MONTREAL, QUEBEC--(Marketwired - Feb. 20, 2018) - Osisko Gold Royalties Ltd (the "Company" or
"Osisko") (TSX:OR)(NYSE:OR) is pleased to report its results for the fourth quarter and full year 2017 and provide 2018
guidance. Amounts are in Canadian dollars unless otherwise noted.
Sean Roosen, Chair of the Board and Chief Executive Officer, commenting on the 2017 performance: "2017 has been a
transformational year for Osisko with the acquisition of the Orion portfolio, which was a significant step forward for our
company in terms of building a dominant, Canada-focused, precious metals royalty and streaming platform. At the same time, we
have continued to mature our accelerator business and to create value for our shareholders by helping to create great Canadian
gold projects. Today, not only does Osisko have the greatest growth profile amongst its peers, it has uniquely positioned itself
with a quality pipeline of growth projects that will derive benefits for Osisko's shareholders for years to come."
Highlights - Q4 2017
- Record quarterly gold equivalent ounces ("GEOs")1 earned of 20,990 (134% increase compared to Q4 2016);
- Record quarterly revenues from royalties and streams of $32.2 million ($109.6 million including offtakes) (135% increase
compared to Q4 2016; 699% increase including offtakes);
- Net cash flows provided by operating activities of $21.5 million (compared to $12.8 million in Q4 2016);
- Net loss attributable to Osisko's shareholders of $64.3 million, $0.41 per basic share reflecting an impairment charge of
$89.0 million on the Éléonore royalty interest ($65.4 million, net of income taxes) (compared to net earnings of $8.7 million,
$0.08 per basic share in Q4 2016); and
- Adjusted earnings2 of $1.0 million, $0.01 per basic share2 (compared to $6.9 million, $0.07 per basic
share in Q4 2016).
Highlights - 2017
- Record GEOs earned of 58,933 (54% increase compared to 2016);
- Record revenues from royalties and streams of $93.8 million ($213.2 million including offtakes) (50% increase compared to
2016; 240% increase including offtakes);
- Net cash flows provided by operating activities of $48.7 million (compared to $53.4 million in 2016);
- Net loss attributable to Osisko's shareholders of $42.5 million, $0.33 per basic share (compared to net earnings of
$42.1 million, $0.40 per basic share in 2016);
- Adjusted earnings2 of $22.7 million, $0.18 per basic share2 (compared to $34.2 million, $0.33 per
basic share in 2016);
- Proceeds of $71.1 million on sale of investments, generating a gain3 of $35.8 million, based on the cash
cost3 of the investments. Subsequent to December 31, 2017, Osisko made a gain of $15.5 million from the delivery of
the AuRico Metals Inc. shares to Centerra Gold Inc. bringing the total gain3 from monetizing investments since 2015
to $70.1 million, based on the cash cost3 of the investments;
- Acquisition of a precious metals portfolio of assets from Orion Mine Finance Group ("Orion") for $1.1 billion consisting of
74 royalties, streams and precious metal offtakes, including a 9.6% diamond stream on the Renard diamond mine and a 4%
gold and silver stream on the Brucejack gold and silver mine, both of which are new mines in Canada, in addition to a 100%
silver stream on the Mantos Blancos copper mine in Chile;
- Acquisition of royalty and stream interests for $127.6 million ($80.1 million paid in 2017);
- Completed a bought deal offering of convertible senior unsecured debentures of $300.0 million;
- Increased the revolving credit facility to $350.0 million (with a potential accordion of up to $100.0 million); and
- Declaration of quarterly dividends totalling $0.18 per common share for 2017.
| 1 |
GEOs are calculated on a quarterly basis and include royalties, streams and offtakes. Silver earned from
royalty and stream agreements was converted to gold equivalent ounces by multiplying the silver ounces by the average
silver price for the period and dividing by the average gold price for the period. Diamonds, other metals and cash
royalties were converted into gold equivalent ounces by dividing the associated revenue by the average gold price for the
period. Offtake agreements were converted using the financial settlement equivalent divided by the average gold price for
the period. Refer to the portfolio of royalty, stream and other interests section for average metal prices used. |
| 2 |
"Adjusted earnings" and "Adjusted earnings per basic share" are non-IFRS financial performance measures
which have no standard definition under IFRS. Refer to the non-IFRS performance measures section of this press
release. |
| 3 |
The cash cost of an investment is a non-IFRS measure representing the cash paid on the acquisition of an
investment. The gain or the loss is calculated by subtracting the cash acquisition cost from the cash proceeds on the sale
of an investment. |
Acquisition of Orion's Portfolio
On July 31, 2017, Osisko acquired a precious metals portfolio of assets from Orion consisting of 61 royalties, 6 streams and 7
precious metal offtakes for $1.1 billion. The final acquisition price was comprised of US$504.8 million ($630.1 million) in cash
consideration, which includes a US$4.2 million ($5.1 million) adjustment for the acquired working capital, and 30,906,594 common
shares of Osisko issued to Orion (the "Purchase Price") (the "Transaction"). Any sale of the shares issued to Orion is subject to
certain restrictions, including a 12-month hold period and a broad distribution requirement.
The combination of Osisko and Orion's portfolios resulted in Osisko holding a total of 131 royalties, streams and offtakes,
including 16 revenue-generating assets on July 31, 2017. Through the Transaction, the Company acquired a 9.6% diamond stream on
the Renard diamond mine and a 4% gold and silver stream on the Brucejack gold and silver mine, both of which are new mines in
Canada, in addition to a 100% silver stream on the Mantos Blancos copper mine in Chile. Certain assets are held through an
international wholly-owned subsidiary which was renamed Osisko Bermuda Limited ("OBL"). The Brucejack stream is subject to
certain buyback rights held by Pretium Resources Inc. which could result in the stream being repurchased on December 31, 2018 and
other specific dates.
As part of the Transaction, CDP Investissements Inc., an affiliate of Caisse de dépôt et placement du Québec ("Caisse") and
the Fonds de solidarité des travailleurs du Québec (F.T.Q.) ("Fonds F.T.Q.") subscribed for $200 million and $75 million in
common shares of Osisko, respectively, as part of a concurrent private placement ("Private Placement") to fund a portion of the
cash consideration and support the Transaction. A total of 18,887,363 common shares were issued at a price of $14.56 per share
under the Private Placement. The Private Placement was subject to a 7% capital commitment payment payable partially in shares (2%
representing 385,457 common shares) and in cash (5% representing $13.8 million).
Following the Transaction, Orion, Caisse and its affiliates and Fonds F.T.Q. held respectively approximately 19.7%, 12.1% and
5.5% of Osisko's issued and outstanding common shares, based on the number of common shares of Osisko outstanding at the closing
of the Transaction on July 31, 2017.
Osisko also drew US$118 million ($147.3 million) under its revolving credit facility with the National Bank of Canada and Bank
of Montreal, settled the foreign exchange forward contracts by disbursing $275 million to acquire US$204.0 million and
paid US$182.8 million ($228.9 million) from Osisko's then current cash and cash equivalents balance.
