Record cash margin of
Operating cash flows from the royalties and streams segment of
Q1 2022 Financial Highlights
- 18,251 GEOs1 earned (Q1 2021 – 19,960 GEOs);
- Consolidated revenues of
$59.4 million ($66.9 million in Q1 2021);- Revenues from the royalties and streams segment2 of
$50.7 million ($66.9 million in Q1 2021, including$17.9 million from offtakes); - Revenues from the mining exploration and development segment3 (i.e. Osisko Development Corp.) of
$8.7 million (net of intersegment transactions);
- Revenues from the royalties and streams segment2 of
- Consolidated cash flows from operating activities of
$23.6 million (Q1 2021 –$21.3 million );- Operating cash flows from the royalties and streams segment of
$40.5 million (Q1 2021 –$36.7 million ); - Operating cash flows from the mining exploration and development segment of (
$16 .9) million (Q1 2021 – ($15.4) million) ;
- Operating cash flows from the royalties and streams segment of
- Cash margin4 of 94% from royalties and streams (Q1 2021 – 94%);
- Consolidated net earnings attributable to Osisko’s shareholders of
$0.3 million , or$0.00 per share (Q1 2021 –$10 .6 million or$0.06 per basic share); - Consolidated adjusted earnings4 of
$2.2 million , or$0.01 per basic share (Q1 2021 –$17 .9 million,$0.11 per basic share);- Adjusted earnings from the royalty and stream segment of
$24.8 million , or$0.15 per basic share (Q1 2021 –$23.4 million , or$0.14 per basic share); and - Adjusted loss from the mining exploration and development segment of
$22.7 million , or$0.14 per basic share (Q1 2021 –$5.5 million , or$0.03 per basic share).
- Adjusted earnings from the royalty and stream segment of
Given the current inflationary market dynamics, both globally and specific to the mining sector, we feel Osisko offers a compelling value and growth investment, which is not subject to many of the same inflationary risks.”
Financial Highlights by Operating Segment
(in thousands of dollars, except per share amounts)
As a result of its 70% ownership in Osisko Development Corp. (“Osisko Development”), the assets, liabilities, results of operations and cash flows of the Company consolidate the activities of Osisko Development and its subsidiaries. The table below provides some financial highlights per operating segment. More information per operating segment can be found in the consolidated financial statements and management’s discussion and analysis for the three months ended
For the three months ended | ||||||||||||
Osisko Development (ii) | Consolidated (v) | |||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Cash ( | 392,648 | 82,291 | 56,802 | 33,407 | 449,450 | 115,698 | ||||||
Revenues | 50,689 | 66,923 | 9,167 | - | 50,689 | 66,923 | ||||||
Cash margin (iii) | 47,508 | 46,526 | - | - | 47,508 | 46,526 | ||||||
Gross profit | 36,210 | 34,599 | - | - | 36,210 | 34,599 | ||||||
Operating expenses (G&A, bus. dev and exploration) | (6,257 | ) | (6,029 | ) | (7,928 | ) | (5,201 | ) | (14,185 | ) | (11,230 | ) |
Mining operating expenses | - | - | (15,246 | ) | - | - | - | |||||
Net earnings (loss) | 16,804 | 13,464 | (22,333 | ) | (3,701 | ) | (5,529 | ) | 9,763 | |||
Net earnings (loss) attributable to Osisko’s shareholders | 16,804 | 13,464 | (16,478 | ) | (2,907 | ) | 326 | 10,557 | ||||
Net earnings (loss) per share attributable to Osisko’s shareholders | 0.10 | 0.08 | (0.10 | ) | (0.02 | ) | 0.00 | 0.06 | ||||
Adjusted net earnings (loss) (iv) | 24,843 | 23,439 | (22,670 | ) | (5,042 | ) | 2,173 | 18,397 | ||||
