2015 q4 and year-end results - osisko · 2015 q4 and year-end results march 14, 2016. ... “agnico...
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2015 Q4 and Year-End Results
MARCH 14, 2016
Certain statements contained in this press release may be deemed "forw ard-looking statements". All statements in this release, other than statements of historical fact, thataddress future events, developments or performance that Osisko (the “Corporation”) expects to occur including managements’ expectations regarding the Corporation’s grow th,results of operations, estimated future revenues, requirements for additional capital, future demand for and prices of commodit ies, business prospects and opportunities areforward looking statements. Forw ard looking statements are statements that are not historical facts and are generally, but not alw ays, identif ied by the w ords "expects", "plans","anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions or variations (Including negative variations), or that events orconditions "w ill", "w ould", "may", "could" or "should" occur including, w ithout limitation, the performance of the assets of the Corporation, the realization of the anticipatedbenefits deriving from the Virginia acquisition and its portfolio of investments, production forecasts for properties in w hich the Corporation holds a royalty. Although theCorporation believes the expectations expressed in such forw ard-looking statements are based on reasonable assumptions, such statements involve know n and unknow nrisks, uncertainties and other factors and are not guarantees of future performance and actual results may accordingly differ materially from those in forw ard looking statements.Factors that could cause the actual results to differ materially from those in forward-looking statements include, w ithout limitation: f luctuations in the prices of the commodit iesthat drive royalties held by the Corporation; f luctuations in the value of the Canadian dollar relative to the U.S. dollar; risks related to the operators of the properties in w hich theCorporation holds a royalty; development, permitting, infrastructure, operating or technical diff iculties on any of the properties in w hich the Corporation holds a royalty or otherinterest; rate and timing of production differences from resource estimates or production forecasts by operators of properties in w hich the Corporation holds a royalty or otherinterest; risks and hazards associated w ith the business of exploring, development and mining on any of the properties in w hich the Corporation holds a royalty or other interest,including, but not limited to unusual or unexpected geological and metallurgical conditions, slope failures or cave-ins, f looding and other natural disasters or civil unrest;regulatory changes by national and local government, including corporate law , permitting and licensing regimes and taxation policies; regulations and polit ical or economicdevelopments in any of the countries where properties in w hich the Corporation holds a royalty or other interest are located or through w hich they are held); continuedavailability of capital and financing and general economic, market or business conditions; business opportunities that become available to, or are pursued by the Corporation;the impossibility to acquire royalties and to fund precious metal streams; other uninsured risks. The forward looking statements contained in this presentation are based uponassumptions management believes to be reasonable, including, w ithout limitation: the ongoing operation of the properties in w hich the Corporation holds a royalty or otherinterest by the ow ners or operators of such properties in a manner consistent w ith past practice; the accuracy of public statements and disclosures made by the ow ners oroperators of such underlying properties; no material adverse change in the market price of the commodities that underlie the asset portfolio; no adverse development in respectof any signif icant property in which the Corporation holds a royalty, stream or other interest; the accuracy of publicly disclosed expectations for the development of underlyingproperties 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 addit ional information on risks, uncertainties and assumptions, please refer to the Corporation’s most recent Annual Information Form filed on SEDAR at www.sedar.com.The Corporation cautions that the foregoing list of risk and uncertainties is not exhaustive. Investors and others who base themselves on the forward looking statementscontained herein should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The Corporation believes that the expectationsreflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations w ill prove to be correct and such forward-lookingstatements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. The Corporation undertakes noobligation to publicly update or revise any forward-looking statements, w hether as a result of new information, future events or otherwise, other than as required by applicablelaw .
Safe Harbour Statement:This Pow erPoint presentation has been prepared for informational purposes only in order to assist prospective investors in evaluating an investment in Osisko Gold Royalt iesLtd. By accepting delivery of this confidential information or any other material in connection w ith an investment in the Corporation, the investor agrees: (1) to keep strictlyconfidential the contents of this confidential information presentation and such other material and not to disclose such contents to any third party or otherw ise use the contentsfor any purpose other than evaluation by such offered of an investment in the securities; (2) not to copy all or any portion of this confidential Pow erPoint presentation, otherconfidential information or any such other material.Inquiries regarding this confidential Pow erPoint presentation can be made to the senior management of the Corporation.