The transaction has been recorded as a business combination with Osisko as the acquirer. The assets acquired and the
liabilities assumed were recorded at their estimated fair market values at the time of the closing of the acquisition, being
July 31, 2017. The transaction costs related to the acquisition were expensed under business development expenses and
amounted to $8.9 million.
The table below presents the purchase price allocation (in thousands of dollars):
| Consideration paid |
$ |
|
| |
Cash(1) |
648,385 |
|
| |
Issuance of 30,906,594 common shares(2) |
445,333 |
|
| |
1,093,718 |
|
| Net assets acquired |
$ |
|
| |
Cash and cash equivalents |
8,707 |
|
| |
Other current assets |
1,217 |
|
| |
Royalty, stream and other interests |
1,116,115 |
|
| |
Current liabilities |
(435 |
) |
| |
Deferred income tax liability |
(31,886 |
) |
| |
1,093,718 |
|
| (1) |
Including the net loss on settlement of derivative financial instruments (cash flow hedges) of $18.2
million. |
| (2) |
The fair value of the consideration paid in common shares represents the fair value of the shares on July
31, 2017 minus an illiquidity discount to take into account the twelve-month restrictions on their sales. |
| |
| Summary of Main Royalty, Stream and Other Interests Acquired |
| Asset |
Operator |
Interest |
Commodities |
Jurisdiction |
Stage |
| Renard |
Stornoway Diamonds Corporation |
9.6% Stream |
Diamond |
Canada |
Production |
| Mantos Blancos |
Mantos Copper S.A. |
100% Stream |
Ag |
Chile |
Production |
| Brucejack |
Pretium Resources Inc. |
4% Stream / Offtake |
Au, Ag |
Canada |
Production |
| Sasa |
Central Asia Metals plc |
100% Stream |
Ag |
Macedonia |
Production |
| Matilda |
Blackham Resources Limited |
Offtake |
Au |
Australia |
Production |
| Parral |
GoGold Resources Inc. |
Offtake |
Au |
Mexico |
Production |
| San Ramon |
Red Eagle Mining Corp. |
Offtake |
Au |
Colombia |
Production |
| Seabee |
SSR Mining Inc. |
3% NSR(1) Royalty |
Au |
Canada |
Production |
| Bald Mtn. Alligator Ridge |
Kinross Gold Corporation |
1% NSR Royalty |
Au |
USA |
Production |
| Bald Mtn. Duke/ Trapper |
Kinross Gold Corporation |
4% NSR Royalty |
Au |
USA |
Production |
| Brauna |
Lipari Mineração |
1% GRR(2) Royalty |
Diamond |
Brazil |
Production |
| Kwale |
Base Resources Limited |
1.5% GRR Royalty |
Rutile, Ilmenite, zircon |
Kenya |
Production |
| Pan |
Fiore Gold Ltd. |
4% NSR Royalty |
Au |
USA |
Production |
| Amulsar |
Lydian International Ltd. |
4.22% Au Stream, 62.5% Ag Stream / Offtake |
Au, Ag |
Armenia |
Development |
| Back Forty |
Aquila Resources Inc. |
75% Stream |
Ag |
USA |
Development |
| Casino |
Western Copper & Gold Corporation |
2.75% NSR Royalty |
Au, Ag, Cu |
Canada |
Exploration |
| Spring Valley |
Waterton Global Resource Management |
0.5% NSR Royalty |
Au |
USA |
Exploration |
| Yenipazar |
Aldridge Minerals Inc. |
Offtake |
Au |
Turkey |
Exploration |
| (1) |
Net Smelter Return ("NSR") |
| (2) |
Gross Revenue Royalty ("GRR") |
Acquisition of Back-Forty Gold Stream
The Back Forty project is a zinc and gold volcanogenic massive sulfide deposit located in Michigan, United States, owned by
Aquila Resources Inc. ("Aquila"). The Back Forty project is in the development stage and advancing toward a feasibility study
expected in 2018. Back Forty is expected to produce 532,000 ounces of gold, 721 million pounds ("lbs") of zinc, 74 million lbs of
copper, 4.6 million ounces of silver, and 21 million lbs of lead. The details of the mineral inventory can be found under
Aquila's profile on SEDAR at www.sedar.com . Through
the acquisition of Orion's Portfolio, Osisko acquired the Back Forty silver stream, which applies to 75% of payable silver
production over the mine's operating life and includes ongoing transfer payments by OBL to Aquila of US$4.00 per ounce of refined
silver delivered under the stream.
In November 2017, OBL acquired an additional gold stream on the Back Forty project. OBL will make staged upfront cash deposits
to Aquila of up to US$55 million for the gold stream, and will make ongoing payments equal to 30% of the spot price of gold, to a
maximum of US$600 per ounce. The gold stream applies to 18.5% of the refined gold from the project until 105,000 ounces of gold
have been delivered, and to 9.25% of the refined gold for the remaining life-of-mine.
The deposit will be paid in four installments, as follows:
- US$7.5 million was paid on closing of the gold stream transaction;
- US$7.5 million payable upon receipt by Aquila of all material permits required for the development and operation of the
project, and receipt of a positive feasibility study;
- US$10 million payable following a positive construction decision for the property; and
- US$30 million payable upon the first drawdown of an appropriate project debt finance facility, subject to the change of
control provision. In the event of a change of control of Aquila prior to the advancement of the fourth deposit, the person or
entity acquiring control over the project may elect to forego the fourth deposit, in which case the stream will be reduced to
9.5% of the refined gold from the project until 105,000 ounces of gold have been delivered and to 4.75% of the refined gold for
the remaining life-of-mine. All other terms and conditions will remain unchanged.
Gibraltar Stream (Taseko Mines Limited)
On March 3, 2017, Osisko closed the acquisition of a silver stream with reference to silver produced at the Gibraltar copper
mine ("Gibraltar"), located in British Columbia, Canada from Gibraltar Mines Ltd. ("Gibco"), a wholly-owned subsidiary of Taseko
having a 75% interest in Gibraltar. Osisko paid Taseko cash consideration of US$33.0 million ($44.3 million) to purchase a silver
stream and 3.0 million warrants of Taseko. Each warrant allows Osisko to acquire one common share of Taseko at a price of $2.74
until April 1, 2020. The fair value of the warrants was evaluated at $1,780,000 using the Black-Scholes option pricing model and
the residual value of $42,678,000 was attributed to the silver stream (including $175,000 of transaction fees). With regards to
the silver stream, Osisko will make ongoing payments of US$2.75 per ounce of silver delivered.