Adjusted net earnings (loss) per basic share (iv) | 0.15 | 0.14 | (0.14 | ) | (0.03 | ) | 0.01 | 0.11 | ||||
Cash flows from operating activities | ||||||||||||
Before working capital items | 39,892 | 39,540 | (17,269 | ) | 2,422 | 22,623 | 36,252 | |||||
Working capital items | 615 | (2,802 | ) | 372 | (12,126 | ) | 987 | (14,928 | ) | |||
After working capital items | 40,507 | 36,738 | (16,897 | ) | (9,704 | ) | 23,610 | 21,324 | ||||
Cash flows from investing activities | (15,586 | ) | (13,781 | ) | 3,314 | (21,708 | ) | (12,272 | ) | (29,779 | ) | |
Cash flows from financing activities | 285,528 | (7,511 | ) | 37,137 | 35,613 | 322,665 | 28,102 |
(i) | |
(ii) | Osisko Development Corp. and its subsidiaries. Represents the exploration, evaluation and development of mining projects segment. |
(iii) | Cash margin is a non-IFRS financial performance measure for the royalties and streams segment which has no standard definition under IFRS. It is calculated by deducting the cost of sales (excluding depletion) from the. Please refer to the Non-IFRS Financial Performance Measures section of the MD&A for the three months ended |
(iv) | Adjusted earnings (loss) and adjusted earnings (loss) per basic share are non-IFRS financial performance measures which have no standard definition under IFRS. Refer to the non-IFRS measures provided under the Non-IFRS Financial Performance Measures section of the Company’s MD&A for the three months ended |
(v) | Consolidated results are net of the intersegment transactions. Refer to the Segment Disclosure section of the Company’s MD&A for the three months ended |
Other Highlights
- Bought deal public offering of 18,600,000 common shares at a price of
US$13.45 per common share for total gross proceeds ofUS$250.2 million ; - As a result of Stornoway Diamonds Canada Inc.’s (“Stornoway”) improved financial position, the Renard stream was reactivated at the end of April. Stornoway’s cost reductions, coupled with strengthening diamond prices resulted in positive cash generation at Renard over 2021;
- In
January 2022 , Osisko Development entered into definitive agreements to acquire 100% ofTintic Consolidated Metals LLC (“Tintic”).Osisko Bermuda Limited (“Osisko Bermuda”) entered into a non-binding metals stream term sheet with a wholly-owned subsidiary of Osisko Development, which included an upfront deposit of between US$20 million andUS$40 million . In the event that the fullUS$40 million upfront deposit is utilized, Osisko Development will deliver to Osisko Bermuda 5% of all metals produced from the Tintic property until 53,400 ounces of refined gold have been delivered and 4.0% thereafter; - Osisko Development closed private placements during the quarter for aggregate gross proceeds of approximately
$251 million . To date, the company has received gross proceeds of$42 .4 million. The remainder of the funds are held in escrow and will be released upon certain conditions, including completion of the listing on the common shares on theNew York Stock Exchange and closing of the Tintic acquisition; - Repayment in full of the outstanding revolving credit facility in
April 2022 for$112.5 million ; - Publication in April of the inaugural Asset Handbook and the second edition of the environmental, social and governance (“ESG”) report, Growing Responsibly; and
- Declared a quarterly dividend of
$0.055 per common share payable onJuly 15, 2022 to shareholders of record as of the close of business onJune 30, 2022 .