Forward Looking Statements
2
Accomplishments in 20 Months
RAISED TOTAL OF ~ $500M IN CAPITAL SECURED $200M IN AVAILABLE CREDIT DEPLOYED ~$220M OF CAPITAL INTO INVESTMENTS AND
OVER $775M IN TRANSACTIONS ADDED 48 ROYALTIES TO PORTFOLIO + 3 ROYALTY OPTIONS TOTAL OF $13.8M IN DIVIDENDS DECLARED CREATED NEW ROYALTY BUSINESS MODEL
3
First 20 Months Key Accomplishments - Positioned for Future Growth
POSITIONED FOR GROWTH WITH ONE OF THE BEST BALANCE SHEETS IN THE SECTOR
DIVERSIFIED REVENUES
ADDITION OF ÉLÉONORE ROYALTY ADDITION OF ISLAND GOLD ROYALTY LIF ROYALTY – RECEIVED $5.8M IN DIVIDENDS
EQUIVALENT TO ~5,000 oz Au*
INCREASED ROYALTY PORTFOLIO FROM5 TO 53 ROYALTIES
POSITIONED BALANCE SHEET TO COMPETE
RAISED TOTAL OF $500M IN CAPITAL INCREASED AVAILABLE CREDIT TO $150M-$200M
*Estimate using US$1,200/oz Au and an exchange rate of CAN$1.35 = US$1.00 4
2015 Performance
PRODUCTION (oz Au Eq.)
OVER 30 K OZ OF ZERO-COST GOLD IN CANADA WITH ADDITIONALGROWTH FROM MAJOR CANADIAN ROYALTIES IN 2016
12,327oz Au
30,125oz Au
12,502 ozAu Eq.*
30,533 ozAu Eq.*
2014A 2015A
29,500---
29,900oz Au
34,500---
37,200oz Au
2015 2016
GUIDANCE (oz Au)
* Total withsilver in gold equivalent
5
$17.2
$57.6
$0
$10
$20
$30
$40
$50
$60
$70
2014A 2015A
REVENUE (C$ M)
Dividends mainly from LIF
Advance royalty payment
$5.9
$45.4
$6.3
2015 Performance
$5.9 2
$32.2
2014 2015
NET CASH FLOW FROM OPERATING ACTIVITIES (C$ M)1
1. Before change in non-cash working capital items2. From continuing operations 6
3 MONTHS ENDED 12 MONTHS ENDED
(C$ 000) Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
GOLD PRODUCTION (oz) 7,989 5,010 30,125 12,327
SILVER PRODUCTION (oz) 8,574 4,902 31,318 11,915
REALIZED GOLD PRICE (US$) 1,098 1,197 1,152 1,229
REVENUES $12,811 $7,608 $45,415 $17,179
DIVIDEND INCOME 1,560 -- 5,855 --
NET EARNINGS (LOSS)1 4,548 (2,182) 28,528 (2,095)
NET EARNINGS (LOSS) PER SHARE1 - BASIC 0.05 (0.04) 0.33 (0.05)
ADJUSTED NET EARNINGS 10,507 3,135 40 416 10,072
ADJUSTED NET EARNINGS PER SHARE - BASIC 0.11 0.06 0.46 0.22
2015 Financial Results
1. From continuing operations 7
2015 Activity
ACQUISITIONS
COMPLETED THE $556M ACQUISITION OF VIRGINIA MINES
INVESTMENTS – OVER $200M IN INVESTMENTS & ROYALTY ACQUISITIONS
1. 9.8% EQUITY INTEREST IN LABRADOR IRON ORE ROYALTY CORPORATION (LIF)2. ACQUISITION OF ISLAND GOLD AND LAMAQUE NSRs FROM TECK ALONG WITH 29 OTHER
ROYALTIES1
3. 1.5% NSR CARIBOO GOLD PROJECT4. 5% NSR – 40% NPI ON VEZZA (NOTTAWAY RESOURCES)5. ADDITIONS TO ROYALTY INCUBATION INVESTMENT PORTFOLIO:
