Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Osisko Gold Royalties Ltd (OR, Financial) achieved a cash margin of 96.3% in Q3 2024, highlighting its strong profitability.
- The company earned 18,408 gold equivalent ounces in Q3, positioning it well to meet its full-year guidance of 77,000 to 83,000 gold equivalent ounces.
- Osisko Gold Royalties Ltd (OR) completed the acquisition of a 1.8% gross revenue royalty on Spartan Resources' Dalgaranga gold project, enhancing its portfolio.
- The company reduced its net debt to just over $20 million, significantly improving its financial flexibility.
- Osisko Gold Royalties Ltd (OR) declared its 40th consecutive quarterly dividend, demonstrating a strong commitment to returning capital to shareholders.
Negative Points
- Quarterly revenues of $57.3 million were modestly lower compared to Q3 2023, partly due to the suspension of the Eagle Mine.
- The company faced a delay in receiving revenue from nearly 600 gold equivalent ounces due to a Canadian holiday, impacting Q3 results.
- Production at Capstone Copper's Mantos Blancos operation was lower year-over-year due to unplanned downtime and lower throughput.
- Osisko Gold Royalties Ltd (OR) only managed to repurchase 26,000 shares during the quarter, indicating limited buyback activity.
- The transition to reporting in US dollars from Q4 2024 onwards may introduce currency-related complexities.
Q & A Highlights
Q: Can you provide more details on the Dalgaranga production profile and its impact on future guidance?
A: Jason Attew, President and CEO, explained that the feasibility study for Dalgaranga will be available in 2025, making it difficult to comment on the mine plan. Guy Desharnais, VP of Project Evaluation, noted that high-grade potential exists early in the mine's life, but they are being conservative with estimates. Dalgaranga will be included in the five-year outlook to be provided in February 2025.
Q: When can we expect the first revenue from Nandini?
A: Jason Attew confirmed that first revenue from Nandini is expected in Q1 2025, assuming first gold is poured by the end of 2024.
Q: How will the Dalgaranga transaction be financed?
A: Jason Attew stated that the $50 million required for the Dalgaranga transaction will be drawn from the revolving credit facility, with plans to quickly pay it down using operating cash flow.
Q: Will Osisko Gold Royalties consider currency hedging with the switch to USD reporting?
A: Jason Attew mentioned that currency hedging is considered a risk management exercise. While they may consider USD hedges, it would not be material and would depend on market conditions.
Q: Can you comment on the current transaction environment and potential deal structures?
A: Jason Attew noted that the opportunity set is robust, with deals ranging from $50 million to $500 million. They focus on asset quality and are open to bespoke solutions, including equity and debt, if the asset quality and returns justify it.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