Q1 2022 Results Conference Call Details
Conference Call: | |
Dial-in Numbers: | North American Toll-Free: 1 (888) 440-2180 Local and International: 1 (438) 803-0536 Access code: 1981388 |
Replay (available until | North American Toll-Free: 1 (800) 770-2030 Local and International: 1 (647) 362-9199 Access code: 1981388 |
Replay also available on our website at www.osiskogr.com |
Qualified Person
The scientific and technical content of this news release has been reviewed and approved by
About
Osisko’s head office is located at 1100 Avenue des Canadiens-de-
For further information, please contact
Vice President, Investor Relations
Tel. (514) 940-0670 x105
htaylor@osiskogr.com
Notes:
(1) | Gold Equivalent Ounces |
GEOs are calculated on a quarterly basis and include royalties, streams and offtakes. Silver earned from royalty and stream agreements are converted to gold equivalent ounces by multiplying the silver ounces earned by the average silver price for the period and dividing by the average gold price for the period. Diamonds, other metals and cash royalties are converted into gold equivalent ounces by dividing the associated revenue earned by the average gold price for the period. Offtake agreements are converted using the financial settlement equivalent divided by the average gold price for the period. |
Average Metal Prices and Exchange Rate
Three months ended | |||
2022 | 2021 | ||
Gold(i) | |||
Silver(ii) | |||
Exchange rate (US$/Can$)(iii) | 1.2662 | 1.2626 |
(i) The London Bullion Market Association’s pm price in
(ii) The London Bullion Market Association’s price in
(iii) Bank of
(2) | The royalties and streams segment refers to the royalty, stream and other interests segment, which corresponds to the activities of |
(3) | The mining exploration and development segment refers to the mining exploration, evaluation and development segment, which corresponds to the activities of Osisko Development Corp. and its subsidiaries. |
(4) | Non-IFRS Measures |
The Company has included certain performance measures in this press release that do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS) including (i) cash margin (in dollars and in percentage) for the royalties and streams segment, (ii) adjusted earnings (loss) and (iii) adjusted earnings (loss) per share. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. As Osisko’s operations are primarily focused on precious metals, the Company presents cash margins and adjusted earnings as it believes that certain investors use this information, together with measures determined in accordance with IFRS, to evaluate the Company’s performance in comparison to other companies in the precious metals mining industry who present results on a similar basis. However, other companies may calculate these non-IFRS measures differently. |
Cash Margin (in dollars and in percentage of revenues)
Cash margin (in dollars) represents revenues from the royalties and streams segment less cost of sales (excluding depletion). Cash margin (in percentage of revenues) represents the cash margin (in dollars) divided by revenues from the royalties and streams segment.
Three months ended | |||||
2022 | 2021 | ||||
$ | $ | ||||
Royalty and stream interests | |||||
Total Revenues | 59,398 | 66,923 | |||
Less: Revenues from mining activities (Osisko Development) | (8,709 | ) | - | ||
Less: Revenues from offtake interests | - | (17,926 | ) | ||
Revenues from royalty and stream interests | 50,689 | 48,977 | |||
Total Cost of sales | (11,162 | ) | (20,397 | ) | |
Less: Cost of sales from mining activities (Osisko Development) | (7,981 | ) | - | ||
Less: Cost of sales from offtake interests | - | 17,239 | |||
Cost of sales of royalty and stream interests | (3,181 | ) | (3,158 | ) | |
Revenues from royalty and stream interests | 50,689 | 48,977 | |||
Less: Cost of sales of royalty and stream interests | (3,181 | ) | (3,158 | ) | |
Cash margin (in dollars) - royalty and stream interests | 47,508 | 45,819 | |||
Cash margin (in percentage of revenues) - royalty and stream interests | 94 | % | 94 | % | |
Royalty and stream interests (excluding the Renard diamond stream) | |||||
Revenues from royalty and stream interests | 50,689 | 48,977 | |||
Less: Revenues from the Renard diamond stream | (7,190 | ) | (3,995 | ) | |
Revenues from royalty and stream interests, excluding the Renard diamond stream | 43,499 | 44,982 | |||
Cost of sales from royalty and stream interests | (3,181 | ) | (3,158 | ) | |
Less: Cost of sales from the Renard diamond stream | 2,023 | 1,718 | |||
Cost of sales of royalty and stream interests, excluding the Renard diamond stream | (1,158 | ) | (1,440 | ) | |
Revenues from royalty and stream interests, excluding the Renard diamond stream | 43,499 | 44,982 | |||
Less: Cost of sales of royalty and stream interests, excluding the Renard diamond stream | (1,158 | ) | (1,440 | ) | |
Cash margin (in dollars) | 42,341 | 43,542 | |||
Cash margin (in percentage of revenues) | 97 | % | 97 | % | |
Offtake interests | |||||
Revenues from offtake interests | - | 17,926 | |||
Less: Cost of sales of offtake interests | - | (17,239 | ) | ||
Cash margin (in dollars) | - | 687 | |||
Cash margin (in percentage of revenues) | - | 4 | % |
Adjusted earnings (loss) and adjusted earnings (loss) per basic share
Adjusted earnings (loss) is defined as: net earnings (loss) adjusted for certain items: foreign exchange gain (loss), impairment of assets (including impairment on financial assets and investments in associates), gains (losses) on disposal of exploration and evaluation assets, unrealized gain (loss) on investments, share of loss of associates, deferred premium income on flow-through shares, deferred income tax expense (recovery), transaction costs and other items such as non-cash gains (losses).