OBAN MINING CORPORATION FALCO RESSOURCES BARKERVILLE GOLD MINES UNIGOLD
6. 3% NSR ON ODYSSEY NORTH
1. Subject to closing of remaining royalties acquired from Teck.
NIOGOLD MINING CORP. TERRAX MINERALS HIGHLAND COPPER COMPANY
8
2015 Activity
FINANCING
$173M BOUGHT DEAL FINANCING
(2016)
$200M BOUGHT DEAL PRIVATE PLACEMENT
SECURED $150M + $50M CREDIT
FACILITY
$50M CONVERTIBLE DEBENTURE WITH INVESTISSEMENT QUÉBEC (2016)
9
(C$ millions) DEC. 31, 2015
CASH & CASH EQUIVALENTS $258.5
WORKING CAPITAL & MARKETABLE SECURITIES1 $380.5
DEBT --
TOTAL ASSETS $1,081.4
EQUITY2 $935.8
Year-End Financial Position
OSISKO IS NOW IN A UNIQUE POSITION TO DELIVER ON ITS STRATEGY OF GROWING ITS GOLD ROYALTY PORTFOLIO
~$650MIN CASH & AVAILABLE
CREDIT
STRONG CASH
POSITION
*Estimated as at March 14, 2016
1. At fair value2. Attributable to Osisko sharehoders
$157
~ $450
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
Inception Current
CASH & CASH EQUIVALENTS ($M)*
10
Returning Capital to Shareholders
$0.00
$0.01
$0.02
$0.03
$0.04
$0.05
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
SIXTH QUATERLY DIVIDEND DECLARED
DIVIDEND YIELD ~1.1%
11
KEY PRODUCING ASSETS
LABRADOR IRON ORE ROYALTY CORPORATION9.8% EQUITY POSITION
ÉLÉONORE2.0-3.5% NSR
ISLAND GOLD1.7%-2.55% NSR
VEZZA5% NSR – 40% NPI
CANADIAN MALARTIC5% NSR
12
OPERATORS: Agnico Eagle / Yamana Gold
LOCATION: Malartic, Québec
RESERVES: Current reserves of 7.73 M oz Au1
ROYALTY:
5% NSR royalty $0.40/tonne on milled ore from
outside the current property area for life of mill starting in June 2021
2015 PRODUCTION2:
572.0 k oz
GUIDANCE2: 2016: 560 to 580 k oz 2017: 590 to 600 k oz 2018: 610 k oz
OSISKO ATTRIBUTABLE GOLD OUNCES2:
2016: 28.0 to 29.0 k oz 2017: 29.5 to 30.0 k oz 2018: 30.5 k oz
1. See Appendix A for full disclosure on Reserves & Resources.2. Based on Agnico Eagle’s press release dated February 10th, 2016, titled: “Agnico Eagle Reports Fourth Quarter and Full Year 2015 Results” and Yamana Gold’s press release dated February 18, 2016, and
titled “Yamana Gold Announces Fourth Quarter and Full Year 2015 Results”
Canadian MalarticProduction(k oz Au)2
572.0
2015A
Osisko Gold Royalties Attributable Royalty
Ounces (k oz Au)
29.7
2015A
Key Producing Assets | CANADIAN MALARTIC – 5% NSR
THE LARGEST GOLD MINE IN
CANADA
13
1. See Appendix A for full disclosure on Reserves & Resources.2. See Goldcorp press release dated February 25, 2016, titled “Goldcorp Reports Fourth Quarter 2015 Results; Provides Updated Reserves and Resources Estimates and 2016 Guidance”
ÉléonoreProduction(k oz Au)2
268.1
2015A
Osisko Gold Royalties Attributable Royalty
Ounces (k oz Au)
4.7
2015A
0.4
OPERATOR: Goldcorp (100%)
LOCATION: James Bay, Québec
RESERVES: Current reserves of 5.35 M oz Au1
ROYALTY:
2.0% NSR royalty on the first 3 M ozof Au production
