Osisko Gold Royalties(US:OR)2024-11-07 02:04Financial Data and Key Metrics Changes - Osisko earned 18,408 gold equivalent ounces in Q3 2024, positioning the company to meet its full-year guidance of 77,000 to 83,000 gold equivalent ounces [6] - Operating cash flows for the period were $47.2 million, with a cash margin of 96.3% [7][17] - Quarterly revenues were $57.3 million, slightly lower compared to Q3 2023 due to timing of gold equivalent ounces earned but not sold [13] - Earnings per share were $0.10, showing year-over-year improvement [15] - Net debt was reduced to just over $20 million, significantly improving financial flexibility [10][47] Business Line Data and Key Metrics Changes - The company had 20 producing assets, with over 91% of gold equivalent ounces derived from precious metals [19][24] - Canadian Malartic had a solid quarter, although production dipped slightly due to planned maintenance [20][33] - Capstone Copper's Mantos Blancos operation saw lower year-over-year production but is expected to improve with plant upgrades [21][41] Market Data and Key Metrics Changes - Osisko's cash margin was 96.3% for Q3 2024, making it a leader among peers [17] - The commodity mix included over 26% silver, with expectations for revenue from silver to rise around 30% in the coming years [23] Company Strategy and Development Direction - The company is focused on disciplined capital allocation to pursue high-quality accretive precious metal streams and royalties [50] - The acquisition of a 1.8% gross revenue royalty on Spartan Resources' Dalgaranga Gold project aligns with Osisko's strategy of investing in Tier 1 mining jurisdictions [27][28] - Future growth is anticipated from projects like Namdini and Mantos Blancos, contributing significantly to gold equivalent ounces [44][41] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2024 guidance despite challenges from the suspension of the Eagle Mine [42] - The company plans to provide a five-year outlook in February 2025, which will include projections for Dalgaranga [57] - Management noted a robust transaction environment with opportunities primarily in cash-flowing assets [68][72] Other Important Information - The company declared a quarterly dividend of $0.065 per share, marking its 40th consecutive dividend [11] - Osisko will switch to reporting in U.S. dollars starting in 2025, while maintaining Canadian dollars as its functional currency [4][63] Q&A Session Summary Question: Can you provide more details on the Dalgaranga production profile? - Management indicated that while the feasibility study will not be available until 2025, there is potential for higher grades earlier in the mine's life [54][55] Question: Will the first revenues from Namdini be seen in Q1 or Q2 of 2025? - Management confirmed that first revenues are expected in Q1 2025 if first gold is poured by the end of this year [58] Question: What is the plan for financing the Dalgaranga acquisition? - Management stated that the plan is to draw down on the revolving credit facility, with operating cash flow expected to quickly pay down the debt [61][62] Question: What is the current transaction environment like? - Management noted a robust opportunity set, with a focus on high-quality assets and potential bespoke financing solutions [68][70]