Adjusted earnings (loss) per basic share is obtained from the adjusted earnings (loss) divided by the weighted average number of common shares outstanding for the period.
For the three months ended | ||||||||||||
2022 | 2021 | |||||||||||
Osisko Gold Royalties (i) | Osisko Development (ii) | Consolidated | Osisko Gold Royalties (i) | Osisko Development (ii) | Consolidated | |||||||
(in thousands of dollars, except per share amounts) | $ | $ | $ | $ | $ | $ | ||||||
Net earnings (loss) | 16,804 | (22,333 | ) | (5,529 | ) | 13,464 | (3,701 | ) | 9,763 | |||
Adjustments: | ||||||||||||
Impairment of assets | 520 | - | 520 | 4,400 | - | 4,400 | ||||||
Foreign exchange (gain) loss | (876 | ) | (524 | ) | (1,440 | ) | 29 | 744 | 773 | |||
Unrealized loss (gain) on investments | 5,840 | 228 | 6,068 | 1,389 | (1,310 | ) | 79 | |||||
Share of loss of associates | (2,604 | ) | 331 | (2,273 | ) | (375 | ) | 407 | 32 | |||
Deferred premium income on flow-through shares | - | (341 | ) | (341 | ) | - | (469 | ) | (469 | ) | ||
Deferred income tax expense (recovery) | 5,159 | (31 | ) | 5,128 | 4,532 | (1,182 | ) | 3,350 | ||||
Adjusted earnings (loss) | 24,843 | (22,670 | ) | 2,173 | 23,439 | (5,511 | ) | 17,928 | ||||
Weighted average number of common shares outstanding (000’s) | 166,926 | 166,926 | 166,926 | 165,842 | 165,842 | 165,842 | ||||||
Adjusted earnings (loss) per basic share | 0.15 | (0.14 | ) | 0.01 | 0.14 | (0.03 | ) | 0.11 |
(i) | |
(ii) | Osisko Development Corp. and its subsidiaries. Represents the mining exploration, evaluation and development segment. |
Forward-looking Statements
Certain statements contained in this press release may be deemed "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements in this press release, forward-looking statements are statements other than statements of historical fact, that address, without limitation, future events, production estimates of Osisko’s assets (including increase of production), timely developments of mining properties over which Osisko has royalties, streams, offtakes and investments, management’s expectations regarding Osisko’s growth, results of operations, estimated future revenues, production costs, carrying value of assets, ability to continue to pay dividend, requirements for additional capital, business prospects and opportunities future demand for and fluctuation of prices of commodities (including outlook on gold, silver, diamonds, other commodities) currency markets and general market conditions. In addition, statements and estimates (including data in tables) relating to mineral reserves and resources and gold equivalent ounces are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates will be realized. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions or variations (including negative variations), or that events or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, most of which are beyond the control of Osisko, and actual results may accordingly differ materially from those in forward-looking statements. Such risk factors include, without limitation: fluctuations in the prices of the commodities that drive royalties, streams, offtakes and investments held by Osisko; fluctuations in the value of the Canadian dollar relative to the
For additional information on risks, uncertainties and assumptions, please refer to the most recent Annual Information Form of Osisko filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov which also provides additional general assumptions in connection with these statements. Osisko cautions that the foregoing list of risk and uncertainties is not exhaustive. Investors and others should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Osisko believes that the assumptions reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be accurate as actual results and prospective events could materially differ from those anticipated such the forward looking statements and such forward-looking statements included in this press release are not guarantee of future performance and should not be unduly relied upon. These statements speak only as of the date of this press release. Osisko undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.
