Osisko Gold Royalties(OR) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues from royalties and streams reached CAD 50.7 million in Q1 2022, compared to CAD 49 million in Q1 2021, indicating a slight increase [18] - Cash flows from operations for the royalties and streams segment were CAD 40.5 million, up from CAD 27 million in Q1 2021 [19] - Adjusted earnings for the quarter were CAD 2.2 million or CAD 0.01 per share, down from CAD 7.6 million or CAD 0.06 per share in Q1 2021, primarily due to mining operating expenses incurred by Osisko Development [19] Business Line Data and Key Metrics Changes - The company deployed 18,251 GEOs in Q1 2022, with a gross profit of CAD 36.2 million, compared to CAD 34.6 million in the previous year [20] - The cash margin on royalties reached CAD 25 million, while the cash margin on streams amounted to CAD 12.6 million, contributing to a record quarterly cash margin of CAD 47.5 million [21] Market Data and Key Metrics Changes - The company reported a strong cash balance of CAD 449 million at the end of Q1 2022, including CAD 293 million for Osisko Gold Royalties and CAD 57 million for Osisko Development [22] - The company held investments valued at CAD 250 million and an investment in Osisko Development valued at over CAD 400 million [22] Company Strategy and Development Direction - The company aims to unlock the value of its current portfolio, focusing on organic growth while remaining open to potential consolidation opportunities in the future [28][30] - The company expects a strong second half of 2022, with growth assets steadily advancing towards production projections [10] Management's Comments on Operating Environment and Future Outlook - Management noted that Q1 was lighter than expected due to seasonality and operational ramp-ups, but they anticipate a strong recovery in the second half of the year [8][9] - The company is confident in its business model's ability to provide inflation protection amid market volatility [9] Other Important Information - The company paid a dividend of CAD 0.055 on March 31, 2022, and announced the same for July 15, 2022 [5] - The Renard stream has been reactivated, contributing positively to the company's operations [3][6] Q&A Session Summary Question: Timing of CSA transaction closure - Management expects clarity on the CSA transaction in the coming weeks, as the funding package will need to be disclosed during the De-SPACing process [25][26] Question: Strategic outlook on consolidation - Management believes that while consolidation in the sector is healthy, the primary focus remains on unlocking the value of the current portfolio rather than pursuing consolidation at this time [27][28]