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Osisko Announces Q2 2024 GEO Deliveries, Record Cash Margin and Select Asset Updates

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Osisko Announces Q2 2024 GEO Deliveries, Record Cash Margin and Select Asset Updates

 

 

 

 

 

First Deliveries From CSA Copper Stream Received in Early July

 

Osisko Gold Royalties Ltd (TSX:OR) (NYSE:OR) is pleased to announce its second quarter 2024 deliveries, revenues and cash margin, as well as an update on its cash and debt positions as of June 30th, 2024. In addition, Osisko is also providing some select asset updates. All monetary amounts included in this report are expressed in Canadian dollars, unless otherwise noted.

 

PRELIMINARY Q2 2024 RESULTS

 

Osisko earned 20,068 attributable gold equivalent ounces1 in the second quarter of 2024.

 

Osisko recorded preliminary revenues from royalties and streams of $64.8 million during the second quarter and preliminary cost of sales (excluding depletion) of $2.2 million, resulting in a record quarterly cash margin2 of approximately $62.6 million (or 97%).

 

As of June 30th, 2024, Osisko’s cash position was approximately $65.7 million, following $44.2 million in repayments on the Corporation’s revolving credit facility during the second quarter (for total repayments of $87.9 million in the first half of 2024). The Corporation’s revolving credit facility was drawn by approximately $109.0 million at the end of June 2024, with an additional amount of $441.0 million available to be drawn plus the uncommitted accordion of up to $200.0 million.

 

SELECT ASSET UPDATES

 

Eagle Mine (operated by Victoria Gold Corp.)

 

On June 24th, 2024, Victoria Gold Corp. announced that the heap leach pad at the Eagle Gold Mine in the Yukon Territory experienced a failure. Operations have been suspended while the site operations team, along with management and the Yukon government officials continue to assess the situation and gather information. At this stage, Victoria has confirmed that there have been no fatalities or injuries to personnel associated with the incident. Victoria also confirmed that there had been some damage to infrastructure and a portion of the failure had left containment.

 

Subsequently on July 4th, 2024, Victoria advised that it had received Notices of Default from its lenders under the Credit Agreement dated December 18, 2020. A default under the Eagle Royalty Agreement dated April 13, 2018, was also triggered and consequently, Osisko provided a Notice of Default to Victoria on July 4, 2024.

 

Osisko holds a 5% NSR royalty on Eagle until 97,500 ounces of gold have been delivered and a 3% NSR royalty thereafter. Osisko’s royalty covers the entire Dublin Gulch property including the reserves on the Eagle and Olive ore deposits and all of the exploration targets identified by Victoria.

 

CSA Mine (operated by Metals Acquisition Limited)

 

In April 2024, Metals Acquisition Limited presented an updated Mineral Reserve and Resource Statement based on drilling completed at CSA up to August 2023. Highlights included a 67% increase in mine life to 11 years (to the end of 2034) based on Mineral Reserves only, compared to a 6-year mine life outlined previously. Mineral Reserves are 14.9 million tonnes grading 3.3% copper and 13 g/t silver. These increases were achieved after just ten months of ownership and based on drilling data from only two and a half months post-closing of the acquisition, with the effective date for the Reserve and Resource Statement being August 31, 2023. Despite the near doubling of the Mineral Reserves, CSA still has 4.7Mt grading 4.9% Cu and 15 g/t Ag in the Measured and Indicated Categories and 3.3Mt grading 5.5% Cu and 21 g/t Ag in the Inferred Category that are not included in the Mineral Reserves and work is underway to convert these to Mineral Reserve estimates in the future.

 

Osisko, through its wholly-owned subsidiary Osisko Bermuda Limited, owns a 100% silver stream on the CSA mine as well as a 3.0-4.875% copper stream, the latter being the newest production stream in Osisko’s portfolio, and now active as of June 15th, 2024. The first delivery under the CSA copper stream to Osisko Bermuda was made in the first week of July for a total of approximately 74 tonnes of copper (164,000 pounds), or approximately 300 GEOs. These deliveries were not included in the second quarter GEO deliveries referenced above.

 

Tocantinzinho (operated by G Mining Ventures Corp.)

 

In early June 2024, G Mining Ventures Corp. announced that construction of its flagship Tocantinzinho gold project in Brazil remained on track with the first gold pour expected to occur in the very near term, and with commercial production expected soon thereafter. Overall physical construction at TZ was approximately 97% complete as of May 31st, 2024. Ore was introduced into the grinding circuit on June 10th after G Mining received the hot commissioning permit from the Pará State Environmental Agency, SEMAS. The commissioning permits allow for the mining and processing of ore, disposal of tailings as well as the selling and exporting of gold.

 

Osisko owns a 0.75% NSR royalty on the Tocantinzinho project.

 

Notes:

 

The figures presented in this press release, including revenues and costs of sales, have not been audited and are subject to change. As the Corporation has not yet finished its quarter-end procedures, the anticipated financial information presented in this press release is preliminary, subject to quarter-end adjustments, and may change materially.

 

(1)  Gold Equivalent Ounces

 

GEOs are calculated on a quarterly basis and include royalties and streams. Silver and copper earned from royalty and stream agreements are converted to gold equivalent ounces by multiplying the silver ounces or copper tonnes earned by the average silver or copper 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.

 

Average Metal Prices and Exchange Rate

 

  Three months ended
June 30,
 
    2024   2023  
       
Gold(i) $2,338 $1,976  
Silver(ii) $28.84 $24.13  
       
Exchange rate (US$/Can$)(iii)   1.3683   1.3428  

 

  (i) The London Bullion Market Association’s pm price in U.S. dollars.
  (ii) The London Bullion Market Association’s price in U.S. dollars.
  (iii) Bank of Canada daily rate.

 

(2)  Non-IFRS Measures

 

The Corporation has included certain performance measures in this press release that do not have any standardized meaning prescribed by IFRS Accounting Standards including cash margin in dollars and in percentage. 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 Accounting Standards. These measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS Accounting Standards. As Osisko’s operations are primarily focused on precious metals, the Corporation presents cash margins as it believes that certain investors use this information, together with measures determined in accordance with IFRS Accounting Standards, to evaluate the Corporation’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) represents revenues less cost of sales (excluding depletion). Cash margin (in percentage) represents the cash margin (in dollars) divided by revenues.

 

(In thousands of dollars) Three months ended
June 30, 2024
 
     
Revenues $64,846  
Less: Cost of sales (excluding depletion) ($2,226 )
Cash margin (in dollars) $62,620  
Cash margin (in percentage of revenues) 96.6%  

Qualified Person

 

The scientific and technical content of this news release has been reviewed and approved by Guy Desharnais, Ph.D., P.Geo., Vice President, Project Evaluation at Osisko Gold Royalties Ltd, who is a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

 

About Osisko Gold Royalties Ltd

 

Osisko is an intermediate precious metal royalty company focused on the Americas that commenced activities in June 2014. Osisko holds a North American focused portfolio of over 185 royalties, streams and precious metal offtakes. Osisko’s portfolio is anchored by its cornerstone asset, a 3-5% net smelter return royalty on the Canadian Malartic Complex, which is home to one of Canada’s largest gold mines.

 

Posted July 8, 2024

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