Consolidated Balance Sheets | |||||
(tabular amounts expressed in thousands of Canadian dollars) | |||||
2022 | 2021 | ||||
$ | $ | ||||
Assets | |||||
Current assets | |||||
Cash | 449,450 | 115,698 | |||
Restricted cash | 206,490 | - | |||
Short-term investments | 2,960 | - | |||
Amounts receivable | 16,308 | 14,691 | |||
Inventories | 25,053 | 18,596 | |||
Other assets | 7,169 | 3,941 | |||
707,430 | 152,926 | ||||
Non-current assets | |||||
Investments in associates | 129,687 | 125,354 | |||
Other investments | 130,700 | 169,010 | |||
Royalty, stream and other interests | 1,146,284 | 1,154,801 | |||
Mining interests and plant and equipment | 644,960 | 635,655 | |||
Exploration and evaluation | 3,640 | 3,635 | |||
111,204 | 111,204 | ||||
Other assets | 18,810 | 18,037 | |||
2,892,715 | 2,370,622 | ||||
Liabilities | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | 43,936 | 30,049 | |||
Dividends payable | 10,167 | 9,157 | |||
Subscription receipts liability | 207,980 | - | |||
Provisions and other liabilities | 6,844 | 12,179 | |||
Current portion of long-term debt | 298,033 | 294,891 | |||
566,960 | 346,276 | ||||
Non-current liabilities | |||||
Provisions and other liabilities | 55,612 | 60,334 | |||
Long-term debt | 116,328 | 115,544 | |||
Deferred income taxes | 67,396 | 68,407 | |||
806,296 | 590,561 | ||||
Equity | |||||
Share capital | 2,082,961 | 1,783,689 | |||
Warrants | - | 18,072 | |||
Contributed surplus | 62,547 | 42,525 | |||
Equity component of convertible debentures | 14,510 | 14,510 | |||
Accumulated other comprehensive income | 26,458 | 58,851 | |||
Deficit | (280,855 | ) | (283,042 | ) | |
Equity attributable to Osisko Gold Royalties Ltd’s shareholders | 1,905,621 | 1,634,605 | |||
Non-controlling interests | 180,798 | 145,456 | |||
Total equity | 2,086,419 | 1,780,061 | |||
2,892,715 | 2,370,622 |
Consolidated Statements of Income (Loss) | |||||
For the three months | |||||
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts) | |||||
2022 | 2021 | ||||
$ | $ | ||||
Revenues | 59,398 | 66,923 | |||
Cost of sales | (11,162 | ) | (20,397 | ) | |
Depletion and amortization | (12,026 | ) | (11,927 | ) | |
Gross profit | 36,210 | 34,599 | |||
Other operating expenses | |||||
General and administrative | (12,644 | ) | (9,906 | ) | |
Business development | (1,421 | ) | (987 | ) | |
Exploration and evaluation | (120 | ) | (337 | ) | |
Mining operating expenses | (15,246 | ) | - | ||
Impairment - royalty, stream and other interests | - | (2,288 | ) | ||
Operating income | 6,779 | 21,081 | |||
Interest income | 1,191 | 1,310 | |||
Finance costs | (6,373 | ) | (6,143 | ) | |
Foreign exchange gain (loss) | 1,187 | (1,129 | ) | ||
Share of income (loss) of associates | 2,273 | (32 | ) | ||
Other losses, net | (5,224 | ) | (1,910 | ) | |
(Loss) earnings before income taxes | (167 | ) | 13,177 | ||
Income tax expense | (5,362 | ) | (3,414 | ) | |
Net (loss) earnings | (5,529 | ) | 9,763 | ||