Under the stream, Osisko will receive from Taseko an amount equal to 100% of Gibco's share of silver production until the
delivery to Osisko of 5.9 million ounces of silver to Osisko and 35% of Gibco's share of silver production thereafter. Gibraltar
is the second largest open pit copper mine in Canada and fourth largest in North America. The life of mine yearly average
production from Gibraltar is approximately 140 million lbs of copper and 2.6 million lbs of molybdenum. With a large mineral
reserve of 3.2 billion lbs of recoverable copper and 58 million lbs of molybdenum, the estimated mine life of the project is 23
years (proven and probable mineral reserves as of January 1, 2016). The acquisition is expected to increase Osisko's production
by approximately 200,000 ounces of silver for the next 14 years, increasing to an average of 350,000 ounces of silver for the
remainder of the 23-year mineral reserve life of Gibraltar. Any silver in respect of which a delivery was made after January 1,
2017, was subject to the stream.
Revolving Credit Facility
In November 2017, the Company amended its revolving credit facility (the "Facility") increasing the amount from $150 million
to $350 million, with an additional uncommitted accordion of up to $100 million, for a total availability of up to $450 million.
The accordion is subject to standard due diligence procedures and acceptance of the lenders. The Facility is to be used for
general corporate purposes and investments in the mineral industry, including the acquisition of royalties, streams and other
interests. The Facility is secured by the Company's assets (including the royalty, stream and other interests) and has a
four-year term (November 14, 2021), which can be extended by one year on each of the first two anniversary dates.
The Facility is subject to standby fees. Funds drawn will bear interest based on the base rate, prime rate or London
Inter-Bank Offer Rate ("LIBOR") plus an applicable margin depending on the Company's leverage ratio. On July 31, 2017, the
Facility was drawn for US$118.0 million (representing $148.0 million as at December 31, 2017) to fund the acquisition of Orion's
Portfolio. As at December 31, 2017, the interest rate was 2.96%, including the applicable margin. The Facility includes covenants
that require the Company to maintain certain financial ratios and meet certain non-financial requirements. As at
December 31, 2017, all such ratios and requirements were met.
Bought Deal of Convertible Senior Unsecured Debentures
On November 3, 2017, Osisko closed a bought deal offering of convertible senior unsecured debentures (the "Debentures") for
$300 million (the "Offering") with a syndicate of underwriters co-led by National Bank Financial Inc., BMO Capital Markets
and Desjardins Capital Markets (the "Underwriters"). The Offering was comprised of a $184.0 million public offering of Debentures
(the "Public Offering") and a $116.0 million private placement of Debentures (the "Private Offering"). In connection with the
Offering, the Public Sector Pension Investment Board and Ressources Québec inc., a wholly-owned subsidiary of Investissement
Québec, purchased respectively $100.0 million and $16.0 million of Debentures through the Private Offering on the same terms and
conditions as the Public Offering. The Underwriters have received a commission of 3.55% in relation to the Offering. Net proceeds
amounted to $288.5 million.
The Debentures bear interest at a rate of 4.0% per annum, payable semi-annually on June 30 and December 31 of each year,
commencing on June 30, 2018. The Debentures are convertible at the holder's option into Osisko common shares at a conversion
price of $22.89 per common share. The Debentures will mature on December 31, 2022 and may be redeemed by Osisko, in certain
circumstances, on or after December 31, 2020. The Debentures are listed for trading on the Toronto Stock Exchange under the
symbol "OR.DB". The net proceeds from the Offering will be used to fund the acquisition of precious metal royalties, streams,
working capital, and general corporate purposes.
Record Gold Equivalent Ounces Earned
The Company's portfolio of producing royalty, stream and offtake interests delivered a record 20,990 GEOs in the fourth
quarter of 2017 for a total record of 58,933 GEOs for the full year 2017. The assets acquired from Orion were the major
contributors to the record quarterly GEOs earned by the Company, while Canadian Malartic continued to generate strong
results.
| Royalties Earned (in GEOs) |
| |
Three months ended
December 31, |
|
Years ended
December 31, |
| |
2017 |
2016 |
|
2017 |
2016 |
| Gold |
|
|
|
|
|
| Canadian Malartic royalty |
10,177 |
6,749 |
|
33,136 |
28,748 |
| Éléonore royalty |
1,532 |
1,343 |
|
6,390 |
6,568 |
| Seabee royalty(1) |
619 |
- |
|
1,310 |
- |
| Island Gold royalty |
379 |
292 |
|
1,706 |
1,373 |
| Brucejack offtake(1) |
321 |
- |
|
536 |
- |
| Vezza royalty |
274 |
342 |
|
1,253 |
830 |
| Other(1) |
330 |
124 |
|
869 |
294 |
| |
13,632 |
8,850 |
|
45,200 |
37,813 |
| Silver |
|
|
|
|
|
| Mantos stream(1) |
1,910 |
- |
|
3,060 |
- |
| Sasa stream(1) |
1,229 |
- |
|
2,074 |
- |
| Gibraltar stream (3 and 11 months) |
665 |
- |
|
2,303 |
- |
| Canadian Malartic royalty |
138 |
114 |
|
479 |
456 |
| Other(1) |
78 |
- |
|
129 |
1 |
| |
4,020 |
114 |
|
8,045 |
457 |
| Diamonds |
|
|
|
|
|
| Renard stream(1) |
2,839 |
- |
|
4,686 |
- |
| Other(1) |
88 |
- |
|
201 |
- |
| |
2,927 |
- |
|
4,887 |
- |
| Other metals |
|
|
|
|
|
| Kwale royalty(1) |
411 |
- |
|
801 |
- |
| Total GEOs |
20,990 |
8,964 |
|
58,933 |
38,270 |
| (1) |
The effective date of the acquisition of Orion's Portfolio was June 1, 2017. However, revenues of royalties,
streams and offtakes acquired from Orion are only included in revenues from July 31, 2017 onward, the acquisition date for
accounting purposes. |
To view the GEOs by Product graphic, please click here.
