Record cash margin of $201.7 million

Record operating cash flows from continuing operations of $175.1 million

Osisko Gold Royalties Ltd (TSX:OR)  (NYSE:OR) announced its consolidated financial results for the fourth quarter and full year 2022, and provided guidance for 2023 as well as its updated 5-year growth outlook. Amounts presented are in Canadian dollars, except where otherwise noted.

2022 Financial Highlights

• Deconsolidation of Osisko Development Corp. as of September 30, 2022 and presentation of its results as discontinued operations on the consolidated statements of loss and the consolidated statements of cash flows;
• 89,367 GEOs¹ earned, an annual record and an increase of 12% over 2021 (80,000 GEOs);
• Record revenues from royalties and streams of $217.8 million (2021 – $199.6 million; $224.9 million including offtakes); Record cash flows generated by operating activities from continuing operations of $175.1 million (2021 – $153.2 million);
• Record cash margin² from royalties and streams of $201.7 million or 93% (2021 – $186.3 million or 93%; $187.2 million including offtakes);
• Net earnings from continuing operations of $85.3 million, or $0.47 per share (2021 – $76.6 million or $0.46 per basic share); and
• Record adjusted earnings² of $111.3 million, or $0.62 per basic share (2021 – $94.4 million, $0.56 per basic share).

Q4 2022 Financial Highlights

• 25,023 GEOs¹ earned, a quarterly record (Q4 2021 – 19,830 GEOs);
• Record quarterly revenues from royalties and streams of $61.9 million (Q4 2021 – $50.7 million);
• Cash flows generated by operating activities from continuing operations of $48.5 million (Q4 2021 – $35.1 million);
• Record quarterly cash margin² from royalties and streams of $57.2 million or 92% (Q4 2021 – $47.0 million or 93%);
• Net earnings from continuing operations of $22.4 million, or $0.12 per share (Q4 2021 – $21.2 million or $0.13 per basic share); and
• Record quarterly adjusted earnings² of $34.9 million, or $0.19 per basic share (Q4 2021 – $23.8 million, $0.14 per basic share).

Sandeep Singh, President and CEO of Osisko commented: “As discussed in our Q4 2022 preliminary results release, Osisko had an exceptional year in 2022. We had successive quarters of record GEO deliveries, revenues and cash margins, we were active on several high-quality transactions, and returned capital to shareholders via dividends and share buy-backs. We continue to benefit from a sustained period of organic growth and we have simplified the business positioning Osisko to unlock significant value in 2023 for shareholders.”

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 of US$250.2 million;
• Osisko Bermuda Limited, a wholly-owned subsidiary of Osisko, entered into a revised binding agreement with Metals Acquisition Corp. with respect to a US$75.0 million silver stream to facilitate MAC’s acquisition of the producing CSA mine in New South Wales, Australia). Osisko Bermuda also entered into a backstop financing agreement with respect to an up to US$75.0 million copper stream;
• Osisko Bermuda entered into an agreement with Osisko Development, with respect to a metals stream on the Trixie property, as well as mineral claims covering more than 17,000 acres in Central Utah’s historic Tintic Mining District;
• Acquired a 1.0% net smelter return (“NSR”) royalty covering the currently known mineralization and prospective exploration areas that constitute the Marimaca copper project located in Antofagasta, Chile, for US$15.5 million ($20.3 million);
• Acquired a 0.6% NSR royalty for US$50.0 million ($67.2 million) covering the entire 4,979 hectare Cascabel property, including the Alpala project, located in northeastern Ecuador and operated by SolGold plc;
• Took up a 20% participation right in Carbon Streaming Corporation’s Magdalena Bay Blue carbon project, expected to be one of the largest blue carbon conservation projects in the world. Osisko has funded US$1.2 million towards the development of the project and will receive a stream of approximately 40,000 carbon credits annually or 4% of annual production;
• Increased the accordion feature of the revolving credit facility from $100.0 million to $200.0 million and extended the maturity date to September 29, 2026;
• Repaid the $300 million convertible debentures that came to maturity, using $150.0 million from the cash balance and drew the credit facility for the same amount;
• Repurchased 1.7 million common shares for $22.1 million under the normal course issuer bid (average acquisition price of $13.06);
• Added Ms. Edie Hofmeister and Mr. Rob Krcmarov to the Board as independent directors; and
• Declared quarterly dividends totaling $0.22 per common share in 2022 compared to $0.21 per common share in 2021.

Subsequent to December 31, 2022

• Declared a quarterly dividend of $0.055 per common share payable on April 14, 2023 to shareholders of record as of the close of business on March 31, 2023.

2023 Guidance and 5-Year Outlook

2023 Guidance

Osisko expects GEOs earned to range between 95,000 to 105,000 GEOs in 2023 at an average cash margin of 93%.

Osisko’s 2023 guidance on royalty and stream interests is largely based on publicly available forecasts from our operating partners. When publicly available forecasts on properties are not available, Osisko obtains internal forecasts from the producers or uses management’s best estimate.

For the 2023 guidance, deliveries of silver, diamond, copper, and cash royalties have been converted to GEOs using commodity prices based on consensus prices and a gold/silver price ratio of 80:1. The 2023 guidance also forecasts the closing of the CSA Silver Stream in the second quarter of 2023, with an effective date of February 1, 2023.

5-Year Outlook³

Osisko expects its portfolio to generate between 130,000 and 140,000 GEOs in 2027. The outlook assumes the commencement of production at the San Antonio, Cariboo, Windfall and Back Forty projects. It also assumes that Mantos Blancos will have reached its nameplate capacity following the recent expansion of its activities, as well as increased production from certain other operators that have announced planned expansions. Further, the outlook assumes that production from the Renard diamond stream will have ceased by 2027 (while there remain opportunities for mine life extensions under study by the operator), but such GEOs are expected to be largely replaced by initial production from other assets.

Beyond this growth profile, Osisko owns several other growth assets, which have not been factored in the 5-year outlook, as their timelines are either later, or less clear. As the operators provide further clarity on these assets, Osisko will seek to include them in its long-term outlook.

This 5-year outlook is based on publicly available forecasts and other disclosure by the third-party owners and operators of the Company’s assets, and could differ materially from actual results. When publicly available forecasts on properties are not available, Osisko obtains internal forecasts from the producers or uses management’s best estimate. The commodity price assumptions that were used in the 5-year outlook are based on current long-term consensus and a gold/silver price ratio of 75:1.

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. Osisko’s portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, which is the largest gold mine in Canada.

Notes:

• 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

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

(3) 5-year Outlook

The 5-year outlook presented in this press release replaces the 5-year outlook previously released in 2022. Investors should not use this 5-year outlook to extrapolate forecast results to any year within the 5-year period (2023-2027).