Osisko Gold Royalties (NYSE: OR) reported Q2 EPS of $0.10. Revenue for the quarter came in at $137.82 million.

Highlights

• Earned 20,506 gold equivalent ounces1 (“GEOs”), in-line with the 2018 annual guidance of 77,500 to 82,500 GEOs, given the results to date and various assets in ramp-up, we expect a strong production during the second half of 2018 and steady production increases through 2019 and 2020;
• Generated cash flows from operating activities of $19.7 million, which represents a 40% increase compared to the second quarter of 2017;
• Recorded adjusted earnings2 of $3.7 million, $0.02 per basic share2, compared to $7.1 million, $0.07 per basic share in the second quarter of 2017;
• Recorded cash operating margins3 of 87% from royalty and stream interests, maintaining the highest margin in the metals and mining sector, generating $28.7 million in addition to a cash operating margin of $0.9 million from offtake interests;
• Announced an investment of up to $180 million in Falco Resources Ltd’s (“Falco”) Horne 5 Gold project located in Rouyn-Noranda, Canada, for a silver stream facility on the project. Funding of the silver stream by Osisko is subject to Falco achieving several milestones. A feasibility study for Horne 5 was completed in October 2017 and Falco is currently seeking approvals and has initiated the permitting process. Osisko expects to receive an average of 25,000 GEOs annually from the project once in production, expected by 2023. The transaction is expected to close in September 2018 once approval is obtained from Falco’s shareholders4;
• Maintained ownership and financing rights in respect to the Curraghinalt Gold project located in Northern Ireland through the take-private acquisition of Dalradian Resources by Orion Mine Finance;
• Repaid $51.8 million on the revolving credit facility during the second quarter;
• Held $188.6 million in cash and cash equivalents and $336.0 million in equity investments5 as at June 30, 2018;
• Distributed $7.8 million in dividends to shareholders, bringing the total to $70.7 million since inception in 2014;
• Repurchased 1,742,299 shares during the first and second quarters of 2018 at a total cost of $22.0 million, or at an average price of $12.62 per share.

“Osisko has had a very good start to the year having announced two major Canadian investments, being a royalty and equity financing with Victoria Gold and a silver stream with Falco, both of which further strengthen our Canadian-focused and low-risk portfolio. Our dedicated approach to investing in both near-term and long-term opportunities keeps us focused on creating value for Osisko and its shareholders.

With nearly $0.9 billion of available financial capacity, Osisko is in an excellent position to continue to invest in opportunities that present themselves in the current market environment and is actively reviewing new opportunities.

In addition, we are actively working with other capital providers within the global metals and mining sector to develop strategic relationships and alliances that further increase our capacity, to offer custom financial products and to offer complete financing solutions to our mining partners”, said Sean Roosen, Chair and Chief Executive Officer.

For earnings history and earnings-related data on Osisko Gold Royalties (OR) click here.