| Revenues |
|
| |
Three months ended December 31, |
| |
2017 |
2016 |
| |
Average selling price
per ounce / carats ($) |
Ounces
/ Carats
sold |
Total revenues
($000's) |
Average selling price per ounce
($) |
Ounces
/ Carats
sold |
Total revenues
($000's) |
| Gold sold |
1,623 |
56,708 |
92,043 |
1,549 |
8,605 |
13,328 |
| Silver sold |
21 |
483,192 |
10,411 |
21 |
8,353 |
179 |
| Diamonds sold |
106 |
43,550 |
4,603 |
- |
- |
- |
| Other (paid in cash) |
- |
- |
2,495 |
- |
- |
202 |
| |
|
|
109,552 |
|
|
13,709 |
| |
| |
Years ended December 31, |
| |
2017 |
2016 |
| |
Average selling price
per ounce / carats ($) |
Ounces
/ Carats
sold |
Total revenues
($000's) |
Average selling price per ounce
($) |
Ounces
/ Carats
sold |
Total revenues
($000's) |
| Gold sold |
1,627 |
111,501 |
181,390 |
1,643 |
37,402 |
61,444 |
| Silver sold |
22 |
887,760 |
19,216 |
23 |
32,836 |
747 |
| Diamonds sold |
106 |
71,150 |
7,560 |
- |
- |
- |
| Other (paid in cash) |
- |
- |
5,050 |
- |
- |
486 |
| |
|
|
213,216 |
|
|
62,677 |
| |
|
| Gross Profit ($000) |
|
|
|
|
|
| |
Three months ended December 31, |
|
|
Years ended December 31, |
|
| |
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
| Royalties |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
21,359 |
|
|
13,709 |
|
|
74,041 |
|
|
62,677 |
|
| Cost of sales |
(130 |
) |
|
(22 |
) |
|
(286 |
) |
|
(143 |
) |
| Depletion |
(4,305 |
) |
|
(2,828 |
) |
|
(15,475 |
) |
|
(11,291 |
) |
| |
16,924 |
|
|
10,859 |
|
|
58,280 |
|
|
51,243 |
|
| Streams |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
10,855 |
|
|
- |
|
|
19,751 |
|
|
- |
|
| Cost of sales |
(4,378 |
) |
|
- |
|
|
(7,385 |
) |
|
- |
|
| Depletion |
(7,452 |
) |
|
- |
|
|
(11,283 |
) |
|
- |
|
| |
(975 |
) |
|
- |
|
|
1,083 |
|
|
- |
|
| Offtakes |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
77,338 |
|
|
- |
|
|
119,424 |
|
|
- |
|
| Cost of sales |
(76,550 |
) |
|
- |
|
|
(117,974 |
) |
|
- |
|
| Depletion |
(990 |
) |
|
- |
|
|
(1,307 |
) |
|
- |
|
| |
(202 |
) |
|
- |
|
|
143 |
|
|
- |
|
| Total - Gross profit |
15,747 |
|
|
10,859 |
|
|
59,506 |
|
|
51,243 |
|
Overview of 2017 Financial Results
- Record revenues from royalties and streams of $93.8 million ($213.2 million including offtakes) compared to
$62.7 million in 2016;
- Gross profit of $59.5 million compared to $51.2 million in 2016;
- Impairment charge of $89.0 million on the Éléonore NSR royalty interest ($65.4 million, net of income taxes);
- Operating loss of $70.4 million compared to an operating income of $29.1 million in 2016;
- Net loss attributable to Osisko's shareholders of $42.5 million or $0.33 per basic and diluted share, compared to net
earnings of $42.1 million or $0.40 per basic and diluted share in 2016;
- Adjusted earnings4 of $22.7 million or $0.18 per basic share4 compared to $34.2 million or $0.33 per
basic share in 2016;
- Net cash flows provided by operating activities of $48.7 million compared to $53.4 million in 2016.
| 4 |
"Adjusted earnings" and "Adjusted earnings per basic share" are non-IFRS financial performance measures
which have no standard definition under IFRS. Refer to the non-IFRS performance measures section of this press
release. |
Revenues increased in 2017 mainly as a result of the acquisition of Orion's Portfolio.
Gross profit reached $59.5 million in 2017 compared to $51.2 million in 2016 as a result of higher revenues. Cost of sales
increased from $0.1 million in 2016 to $125.6 million mainly as a result of the offtake agreements acquired through the
acquisition of Orion's Portfolio. Under the offtake agreements, the metal is acquired from the producers at the lowest market
price over a certain period of time (quotational period), and is subsequently sold by Osisko, resulting in a net profit that will
usually vary between 0% and 5% of the sales proceeds.
In 2017, the Company incurred an operating loss as a result of an impairment charge of $89.0 million on the Éléonore royalty
interest. Excluding the impairment charge, operating income would have amounted to $18.6 million compared to $29.1 million in
2016. The decrease in operating income in 2017, in addition to the impairment charge, is mainly the result of the transaction
costs related to the acquisition of Orion's Portfolio, which amounted to $8.9 million and higher general and administrative
expenses ("G&A"), partially offset by higher gross profit. The increase in G&A expenses is mainly due to higher salary
expenses as a result of higher bonuses payable to management following the acquisition of Orion's Portfolio, higher share-based
compensation expenses related to the deferred and restricted share units (higher number of units outstanding and increase in the
objectives achievements related to 2014 RSUs which vested and were paid in September 2017) and higher general costs due to the
increased activities of the Company in 2017. The year 2017 is the first year where 3 years of stock options, RSUs and DSUs are
outstanding. Stock options and RSUs vest over a three-year period. Business development expenses increased by $10.4 million
mainly as a result of the transaction costs related to the acquisition of Orion's Portfolio, higher bonuses payable to
management, higher share-based compensation expenses related to the deferred and restricted share units and higher general costs
due to increased activities in 2017.
The net loss attributable to Osisko's shareholders in 2017 is mainly the result of the impairment charge of $89.0 million, a
lower operating income, a higher foreign exchange loss, higher finance costs, the absence of dividend income following the sale
of the shares of Labrador Iron Ore Royalty Corporation in 2016 and early 2017, partially offset by higher interest income.
Adjusted earnings decreased to $22.7 million compared to $34.2 million in 2016 as a result of higher G&A, lower dividend
income and higher finance costs, partially offset by higher gross profit.
Net cash flows provided by operating activities decreased in 2017 as a result of the fees related to the acquisition of
Orion's Portfolio and the settlement of restricted share units for $5.5 million, partially offset by higher gross profit.
Investment Portfolio Update
During the year ended December 31, 2017, Osisko acquired investments for $226.8 million and sold investments for $71.1
million.
The following table presents the carrying value and fair value of the investments in marketable securities as at December 31,
2017 (in thousands of dollars):
| Marketable securities |
|
Carrying value(i) |
|
Fair value(ii) |
| |
|
$ |
|
$ |
| Associates |
|
257,433 |
|
332,140 |
| Other |
|
106,841 |
|
106,841 |
| |
|
364,274 |
|
438,981 |
| (i) |
The carrying value corresponds to the amount recorded on the balance sheet, which is the equity method for
the investments in marketable securities of associates and the fair value for the other investments in marketable
securities, as per IFRS 9, Financial Instruments. |
| (ii) |
The fair value corresponds to the quoted price of the investments in a recognized stock exchange as at
December 31, 2017. |
Main Strategic Investments
The following table presents the main strategic investments of the Company (in thousands of dollars):
Company |
|
Number of
shares held(i) |
|
Ownership(i) |
|
Carrying value(i),(ii) |
|
Fair value(i),(ii) |
| |
|
|
|
% |
|
$ |
|
$ |
| Osisko Mining Inc. |
|
32,302,034 |
|
15.5 |
|
73,635 |
|
109,504 |
| Barkerville Gold Mines Ltd. |
|
142,309,310 |
|
32.7 |
|
89,556 |
|
106,732 |
| Dalradian Resources Inc. |
|
31,717,687 |
|
8.9 |
|
40,122 |
|
42,026 |
| Falco Resources Ltd. |
|
23,927,005 |
|
12.7 |
|
15,652 |
|
20,817 |
| |
|
|
|
|
|
|
|
|
| (i) |
As at December 31, 2017. |
| (ii) |
See table above for definition of carrying value and fair value. |
Osisko Mining Inc.