0.25% increase for every additional 1M oz of production thereafter, to a maximum of 3.50%
Adjustment of +10% if Au is higher than US$500/oz
2015 PRODUCTION2:
268.1 k oz
2016 GUIDANCE2: 250-280 k oz
2016 OSISKO ATTRIBUTABLE GOLD OUNCES2:
5.5 to 6.2 k oz
Key Producing Assets | ÉLÉONORE – 2.0 to 3.5% NSR
FIRST OUNCES RECEIVED IN
DECEMBER 2015
Including Ounces Credited Towards Advance Royalty
Payment
14
Operating since 2007 Recently announced an updated
PEA1 on Deep resources at the Island Gold Mine
2015 production: 55,040 oz Au 206% increase in reserves:
– 561,700 OZ @ 8.26 g/t2
$7.3M exploration budget in 2016
1. See Richmont Mines press release dated October 28, 2015 titled: “Richmont Announces Results of a Preliminary Economic Assessment for a Portion of the Deeper Resources of the Island Gold Mine”.2. See Appendix A for full disclosure on Reserves & Resources3. See LIF’s press release dated March 3, 2016 titled: “Labrador Iron Ore Royalty Corporation – 2015 Results of Operations”
Investment in LIF provides exposure to Iron Ore Canada (“IOC”)
– 7.0% top-line royalty
– 15% equity interest in IOC
– $0.10/t commission on all iron ore sales by IOC
Operating since 1954
Reserves to continue operations for 28 years at current production rate3
Osisko received dividends from LIF of $5.8M in 2015
LABRADOR IRON OREROYALTY CORPORATION (LIF)9.8% EQUITY POSITION
ISLAND GOLD 1.7%-2.55%
NSR
Producing Royalties
Operated by Ressources Nottaway inc. (private company)
The property is located 25km from Matagami, Québec
Commercial production forecasted for 2016.
VEZZA5% NSR40% NPI
15
Royalty Incubation Process – Barkerville Gold Mines
$15.2M IN FLOW-THROUGH SHARES(current market value: ~$26M)
$25M FOR A 1.5% NSR ROYALTY
TECHNICAL ADVISORY
AGREEMENT
Sean ROOSEN, Co-Chairman Chris LODDER, President & DirectorLuc LESSARD, COO
FLOW-THROUGH SHARES TO REDUCE TAX CHARGE16
Summary
53ROYALTIES &NO STREAMS
~$650MIN CASH & AVAILABLE
CREDIT
DIVIDEND YIELD
~1.1%
TWO OF THE PREMIER
ROYALTY ASSETS IN THE GOLD
SECTOR
GOLD FOCUSED
THE LEADING INTERMEDIATEGOLD ROYALTY COMPANY
TRACK RECORD OF SUCCESS
30,125ZERO-COST ozIN CANADA IN
2015
34,500 to 37,200 oz
ATTRIBUTABLE GOLD OUNCES FOR
2016
17
APPENDIX
Appendix A – 2015 Statement of IncomeAppendix B – Reserves & Resources
3 MONTHS ENDED 12 MONTHS ENDED
(C$ 000) Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014
REVENUES $12,811 $7,608 $45,415 $17,179
EXPENSES- DEPLETION OF ROYALTY INTERESTS- GENERAL AND ADMINISTRATIVE- BUSINESS DEVELOPMENT- EXPLORATION AND EVALUATION- WRITE-OFF OF PROPERTY, PLANT AND EQUIPMENT- GAIN ON DISPOSAL OF EXPLORATION AND EVALUATION ASSETS- COST RECOVERIES FROM ASSOCIATES
(588)(4,240)(3,491)
(964)(192)
--688
--(3,095)(2,711)
(750)(1,444)
----
(588)(15,046)(10,982)
(2,409)(192)
