model where we dip into a revolver and then pay it back with cash flow over time. It's very normal course activity.

Speaker #5: That's obviously our first priority. We are generating, as you saw on our adjusted EBITDA run-rate basis, and with these commodity prices, close to $90 million U.S. per quarter.

Speaker #5: So that obviously is a very good run rate for us to pay down debt, but obviously our business is to do a creative transactions.

Speaker #5: And so it was very normal course as you know across all our sectors. This is our model where we dip into a revolver and then pay it back with cash flow over time.

Speaker #5: So it's very normal course activity. Can you think that we will continue to reduce the 215 million that you see on our June 30th balance sheet?

Jason Attew: Can you think that we will continue to reduce the CAD 215 million that you see on our 30 June balance sheet? All that said, obviously, if we see accretive deals, we have the capacity, as Fred mentioned, we've increased our facility significantly here because we do see quite a bit of opportunities out there in terms of their opportunity set or pipeline. Lastly, again, we believe there was a significant misprice when obviously the event that happened in Barnat, and we acted very quickly to buy back shares. That's all based on a NAV per share framework. We are constantly looking at it. We could be opportunistic around buying shares back in the future if we again see a significant misprice dislocation in the marketplace is what we think the fundamental intrinsic value of our company is versus what's quoted in the marketplace.

Speaker #5: All that said, obviously if we see creative deals, we have the capacity. As Fred mentioned, we've increased our facility significantly here because we do see quite a bit of opportunities out there in terms of the opportunity set or pipeline.

Speaker #5: And then lastly, again, there was we believe there was a significant misprice when obviously the event that happened in Barnett and we acted very quickly to buy back shares.

Speaker #5: And that's all based on a NAV per share framework. We are constantly looking at it. So we could be opportunistic around buying shares back in the future if we, again, see a significant misprice dislocation in the marketplace as what we think the fundamental intrinsic value of our company is versus what's quoted in the marketplace.

Speaker #5: But to answer the question, yeah, normal course is just to pay down debt as we generate cash flow, but obviously rating and ranking creative acquisitions, if we see good creative acquisitions, for our shareholders, we'll step in and do that and fund it with debt.

Jason Attew: To answer the question, normal course is just to pay down debt, as we generate cash flow, obviously, rating and ranking accretive acquisitions. If we see good accretive acquisitions for our shareholders, we'll step in and do that and fund it with debt. I don't know, Fred, if you wanted to add anything further.

Speaker #5: I know Fred, if you wanted to add anything further.

Speaker #4: No.

Frédéric Ruel: No.

Speaker #7: Okay. Then Jason, just keeping on the transaction front, maybe we can talk about whether this Canadian Malartic, the open pit overburden and the failure of the North Wall into the pit, has changed your focus for transactions. In the type that maybe you're looking now more for transactions that add immediate production, or has anything changed there?

Tanya Jakusconek: Okay. Jason, just keeping on the transaction front. Maybe we can talk about whether this Canadian Malartic, the open pit overburden and failure of the north wall into the pit has changed your focus for transactions in the type that maybe you're looking now more for transactions that add immediate production, or has anything changed there?

Speaker #5: Again, excellent question, Tanya. So our focus or criteria around acquisitions have always been and I think most folks or most of our competitors are producing assets.

Jason Attew: Excellent question, Tanya. Our focus or criteria around acquisitions have always been, I think most folks and most of our competitors are producing assets. Absent that, certainly our second big filter is assets in development or expansions that would actually provide us GEOs within our five-year outlook. Those are the two big criteria that we look at and spend, I'd say, 90% of our time from a corporate development perspective looking at. That hasn't changed. Obviously, again, it all comes down to value, and we just want to make sure that we're doing transactions that are not only smart transactions, but accretive transactions for our owners.

Speaker #5: And absent that, certainly our second big filter is assets in development or expansions that would actually provide us geos within our five-year outlook. Those are the two big criteria that we look at and spend, I'd say, 90% of our time from a corporate development perspective looking at.