The Company owns a 1.5% NSR royalty on the Windfall Lake gold project ("Windfall Lake"). Osisko Mining Inc. ("Osisko Mining")
is currently undergoing an 800,000 meter drill program at Windfall Lake, where the 400,000 meter milestone was reached in October
2017. A metallurgical program is ongoing and the construction of the exploration ramp is progressing. Osisko Mining is planning a
resource update in the first half of 2018.
Barkerville Gold Mines Ltd. 5
Barkerville Gold Mines Ltd. ("Barkerville") is currently carrying out a 160,000 meter exploration drilling program in the
Cariboo Mining District of central British Columbia and reported that it has received all permits to initiate production from its
Bonanza Ledge underground project at an initial rate of 150,000 tonnes per year. In April 2017, Barkerville announced a new
discovery from its ongoing 160,000 metres Phase II Island Mountain and Valley Zone exploration drilling program at its Cariboo
Gold Project.
Osisko holds a 2.25% NSR royalty on the Cariboo gold project and has a right of first refusal relating to any gold stream
offer received by Barkerville with respect to the Cariboo gold project.
| 5 |
Refer to Barkerville's press release dated April 17, 2017, titled "BGM intersects 19.20 g/t AU over 54.40 meters and
11.42 g/t AU over 28.55 meters at shaft zone" and Barkerville's website at http://www.barkervillegold.com/ and on SEDAR for additional information.
|
Falco Resources Ltd.
In October 2017, Falco Resources Ltd. ("Falco") released6 a positive feasibility on the Horne 5 project. The
feasibility study indicated that, at a gold price of US$1,300/oz and using an exchange rate of C$1.00 = US$0.78, the Horne 5
Project would generate an after-tax net present value, at a 5% discount rate, of US$602 million and an after-tax internal rate of
return of 15.3%. As per Falco, in this scenario, the mine could become the next significant gold producer in Québec, with a
production profile averaging 219,000 payable ounces annually over the life of mine, with an all-in sustaining cash cost of US$399
per ounce net of by-product credits and all-in cost, capital expenditures plus operating expenditures, estimated at US$643 per
ounce. The Environmental Impact Assessment study was filed with the authorities in December 2017.
| 6 |
Refer to Falco's press release dated October 16, 2017, titled: "Falco Announces Positive Feasibility Study
Results on Horne 5 Gold Project". |
Dalradian Resources Inc.
On October 10, 2017, Osisko entered into a subscription agreement with Dalradian Resources Inc ("Dalradian") pursuant to which
Osisko made an investment of $28.3 million in Dalradian by way of a non-brokered private placement. The subscription agreement
entered into with Dalradian contains various covenants and rights, including among other things, a standstill, participation
rights to maintain Osisko's pro rata interest in Dalradian and rights to match other offers for project financing.
Other Significant Investments
Arizona Mining Inc.
Over the second half of 2017, Osisko sold its equity interest in Arizona Mining Inc, ("Arizona Mining") for proceeds of
$47.1 million, including from the sale of shares following the exercise of warrants in October 2017. Osisko realized a
pre-tax accounting gain of $30.2 million (including the change in fair value of the warrants) on the transaction and a gain of
$34.1 million based on the cash cost7 of the shares. Osisko still holds a 1% NSR royalty purchased for $10.0
million in April 2016 on all sulfide ores of lead and zinc (and any copper, silver or gold recovered from the concentrate from
such ores) mined from Arizona Mining's Hermosa project located in Santa Cruz County, Arizona.
| 7 |
The cash cost of an investment is a non-IFRS measure representing the cash paid on the acquisition of an
investment. The gain or the loss is calculated by subtracting the cash acquisition cost from the cash proceeds on the sale
of an investment. |
Dividends
Osisko has declared dividends for the last 14 consecutive quarters for a total of $55.1 million.
On November 7, 2017, Osisko declared a quarterly dividend of $0.05 per common share paid on January 15, 2018 to shareholders
of record as of the close of business on December 29, 2017.
On February 16, 2018, the Board of Directors declared a quarterly dividend of $0.05 per common share payable on April 16, 2018
to shareholders of record as of the close of business on March 30, 2018.
2018 Guidance
Osisko's 2018 outlook on royalty, stream and precious metal offtake interests is based on publicly available forecasts, in
particular the forecasts for the Canadian Malartic mine published by Yamana Gold Inc. and Agnico Eagle Mines Limited, for the
Éléonore mine published by Goldcorp Inc., for the Renard mine published by Stornoway Diamonds Corporation, for the Brucejack mine
published by Pretium Resources Inc., and for the Island Gold mine published by Alamos Gold Inc. When publicly available forecasts
on properties are not available, Osisko obtains internal forecasts from the operators, which is the case for the Sasa and Mantos
Blancos mines, or uses management's best estimate.
Attributable gold equivalent ounces for 2018 are estimated between 77,500 and 82,500. For the 2018 guidance, silver and cash
royalties have been converted to GEOs using commodity prices of US$1,300 per ounce of gold, US$18 per ounce of silver and US$110
per carat for diamonds from the Renard mine and an exchange rate (US$/C$) of 1.25.
Éléonore NSR Royalty Interest
In February 2015, Osisko acquired all of the outstanding common shares of Virginia Mines Inc. ("Virginia"). The assets
acquired included a 2.0-3.5% NSR royalty on the Eléonore mine discovered by Virginia and owned by Goldcorp Inc. Through the
combination of the two companies, Osisko achieved its objective of creating a new intermediate royalty company with two
world-class gold royalty assets in Québec. Operations started at the Eléonore mine in October 2014 and commercial production was
declared in April 2015.
Gold production for the year ended December 31, 2017 was higher than the prior years at 305,000 ounces compared to 274,000
ounces in 2016 and 268,000 ounces in 2015 due to increase in grade and mined tonnes as Éléonore continued its ramp up to
optimized production levels. For 2018, the operator's guidance is at 360,000 ounces.
Gold ounces earned from the Éléonore NSR royalty:
| 2015(1) |
|
2016 |
|
2017 |
|
2018 Guidance |
|
2019+ Guidance(2) |
| 402 |
|
6,568 |
|
6,390 |
|
7,920 |
|
8,800 |
| (1) |
Osisko started receiving royalties in December 2015 only due to the royalty advance payment to
Virginia. |
| (2) |
Based on operator's guidance of 400,000 sustainable annual gold production. As per the sliding scale
schedule of up to 3.5%, Osisko could potentially receive up to 14,000 ounces annually once 8 million ounces have been
produced. |
For accounting purposes, Osisko is required to monitor indicators of impairment, which can trigger an impairment review of its
assets. The operator of the Éléonore gold mine announced a sustainable annual gold production level at 400,000 ounces of gold
compared to its design capacity of 600,000 ounces annually. This announcement was considered as an indicator of impairment and,
accordingly, management performed an impairment assessment as at December 31, 2017. The Company recorded an impairment charge of
$89.0 million ($65.4 million net of income taxes) on the Éléonore NSR royalty during the fourth quarter of 2017. This impairment
charge may be reversed subsequently if there is a sustainable increase in annual production levels.