5001,526
--(5,285)(3,344)(6,010)(4,275)
----
OPERATING INCOME (LOSS) 4,024 (392) 18,224 (1,735)
OTHER INCOME (EXPENSES) - NET 2,481 (344) 18,498 2,931
EARNINGS (LOSS) BEFORE INCOME TAXES 6,505 (736) 36,722 1,196
INCOME TAX EXPENSE (1,957) (1,446) (8,194) (3,291)
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS 4,548 (2,182) 28,528 (2,095)
NET EARNINGS FROM DISCONTINUED OPERATIONS -- -- -- 1,675,263
NET EARNINGS (LOSS) FOR THE PERIOD 4,548 (2,182) 28,528 1,673,168
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS PER SHARE - BASIC 0.05 (0.04) 0.33 (0.05)
Appendix A – 2015 Statement of Income
19
Appendix B – Reserves and Resources
1. Agnico Eagle and Yamana public disclosure – as at December 31, 20152. See Goldcorp press release dated February 25, 2016, titled Goldcorp Reports Fourth Quarter 2015 Results; Provides Updated Reserves and Resources Estimates and 2016 Guidance
3. See Richmont press release dated February 9, 2016, titled Richmont Increases Mineral Reserves by 187% and Island Gold Mine Increases Mineral Reserves by 206%, With a 29% Increase in Reserve Grade
CANADIAN MALARTIC1
RESERVES*
CATEGORY AU GRADE (G/T) AU (M OZ) TONNES (MT)
Proven 0.97 1.72 54.9
Probable 1.12 6.00 166.6
Total Proven & Probable 1.08 7.72 221.5
*Cut-off grade: 0.345-0.351 g/t | Gold Price: $1,150/oz Au
GLOBAL RESOURCES (EXCLUDING RESERVES)*
CATEGORY AU GRADE (G/T) AU (M OZ) TONNES (MT)
Measured 1.32 0.15 3.5
Indicated 1.55 1.10 22.2
Total Meas. & Ind. 1.51 1.25 25.7
Inferred 1.47 0.43 9.0*Cut-off grade: 0.34-0.40 g/t and 1.0 g/t below open pit | Gold Price: $1,150/oz Au | exchange rate of CAN$1.24 = US$1.00
ÉLÉONORE2
RESERVES*
CATEGORY AU GRADE (G/T) AU (M OZ) TONNES (MT)
Total Proven & Probable 5.87 5.35 28.32
GLOBAL RESOURCES (EXCLUDING RESERVES)
CATEGORY AU GRADE (G/T) AU (M OZ) TONNES (MT)
Total Meas. & Ind. 5.49 0.81 4.58
Inferred 7.11 2.28 9.97
ISLAND GOLD3
RESERVES - ABOVE 400M*
CATEGORY AU GRADE (G/T) AU (K OZ) TONNES (KT)
Proven 7,00 21,80 97.0
Probable 6.88 54.90 248.0
Total Proven & Probable 6.91 76.70 345.0
GLOBAL RESOURCES (EXCLUDING RESERVES) – ABOVE 400M*
CATEGORY AU GRADE (G/T) AU (K OZ) TONNES (KT)
Measured 5.80 1.35 7.5
Indicated 6.96 52.7 235.5
Total Meas. & Ind. 6.92 54.1 243.0
Inferred 7.44 98.7 412.5
*Based on a gold price of US$1,300/oz and an exchange rate of CAN$1.2037 = US$1.00.
RESERVES – BELOW 400M*
CATEGORY AU GRADE (G/T) AU (K OZ) TONNES (KT)
Proven 7.72 66.1 266.5
Probable 8.66 418.9 1,504.0
Total Proven & Probable 8.52 485.0 1,770,5
GLOBAL RESOURCES (EXCLUDING RESERVES) – BELOW 400M*
CATEGORY AU GRADE (G/T) AU (K OZ) TONNES (KT)
Indicated 5.20 17.65 105.5
Inferred 8.67 669.35 2,402.5
*Based on a gold price of US$1,300/oz and an exchange rate of CAN$1.2037 = US$1.00.
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