Osisko Gold Royalties Ltd (TSX:OR) (NYSE:OR) announced its consolidated financial results for the third quarter of 2023. Amounts presented are in Canadian dollars, except where otherwise noted.

Highlights – Third Quarter of 2023

• 23,292 gold equivalent ounces earned (23,850 GEOs in Q3 2022);
• Revenues from royalties and streams of $62.1 million ($53.7 million in Q3 2022);
• Cash flows generated by operating activities² of $43.5 million ($51.1 million in Q3 2022);
• Net loss² of $20.0 million, $0.11 per basic share (net earnings of $28.0 million, $0.15 per basic share in Q3 2022), mostly as a result of a non-cash impairment charge and a write-off on assets related to the Renard diamond mine, together totaling $32.4 million ($26.2 million, net of income taxes);
• Adjusted earnings³ of $22.4 million, $0.12 per basic share³ (of $25.8 million, $0.14 per basic share in Q3 2022);
• Acquisition of a 3% gold net smelter return (“NSR”) royalty and 1% copper NSR royalty on the Costa Fuego copper-gold project held by Hot Chili Limited for US$15.0 million ($19.9 million);
• Patriot Battery Metals Inc. published its maiden mineral resource estimate for the CV5 Spodumene Pegmatite at its wholly-owned Corvette Property, located in the Eeyou Istchee James Bay region of Québec, on which Osisko holds a sliding scale 1.5 – 3.5% on precious metals, and 2.0% on all other products, including Lithium, on most (estimated at approximately 80% – 95% by Osisko) of the mineral resource estimate;
• Appointment of Mr. Paul Martin as Interim Chief Executive Officer; and
• Quarterly dividend of $0.06 per common share paid on October 16, 2023 to shareholders of record as of the close of business on September 29, 2023.

Paul Martin, Interim CEO of Osisko commented: “When factoring in the variety of challenges faced by some of our key operating partners during the third quarter, we are coming away satisfied with our overall performance. As we head into the final three months of the year, and as previously noted, we are now trending towards the lower end of our 2023 GEO guidance range. Of particular note is the Renard diamond stream, where the situation remains fluid. As such, in contrast to what was previously expected, Osisko might now actually expect a GEO contribution from the mine during the fourth quarter, however this will depend largely on rough diamond prices, and will come in materially lower than what was originally budgeted for the period. Finally, Osisko remained very active on the corporate development front both during the third quarter and after it, having first closed the Costa Fuego transaction, and then, just last week, having announced the acquisition of a 1.0% NSR royalty on Shandong Gold’s Namdini project in Ghana, where first gold production is expected in late 2024.”

Subsequent to September 30, 2023

• On October 27, 2023, Stornoway Diamonds (Canada) Inc. announced the suspension of operations at the Renard mine due to the growing uncertainty of diamond prices and the placement of Stornoway under the protection of the Companies’ Creditors Arrangement Act.
• On October 30, 2023, Osisko announced the acquisition of a 1.0% NSR royalty covering the Namdini Gold Project in Ghana. Osisko has closed the transaction with Savannah Mining Limited, acquiring a direct interest in 50% of Savannah’s 2.0% NSR royalty for total consideration of US$35.0 million (excluding applicable taxes and levies).
• Declaration of a quarterly dividend of $0.06 per common share payable on January 15, 2024 to shareholders of record as of the close of business on December 29, 2023.

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 Gold Royalties Ltd is an intermediate precious metal royalty company which holds a North American focused portfolio of over 180 royalties, streams and precious metal offtakes, including 23 producing assets. Osisko’s portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, one of Canada’s largest gold mines.

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.

Average Metal Prices and Exchange Rate

(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)   From continuing operations

(3)   Non-IFRS Measures

The Corporation 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), (ii) adjusted earnings and (iii) adjusted earnings 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 Corporation 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 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 and in percentage of revenues)

Cash margin (in dollars) represents revenues from continuing operations less cost of sales (excluding depletion). Cash margin (in percentage of revenues) represents the cash margin (in dollars) divided by revenues from continuing operations.

Adjusted earnings and adjusted earnings per basic share

Adjusted earnings 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 assets, unrealized gain (loss) on investments, share of income (loss) of associates, deferred income tax expense (recovery), transaction costs and other items such as non-cash gains (losses).

Adjusted earnings per basic share is obtained from the adjusted earnings divided by the weighted average number of common shares outstanding for the period.