2017 Year-End Results Conference Call
Osisko will host a conference call on Tuesday, February 20, 2018 at 11:00 EST to review and discuss its 2017 results.
Those interested in participating in the conference call should dial in at 1-(647) 788-4922 (international), or 1-(877)
223-4471 (North American toll free). An operator will direct participants to the call.
The conference call replay will be available from 2:00pm EST on February 20, 2018 until 11:59 pm EST on February 27, 2018 with
the following dial in numbers: 1-(800) 585-8367 (North American toll free) or 1-(416) 621-4642, access code 2868047.
Non-IFRS Financial Performance Measures
The Company has included certain non-IFRS measures including "Adjusted Earnings" and "Adjusted Earnings per basic
share" to supplement its consolidated financial statements, which are presented in accordance with IFRS.
The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an
improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning
prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data 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.
To determine its method of calculation, the Company has reviewed, during the first quarter of 2016, similar adjusted earnings
calculations by its peers. Following this review, the Company has decided to exclude the gains and losses on foreign exchange
from its adjusted earnings and adjusted earnings per basic share as they do not reflect the operating performance of the
Company.
Adjusted Earnings and Adjusted Earnings per Basic Share
"Adjusted earnings" is defined as "Net earnings (loss) attributable to Osisko's shareholders" less certain items: "Foreign
exchange gain (loss)", "Impairment charges", "Gains (losses) on disposal of evaluation and evaluation assets", "Write-off of
property and equipment", "Unrealized gain (loss) on investments", "Impairment on financial assets and investments in associates",
"Share of income (loss) of associates", "Deferred income tax expense" and other unusual items such as transaction costs.
Adjusted earnings per basic share is obtained from the "adjusted earnings" divided by the "Weighted average number of
common shares outstanding" for the period.
| |
Three months ended
December 31, |
|
Years ended
December 31, |
|
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
| |
|
|
|
|
|
|
|
|
| (in thousands of dollars, except per share amounts) |
$ |
|
$ |
|
$ |
|
$ |
|
| Net earnings (loss) attributable to Osisko's shareholders |
(64,348 |
) |
8,679 |
|
(42,501 |
) |
42,113 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
| |
Foreign exchange loss (gain) |
763 |
|
(5,319 |
) |
16,211 |
|
5,851 |
|
| |
Unrealized loss (gain) on investments |
507 |
|
(660 |
) |
(30,829 |
) |
(30,202 |
) |
| |
Share of loss of associates |
3,482 |
|
2,893 |
|
6,114 |
|
6,623 |
|
| |
Impairment of royalty, stream and other interests |
89,000 |
|
- |
|
89,000 |
|
- |
|
| |
Impairment of exploration and evaluation assets |
- |
|
668 |
|
- |
|
668 |
|
| |
Loss (gain) on disposal of exploration and evaluation assets |
- |
|
- |
|
(20 |
) |
312 |
|
| |
Write-off of property and equipment |
- |
|
456 |
|
- |
|
456 |
|
| |
Deferred income tax expense |
(28,453 |
) |
216 |
|
(24,150 |
) |
8,372 |
|
| |
Transaction costs - acquisition of Orion's Portfolio |
- |
|
- |
|
8,870 |
|
- |
|
| Adjusted earnings |
951 |
|
6,934 |
|
22,695 |
|
34,194 |
|
| Weighted average number of common shares outstanding (000's) |
157,256 |
|
106,612 |
|
127,939 |
|
104,671 |
|
| Adjusted earnings per basic share |
0.01 |
|
0.07 |
|
0.18 |
|
0.33 |
|
About Osisko Gold Royalties Ltd
Osisko Gold Royalties Ltd is an intermediate precious metal royalty company focused on the Americas that commenced activities
in June 2014. Following the acquisition of the Orion portfolio, it now holds a North American focused portfolio of over 130
royalties, streams and precious metal offtakes. Osisko's portfolio is anchored by five cornerstone assets, including a 5% NSR
royalty on the Canadian Malartic Mine, which is the largest gold mine in Canada. Osisko also owns a portfolio of investments in
publicly held resource companies, including a 15.5% interest in Osisko Mining Inc., a 32.7% in Barkerville Gold Mines Ltd. and a
12.7% interest in Falco Resources Ltd.
Osisko's head office is located at 1100 Avenue des Canadiens-de-Montréal, Suite 300, Montréal, Québec, H3B 2S2.
Forward-looking Statements
Certain statements contained in this press release may be deemed "forward-looking information" and "forward-looking
statements" within the meaning of applicable Canadian Securities Laws and the United States Private Securities Litigation Reform
Act of 1995 (collectively, the "forward-looking statements"). All statements in this release, other than statements of historical
fact, that address future events, developments or performance that Osisko expects to occur including management's expectations
regarding Osisko's growth, results of operations, estimated future revenues, requirements for additional capital, mineral reserve
and mineral resource estimates, production estimates, production costs and revenue, future demand for and prices of commodities,
business prospects and opportunities are forward-looking statements. In addition, statements (including data in tables) relating
to mineral reserves and mineral resources and gold equivalent ounces are forward-looking statements, as they involve implied
assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates will be realized.
Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the
words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar
expressions or variations (including negative variations), or that events or conditions "will", "would", "may", "could" or
"should" occur including, without limitation, the performance of the assets of Osisko, the realization of the anticipated
benefits deriving from Osisko's investments and transactions and the estimate of gold equivalent ounces to be received in 2018.
Although Osisko believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such
statements involve known and unknown risks, uncertainties and other factors and are not guarantees of future performance and
actual results may accordingly differ materially from those in forward-looking statements. Factors that could cause the actual
results to differ materially from those in forward-looking statements include, without limitation: fluctuations in the
prices of the commodities that drive royalties, streams and other interests (the "Interests") held by Osisko (gold, silver and
diamonds); fluctuations in the value of the Canadian dollar, and any other currency in which revenue is generated, relative to
the U.S. dollar; regulatory changes in national and local government, including permitting and licensing regimes and taxation
policies; regulations and political or economic developments in any of the countries where properties in which Osisko holds an
Interest are located or through which they are held; risks related to the operators of the properties in which Osisko holds an
Interest, influence of macroeconomic developments; business opportunities that become available to, or are pursued by Osisko;
continued availability of capital and financing and general economic, market or business conditions; litigation; title, permit or
license disputes related to interests on any of the properties in which Osisko holds an Interest; whether or not Osisko is
determined to have "passive foreign investment company" ("PFIC") status as defined in Section 1297 of the United States Internal
Revenue Code of 1986, as amended; potential changes in Canadian tax treatments of offshore streams or other interests;
development, permitting, infrastructure, operating or technical difficulties on any of the properties in which Osisko holds an
Interest; rate and timing of production differences from mineral resource estimates or production forecasts by operators of
properties in which Osisko holds an Interest; risks and hazards associated with the business of exploring, development and mining
on any of the properties in which Osisko holds an Interest, including, but not limited to unusual or unexpected geological and
metallurgical conditions, slope failures or cave-ins, flooding and other natural disasters, terrorism, or civil unrest or other
uninsured risks and the integration of acquired assets.
