Gold Royalty(GROY) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported total revenue of $3.6 million for the quarter, translating to 1,249 gold equivalent ounces [6] - Operating cash flow reached a record $2.5 million, an increase of over 180% compared to the previous quarter [6] - Adjusted EBITDA was $1.7 million, representing an increase of over 30% compared to the previous quarter [6] - General and administrative costs were $1.8 million during the quarter, indicating effective cost management [6] Business Line Data and Key Metrics Changes - Production in Q1 represented approximately 20% of the midpoint of the full-year guidance range of 5,700 to 7,000 gold equivalent ounces [7] - The company expects production growth as projects ramp up and derisk throughout the year [7] Market Data and Key Metrics Changes - Spot gold prices reached record highs, recently exceeding $3,300 per ounce, which positively impacted both revenue and cash flow [4] - The company assumes a gold price of $2,212 per ounce and a copper price of $4.24 per pound in its five-year outlook [9] Company Strategy and Development Direction - The company is focused on debt reduction while considering capital returns to shareholders and pursuing strategic growth opportunities [5] - The five-year outlook forecasts production of 23,000 to 28,000 gold equivalent ounces by 2029, representing over a 360% increase from 2024 [8] - The company emphasizes disciplined capital allocation and is looking for accretive deals while maintaining a strong cash flow growth strategy [13][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for a transformative year, with expectations for steady improvement in cash flow and production [4] - The management highlighted the importance of being patient as cash flow growth materializes, which is expected to be a catalyst for re-rating back in line with peers [14] Other Important Information - The company is experiencing exciting progress towards project completion and expansion across its portfolio [12] - The upcoming Capital Markets Day is scheduled for June 12, where further details will be shared [15] Q&A Session Summary Question: What should be modeled for ounces in the second quarter? - Management indicated that Q1 production was lighter than expected, and a significant step up in Q2 is anticipated as assets ramp up to commercial production [22] Question: Where do you see the most variability in the long-term outlook? - Management noted variability could stem from Canadian Malartic and Odyssey, with potential upside at Bulbarema due to ongoing developments [24][27] Question: How has the market for new transactions changed with high gold prices? - The company is seeing more opportunities for new royalties on earlier stage assets, emphasizing a disciplined approach to capital allocation [34]