Speaker #5: So that hasn't changed. Obviously, again, it all comes down to value. And we just want to make sure that we're doing transactions that are not only smart transactions, but are creative transactions for owners.

Speaker #7: And are you seeing still the typical size of that 50 to 300 million that we talked about in Q1? And is it still in tier one jurisdiction that you're focusing on?

Tanya Jakusconek: Are you seeing still the typical size of that CAD 50 to 300 million that we talked about in Q1?

Jason Attew: Yeah

Tanya Jakusconek: Still in the Tier 1 jurisdictions that you're focusing on?

Speaker #5: Yeah, our big filter is tier one jurisdictions, Canada, the US, and Australia. I would say the ticket size in terms of what we're seeing in terms of the flow right now is increased.

Jason Attew: Yeah, our big filter is Tier 1 jurisdictions, Canada, the US, and Australia. I would say the ticket size, in terms of what we're seeing in terms of the flow right now, is increased. We're seeing some very large transactions come to the market that I know that all five of the major, including ourselves, as royalty and streaming companies, are looking at. I would offer to say that there's billion-dollar transactions out there, as well as kind of CAD 500 to 700 million that we're all taking a very close look at.

Speaker #5: We're seeing some very large transactions come to the market that I know that all five of the major including ourselves royalty and streaming companies are looking at.

Speaker #5: So I would offer to say that there's billion-dollar transactions out there as well as kind of 500 to 700 million that we're all taking a very close look at.

Speaker #7: And with those be in the gold and silver?

Tanya Jakusconek: Would those be in the gold and silver?

Speaker #5: Yeah, they're precious metals.

Jason Attew: Yeah, they're precious metals.

Tanya Jakusconek: Precious metals, yeah. Okay. We'll look forward to putting that capital to use. Thank you so much for taking my question.

Speaker #7: Precious metals, yeah. Okay. We'll look forward to putting that capital to use. Thank you so much for taking my questions.

Speaker #5: Thanks, Tanya. Appreciate your questions and your time.

Jason Attew: Thanks, Tanya. Appreciate your questions and your time.

Speaker #1: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Derek Mawitide Cowan. Your line is now open.

Operator 2: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Derek Macpherson, TD Cowen. Your line is now open.

Speaker #8: Thank you. And thank you for the update on Amal Sar. It's been a long road for that asset. You provide an update on how construction is progressing there, and how United Gold has addressed some of those historic social environmental concerns?

Derek Macpherson: Thank you, thank you for the update on Amulsar. It's been a long road for that asset. Could you provide an update on how construction is progressing there and how United Gold has addressed some of those historic social, environmental concerns?

Speaker #5: Yes. So I'm going to ask Brendan Pidcock, who's our technical services expert, who actually visited the site a year ago, correct? He'll give you an update because he's following it quite closely.

Jason Attew: Yeah. I'm going to ask Brendan Pidcock, who's our technical services expert, who actually visited the site a year ago, correct? He'll give you an update because he's following it quite closely.

Speaker #9: Yeah, thanks. Yeah, so Mustafa and another colleague went and visited about 12 months ago. So the United team have done exceptional job there. And they're tracking on budget more or less in terms of time and cost.

Brendan Pidcock: Yeah. Thanks. Yeah, myself and another colleague went and visited about 12 months ago. The United team has done an exceptional job there. They're tracking on budget more or less in terms of time and cost. The latest messaging coming out of them is first production mid-September, then ramping up to full production probably H1 of next year. Honestly, given the history of that project in terms of social challenges and challenges that are more immediate in terms of the geopolitics and all the rest of it, hats off to that team, really. They've done an exceptional job in terms of multiple redundancies and yeah, I can't say enough about them, really. It's a good problem for us to have at the moment.

Speaker #9: The latest messaging coming out of them is first production mid-September. And then ramping up to full production probably first half of next year. Honestly, given the history of that project in terms of social challenges and challenges in more immediate in terms of the geopolitics and all the rest of it, hats off to that team really.

Speaker #9: They've done exceptional job in terms of multiple redundancies and yeah, I can't say enough about them really. So it's a good problem for us to have at the moment.