The forward-looking statements contained in this press release are based upon assumptions management believes to be reasonable,
including, without limitation: the ongoing operation of the properties in which Osisko holds an Interest by the owners or
operators of such properties in a manner consistent with past practice; the accuracy of public statements and disclosures made by
the owners or operators of such underlying properties; no material adverse change in the market price of the commodities that
underlie the asset portfolio; Osisko's ongoing income and assets relating to the determination of its PFIC status, no material
changes to existing tax treatments, no adverse development in respect of any significant property in which Osisko holds an
Interest; the accuracy of publicly disclosed expectations for the development of underlying properties that are not yet in
production; and the absence of any other factors that could cause actions, events or results to differ from those anticipated,
estimated or intended.
For additional information with respect to these and other factors and assumptions underlying the forward-looking
statements made in this press release, see the section entitled "Risk Factors" in the most recent Annual Information Form of
Osisko which is filed with the Canadian securities commissions and available electronically under Osisko's issuer profile on
SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission on
EDGAR at www.sec.gov. The forward-looking statements set forth herein reflects
Osisko's expectations as at the date of this press release and is subject to change after such date. Osisko disclaims any
intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events
or otherwise, other than as required by law.
| Osisko Gold Royalties Ltd |
| Consolidated Balance Sheets |
| As at December 31, 2017 and 2016 |
| (tabular amounts expressed in thousands of Canadian dollars) |
| |
December 31, |
|
|
December 31, |
| |
2017 |
|
|
2016 |
| |
$ |
|
|
$ |
| Assets |
|
|
|
|
| Current assets |
|
|
|
|
| |
Cash and cash equivalents |
333,705 |
|
|
499,249 |
| |
Short-term investments |
- |
|
|
2,100 |
| |
Accounts receivable |
8,385 |
|
|
8,416 |
| |
Inventories |
9,859 |
|
|
- |
| |
Other assets |
984 |
|
|
974 |
| |
352,933 |
|
|
510,739 |
| Non-current assets |
|
|
|
|
| |
Investments in associates |
257,433 |
|
|
82,902 |
| |
Other investments |
115,133 |
|
|
108,409 |
| |
Royalty, stream and other interests |
1,575,772 |
|
|
494,768 |
| |
Exploration and evaluation |
102,182 |
|
|
100,038 |
| |
Goodwill |
111,204 |
|
|
111,204 |
| |
Deferred income taxes |
- |
|
|
7,978 |
| |
Other assets |
1,686 |
|
|
266 |
| |
2,516,343 |
|
|
1,416,304 |
| Liabilities |
|
|
|
|
| Current liabilities |
|
|
|
|
| |
Accounts payable and accrued liabilities |
15,310 |
|
|
7,438 |
| |
Dividends payable |
7,890 |
|
|
4,266 |
| |
Provisions and other liabilities |
5,632 |
|
|
4,153 |
| |
28,832 |
|
|
15,857 |
| Non-current liabilities |
|
|
|
|
| Long-term debt |
464,308 |
|
|
45,780 |
| Provisions and other liabilities |
2,036 |
|
|
12,433 |
| Deferred income taxes |
126,762 |
|
|
127,930 |
| |
621,938 |
|
|
202,000 |
| Equity |
|
|
|
|
| |
Share capital |
1,633,013 |
|
|
908,890 |
| |
Warrants |
30,901 |
|
|
30,901 |
| |
Contributed surplus |
13,265 |
|
|
11,411 |
| |
Equity component of convertible debentures |
17,601 |
|
|
3,091 |
| |
Accumulated other comprehensive income (loss) |
(2,878 |
) |
|
7,838 |
| |
Retained earnings |
202,503 |
|
|
250,306 |
| Equity attributable to Osisko Gold Royalties Ltd shareholders |
1,894,405 |
|
|
1,212,437 |
| |
Non-controlling interests |
- |
|
|
1,867 |
| Total equity |
1,894,405 |
|
|
1,214,304 |
| |
2,516,343 |
|
|
1,416,304 |
| |
|
| Osisko Gold Royalties Ltd |
|
| Consolidated Statements of Income (Loss) |
|
| For the three months and the years ended December 31, 2017 and 2016 |
|
| (tabular amounts expressed in thousands of Canadian dollars, except per share amounts) |
|
| |
Three months ended
December 31,
(unaudited) |
|
|
Years ended
December 31, |
|
| |
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
109,552 |
|
|
13,709 |
|
|
213,216 |
|
|
62,677 |
|
| Cost of sales |
(81,058 |
) |
|
(22 |
) |
|
(125,645 |
) |
|
(143 |
) |
| Depletion of royalty, stream and other interests |
(12,747 |
) |
|
(2,828 |
) |
|
(28,065 |
) |
|
(11,291 |
) |
| Gross profit |
15,747 |
|
|
10,859 |
|
|
59,506 |
|
|
51,243 |
|
| Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
| |
General and administrative |
(7,342 |
) |
|
(4,105 |
) |
|
(26,176 |
) |
|
(16,715 |
) |
| |
Business development |
(4,009 |
) |
|
(1,863 |
) |
|
(18,706 |
) |
|
(8,282 |
) |
| |
Impairment of royalty, stream and other interests |
(89,000 |
) |
|
- |
|
|
(89,000 |
) |
|
- |
|
| |
Exploration and evaluation, net of tax credits |
(63 |
) |
|
2,176 |
|
|
(204 |
) |
|
1,240 |
|
| |
Other gains (expenses), net |
- |
|
|
(1,124 |
) |
|
20 |
|
|
(1,436 |
) |
| |
Cost recoveries from associates |
1,215 |
|
|
873 |
|
|
4,125 |
|
|
3,039 |
|
| Operating income (loss) |
(83,452 |
) |
|
6,816 |
|
|
(70,435 |
) |
|
29,089 |
|
| |
Interest income |
1,098 |
|
|
1,011 |
|
|
4,255 |
|
|
3,260 |
|
| |
Dividend income |
- |
|
|
215 |
|
|
- |
|
|
4,931 |
|
| |
Finance costs |
(4,825 |
) |
|
(919 |
) |
|
(8,384 |
) |
|
(3,435 |
) |
| |
Foreign exchange gain (loss) |
(635 |
) |
|
5,331 |