Net earnings (loss) attributable to: | |||||
Osisko Gold Royalties Ltd’s shareholders | 326 | 10,557 | |||
Non-controlling interests | (5,855 | ) | (794 | ) |
Consolidated Statements of Cash Flows | |||||
For the three months ended | |||||
(tabular amounts expressed in thousands of Canadian dollars) | |||||
2022 | 2021 | ||||
$ | $ | ||||
Operating activities | |||||
Net (loss) earnings | (5,529 | ) | 9,763 | ||
Adjustments for: | |||||
Share-based compensation | 3,631 | 3,300 | |||
Depletion and amortization | 15,017 | 12,261 | |||
Impairment of assets | 520 | 4,400 | |||
Finance costs | 2,145 | 1,839 | |||
Share of (income) loss of associates | (2,273 | ) | 32 | ||
Net gain on acquisition of investments | (48 | ) | (438 | ) | |
Change in fair value of financial assets at fair value through profit and loss | 8,176 | 1,908 | |||
Net gain on dilution of investments in associates | (2,060 | ) | (1,391 | ) | |
Foreign exchange (gain) loss | (1,400 | ) | 773 | ||
Deferred income tax recovery | 5,128 | 3,350 | |||
Other | (684 | ) | 455 | ||
Net cash flows provided by operating activities before changes in non-cash working capital items | 22,623 | 36,252 | |||
Changes in non-cash working capital items | 987 | (14,928 | ) | ||
Net cash flows provided by operating activities | 23,610 | 21,324 | |||
Investing activities | |||||
Acquisition of investments | (10,734 | ) | (9,811 | ) | |
Proceeds on disposal of investments | 21,055 | 19,771 | |||
Acquisition of royalty and stream interests | (9,290 | ) | (3,792 | ) | |
Mining assets and plant and equipment | (13,034 | ) | (35,812 | ) | |
Exploration and evaluation expenses, net of tax credits | (5 | ) | (135 | ) | |
Other | (264 | ) | - | ||
Net cash flows used in investing activities | (12,272 | ) | (29,779 | ) | |
Financing activities | |||||
Bought deal equity financing | 311,962 | - | |||
Share issue costs | (12,816 | ) | - | ||
Increase in long-term debt | 3,870 | 50,000 | |||
Repayment of long-term debt | (605 | ) | (50,000 | ) | |
Investments from minority shareholders | 42,390 | 38,841 | |||
Share issue expenses from investments from minority shareholders | (2,130 | ) | (2,581 | ) | |
Exercise of share options and shares issued under the share purchase plan | 622 | 4,978 | |||
Normal course issuer bid purchase of common shares | (4,879 | ) | (4,464 | ) | |
Dividends paid | (8,723 | ) | (7,782 | ) | |
Capital payments on lease liabilities | (5,272 | ) | (852 | ) | |
Withholding taxes on settlement of restricted and deferred share units | (424 | ) | (38 | ) | |
Other | (1,330 | ) | - | ||
Net cash flows provided by financing activities | 322,665 | 28,102 | |||
Increase in cash before effects of exchange rate changes on cash | 334,003 | 19,647 | |||
Effects of exchange rate changes on cash | (251 | ) | (1,541 | ) | |
Increase in cash | 333,752 | 18,106 | |||
Cash – beginning of period | 115,698 | 302,524 | |||
Cash – end of period | 449,450 | 320,630 |
Source:
2022 GlobeNewswire, Inc., source