Jason Attew: Just further to that, Derek, as I think you appreciate and know, as they start producing gold ounces, those ounces will be accrued for us. The CAD 150 million loan that they got from the Armenian government has to get paid back first before we actually start seeing realized geos or start getting payments in terms of, again, what will hit our financial statements. That, again, I think anyone can do the math as they ramp up. As I said in the script earlier, we expected 2028. If we do have some very robust commodity price, that could come late 2027. We're very pleased. Obviously, it's an asset that's gone through a workout.

Speaker #5: And just further to that, Derek, as I think you appreciate and know as they start producing gold and assets, those ounces will be accrued for us.

Speaker #5: The 150 million dollar loan that they got from the Armenian government has to get paid back first before we actually start seeing realized geos.

Speaker #5: Or start getting payments in terms of again, what will hit our financial statements. And that, again, I think anyone can kind of do the math as they ramp up.

Speaker #5: As I said, in the script earlier, we expected 2028, but if we do have some very robust commodity price that could come late 2027.

Speaker #5: So we're very pleased, obviously, it's an asset that's gone through a workout. It's obviously had some historic challenges getting up and going, but we have a lot of confidence in this United Gold Group.

Jason Attew: It's obviously had some historic challenges getting up and going, but we have a lot of confidence in this United Gold group, and it will be a significant contributor to us 2028, 2029, because obviously those accrued ounces will get, I don't know if you know formulaic, they get paid back over a maximum 5-year period. Again, a very good contributor for us at the late end of this decade.

Speaker #5: And it will be a significant contributor to us in 2028 and 2029 because, obviously, those accrued ounces will get—I don't know if you know the formula—they get paid back over a maximum five-year period.

Speaker #5: So again, a very good contributor for us at the late end of this decade.

Speaker #8: Got it. No, it'd be a great contributor for sure. And sorry, just clarifying on that lump sum payment, not lump sum, the accumulated ounces that those so you have a five-year period where you have elevated deliveries?

Derek Macpherson: Got it. No, it'd be a great contributor for sure. Sorry, just clarifying on that lump sum payment, not lump sum, the accumulated ounces that, you have a 5-year period where you have elevated deliveries? Is that correct?

Speaker #8: Is that correct?

Speaker #5: It gets spread out over five years, yes, correct. That's correct. So we'll accrue them until again, the 150 million dollar loan is paid back.

Jason Attew: It gets spread out over 5 years. Yes, correct. That's correct. We'll accrue them until, again, the CAD 150 million loan is paid back, and then those accrued ounces will get paid over 5 years. That's correct.

Speaker #5: And then it gets paid over that those accrued ounces will get paid over five years. That's correct.

Speaker #8: And your own loan gets paid back at that point in time as well? You have a small loan.

Derek Macpherson: Your own loan gets paid back at that point in time as well? You have a small loan.

Jason Attew: Yes, that's correct.

Speaker #5: Yes, that's correct. That's right. Yeah.

Derek Macpherson: as well, right? Yeah. Okay.

Jason Attew: That's right.

Speaker #8: That's it for me. Thank you.

Derek Macpherson: That's it for me.

Jason Attew: Yeah.

Derek Macpherson: Thank you.

Speaker #5: Thanks, Derek. Enjoy your summer.

Jason Attew: Thanks, Derek. Enjoy your summer.

Speaker #1: There are no further questions at this time. I will now turn the call over to management for closing remarks.

Operator 2: There are no further questions at this time. I will now turn the call over to management for closing remarks.

Speaker #5: Great. Thank you very much, Joelle. I really appreciate everybody's time and energy. I do understand that it's a very busy day in terms of earnings, but thank you for your time.

Jason Attew: Great. Thank you very much, Joelle. Look, really appreciate everybody's time and energy. I do understand that it's a very busy day in terms of earnings. Thank you for your time, and we look forward to doing this again in November. In the interim, enjoy the summer for everybody. Thank you very much.

Speaker #5: And we look forward to doing this again in November and for in the interim, enjoy the summer for everybody. Thank you very much.

Operator 2: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.