|
|
(16,086 |
) |
|
(5,846 |
) |
| |
Share of loss of associates |
(3,482 |
) |
|
(2,893 |
) |
|
(6,114 |
) |
|
(6,623 |
) |
| |
Other gains (losses), net |
(507 |
) |
|
660 |
|
|
30,829 |
|
|
30,202 |
|
| Earnings (loss) before income taxes |
(91,803 |
) |
|
10,221 |
|
|
(65,935 |
) |
|
51,578 |
|
| |
Income tax recovery (expense) |
27,450 |
|
|
(1,568 |
) |
|
23,147 |
|
|
(9,724 |
) |
| Net earnings (loss) |
(64,353 |
) |
|
8,653 |
|
|
(42,788 |
) |
|
41,854 |
|
| Net earnings (loss) attributable to: |
|
|
|
|
|
|
|
|
|
|
|
| |
Osisko Gold Royalties Ltd's shareholders |
(64,348 |
) |
|
8,679 |
|
|
(42,501 |
) |
|
42,113 |
|
| |
Non-controlling interests |
(5 |
) |
|
(26 |
) |
|
(287 |
) |
|
(259 |
) |
| Net earnings (loss) per share attributable to Osisko Gold Royalties Ltd's
shareholders |
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
(0.41 |
) |
|
0.08 |
|
|
(0.33 |
) |
|
0.40 |
|
| |
Diluted |
(0.41 |
) |
|
0.08 |
|
|
(0.33 |
) |
|
0.40 |
|
| |
|
| Osisko Gold Royalties Ltd |
|
| Consolidated Statements of Cash Flows |
|
| For the three months and the years ended December 31, 2017 and 2016 |
|
| (tabular amounts expressed in thousands of Canadian dollars) |
|
| |
Three months ended
December 31,
(unaudited) |
|
|
Years ended
December 31, |
|
| |
| |
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating activities |
|
|
|
|
|
|
|
|
|
|
|
| Net earnings (loss) |
(64,353 |
) |
|
8,653 |
|
|
(42,788 |
) |
|
41,854 |
|
| Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
| |
Share-based compensation |
1,267 |
|
|
1,659 |
|
|
10,524 |
|
|
7,380 |
|
| |
Depletion and amortization |
12,787 |
|
|
2,862 |
|
|
28,210 |
|
|
11,509 |
|
| |
Impairment of royalty, stream and other interests |
89,000 |
|
|
- |
|
|
89,000 |
|
|
- |
|
| |
Share of loss of associates |
3,482 |
|
|
2,893 |
|
|
6,114 |
|
|
6,623 |
|
| |
Net loss (gain) on acquisition of investments |
(36 |
) |
|
536 |
|
|
2,099 |
|
|
(8,379 |
) |
| |
Net gain on dilution of investments in associates |
(241 |
) |
|
(5,114 |
) |
|
(30,560 |
) |
|
(12,023 |
) |
| |
Net gain on disposal of investments |
- |
|
|
- |
|
|
(703 |
) |
|
(3,410 |
) |
| |
Change in fair value of financial assets at fair value through profit and loss |
784 |
|
|
3,919 |
|
|
(1,665 |
) |
|
(6,390 |
) |
| |
Deferred income tax expense (recovery) |
(28,453 |
) |
|
216 |
|
|
(24,150 |
) |
|
8,372 |
|
| |
Settlement of restricted share units |
- |
|
|
- |
|
|
(5,539 |
) |
|
- |
|
| |
Foreign exchange loss (gain) |
763 |
|
|
(5,319 |
) |
|
16,211 |
|
|
5,851 |
|
| |
Other |
1,225 |
|
|
1,455 |
|
|
2,403 |
|
|
2,832 |
|
| Net cash flows provided by operating activities before changes in non-cash working capital
items |
16,225 |
|
|
11,760 |
|
|
49,156 |
|
|
54,219 |
|
| Changes in non-cash working capital items |
5,298 |
|
|
1,022 |
|
|
(440 |
) |
|
(775 |
) |
| Net cash flows provided by operating activities |
21,523 |
|
|
12,782 |
|
|
48,716 |
|
|
53,444 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Investing activities |
|
|
|
|
|
|
|
|
|
|
|
| Net increase (decrease) in short-term investments |
1,447 |
|
|
(1,000 |
) |
|
2,047 |
|
|
(1,800 |
) |
| Business combination, net of cash acquired |
990 |
|
|
- |
|
|
(621,430 |
) |
|
- |
|
| Settlement of derivative financial instruments |
- |
|
|
- |
|
|
(21,072 |
) |
|
- |
|
| Acquisition of investments |
(76,678 |
) |
|
(18,922 |
) |
|
(226,766 |
) |
|
(82,384 |
) |
| Proceeds on disposal of investments |
21,613 |
|
|
116,979 |
|
|
71,090 |
|
|
129,183 |
|
| Acquisition of royalty and stream interests |
(23,455 |
) |
|
(5,000 |
) |
|
(80,119 |
) |
|
(55,250 |
) |
| Proceeds on sale of royalty interests |
- |
|
|
- |
|
|
- |
|
|
3,630 |
|
| Property and equipment |
(48 |
) |
|
(12 |
) |
|
(137 |
) |
|
(105 |
) |
| Exploration and evaluation, net of tax credits |
(247 |
) |
|
(710 |
) |
|
(1,128 |
) |
|
(8,327 |
) |
| Net cash flows provided by (used in) investing activities |
(76,378 |
) |
|
91,335 |
|
|
(877,515 |
) |
|
(15,053 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Financing activities |
|
|
|
|
|
|
|
|
|
|
|
| Issuance of long-term debt |
300,000 |
|
|
- |
|
|
447,323 |
|
|
50,000 |
|
| Issuance of common shares and warrants |
77 |
|
|
326 |
|
|
264,278 |
|
|
177,934 |
|
| Issue expenses |
- |
|
|
- |
|
|
(190 |
) |
|
(8,066 |
) |
| Financing fees |
(12,619 |
) |
|
(6 |
) |
|
(12,619 |
) |
|
(850 |
) |
| Investment from non-controlling interests |
- |
|
|
862 |
|
|
1,292 |
|
|
4,499 |
|
| Normal course issuer bid purchase of common shares |
- |
|
|
- |
|
|
(1,822 |
) |
|
- |
|
| Dividends paid |
(7,566 |
) |
|
(4,086 |
) |
|
(19,325 |
) |
|
(15,317 |
) |
| Net cash flows provided by (used in) financing activities |
279,892 |
|
|
(2,904 |
) |
|
678,937 |
|
|
208,200 |
|
| Increase (decrease) in cash and cash equivalents before effects of exchange rate changes on
cash and cash equivalents |
225,037 |
|
|
101,213 |
|
|
(149,862 |
) |
|
246,591 |
|
| Effects of exchange rate changes on cash and cash equivalents |
(234 |
) |
|
5,319 |
|
|
(15,682 |
) |
|
(5,851 |
) |
| Increase (decrease) in cash and cash equivalents |
224,803 |
|
|
106,532 |
|
|
(165,544 |
) |
|
240,740 |
|
| Cash and cash equivalents - beginning of period |
108,902 |
|
|
392,717 |
|
|
499,249 |
|
|
258,509 |
|
| Cash and cash equivalents - end of period |
333,705 |
|
|
499,249 |
|
|
333,705 |
|
|
499,249 |
|