Osisko Gold Royalties Metals Investor Forum

Transcription

1 Osisko Gold Royalties Metals Investor Forum JANUARY 2017

2 Forward Looking Statements Certain statements contained in this presentation may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address future events, developments or performance that Osisko (the Corporation ) expect to occur including managements expectations regarding the Corporation s growth, results of operations, estimated future revenues, statements or estimates of mineral resources and reserves, requirements for additional capital, future demand for and prices of commodities, business prospects and opportunities are forward looking statements. 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, that all conditions precedent a transaction will be met and the realization of the anticipated benefits deriving therefrom for shareholders of the Corporation, the view on the quality and the potential of the Corporation s assets, production forecasts for properties in which the corporation holds a royalty. Although the Corporation 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 held by the Corporation; fluctuations in the value of the Canadian dollar relative to the U.S. dollar; risks related to the operators of the properties in which the Corporation holds a royalty; development, permitting, infrastructure, operating or technical difficulties on any of the properties in which the Corporation hold a royalty or other interest; rate and timing of production differences from resource estimates or production forecasts by operators of properties in which the Corporation hold a royalty or other interest; risks and hazards associated with the business of exploring, development and mining on any of the properties in which the Corporation hold a royalty or other interest, including, but not limited to unusual or unexpected geological and metallurgical conditions, slope failures or cave-ins, flooding 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 political or economic developments in any of the countries where properties in which the Corporation hold a royalty or other interest are located or through which they are held); continued availability 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 upon assumptions management believes to be reasonable, including, without limitation: the ongoing operation of the properties in which the Corporation holds a royalty or other 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; no adverse development in respect of any significant property in which the Corporation holds a royalty, stream or other 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 on risks, uncertainties and assumptions, please refer to the Corporation s most recent Annual Information Form filed on SEDAR at The Corporation cautions that the foregoing list of risk and uncertainties is not exhaustive. Investors and others who base themselves on the forward looking statements contained herein should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this presentation should not be unduly relied upon. These statements speak only as of the date of this presentation. The Corporation undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law. Safe Harbour Statement This PowerPoint presentation has been prepared for informational purposes only in order to assist prospective investors in evaluating an investment in Osisko Gold Royalties Ltd. By accepting delivery of this confidential information or any other material in connection with an investment in the Corporation, the investor agrees: (1) to keep strictly confidential the contents of this confidential information presentation and such other material and not to disclose such contents to any third party or otherwise use the contents for 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 PowerPoint presentation, other confidential information or any such other material. Inquiries regarding this confidential PowerPoint presentation can be made to the senior management of the Corporation. Cautionary the Use of Note to U.S. Investors Regarding Mineral Reserve and Mineral Resource Estimates Osisko is subject to the reporting requirements of the applicable Canadian securities laws, and as a result, reports its mineral resources and reserves according to Canadian standards. Canadian reporting requirements for disclosure of mineral properties are governed by NI The definitions of NI are adopted from those given by the Canadian Institute of Mining, Metallurgy and Petroleum ( CIM ). U.S. reporting requirements are governed by the Industry Guide 7 ( Guide 7 ) of the Security and Exchange Commission ("SEC"). This presentation includes estimates of mineral reserves and mineral resources reported in accordance with NI These reporting standards have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported, but embody different approaches and definitions. For example, under Guide 7, mineralization may not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Consequently, the definitions of Proven Mineral Reserves and Probable Mineral Reserves under CIM standards differ in certain respects from the standards of the SEC. Osisko also reports estimates of mineral resources in accordance with NI While the terms Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource and Inferred Mineral Resource are recognized by NI , they are not defined terms under standards of the SEC and, generally, U.S. companies are not permitted to report estimates of mineral resources of any category in documents filed with the SEC. As such, certain information contained in this presentation concerning descriptions of mineralization and estimates of mineral reserves and mineral resources under Canadian standards is not comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the SEC. Readers are cautioned not to assume that all or any part of Measured Mineral Resources or Indicated Mineral Resource exists, or is economically or legally mineable. Further, an Inferred Mineral Resource has a great amount of uncertainty as to its existence and as to its economic and legal feasibility, and a reader cannot assume that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. 2

3 THE LEADING INTERMEDIATE GOLD ROYALTY COMPANY January 2017 TSX & NYSE:OR TWO OF THE PREMIER ROYALTY ASSETS IN THE GOLD SECTOR OVER 50 ROYALTIES STRONG CASH POSITION TRACK RECORD OF SUCCESS QUARTERLY DIVIDEND GOLD FOCUSED $1.5B MARKET CAP $62.7M 2016 REVENUES ~$500M CASH & CASH EQUIVALENTS (at December 31, 2016) $150-$200M AVAILABLE CREDIT 38,270 oz ATTRIBUTABLE GOLD OUNCES FOR 2016

4 High Quality Portfolio Focused on Gold and Canada PRODUCING & CASH FLOWING ASSETS IN QUÉBEC AND ONTARIO GROWTH ASSETS FOCUSED ON NORTH AMERICA WINDFA LL COULON POLYMETAL LIC PROJECT ISLAND GOLD VEZZA CANADIA N MALARTI C ÉLÉONOR E CARIBOO UPPER BEAVER KIRKLAND LAKE CAMP HERMOS A HORNE 5 ODYSSE Y NORTH LAMAQ UE PANDO RA GUERRERO 9,600 KM 2 AREA IN GUERRERO, MEXICO MARBAN TWO OF THE PREMIER GOLD ROYALTIES IN THE SECTOR PORTFOLIO OF OVER 50 EXPLORATION STAGE ROYALTIES PROVIDE GREAT OPTIONALITY GOLD FOCUSED CANADA FOCUSED 4

5 High Quality Cash Flow Generating Assets 2016 GEO PRODUCTION OF 38.3 K OZ CANADIAN MALARTIC 5% NSR 100% Of Revenues in Canada at Zero- Cost Gold ÉLÉONORE 2-3.5% NSR ISLAND GOLD % NSR VEZZA 5% NSR 40% NPI 37,519 GOLD SILVER CASH 25 % YEAR ON YEAR INCREASE IN RECEIVED OUNCES 5

6 Canadian Malartic Royalty 5% NSR THE LARGEST GOLD MINE IN CANADA OPERATORS: Agnico Eagle (50%) / Yamana Gold (50%) LOCATION: Malartic, Québec RESERVES: Current reserves of 7.72 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 Gold Production: 586 k oz OSISKO ATTRIBUTABLE GOLD OUNCES: 28.0 to 30.0 k oz See Appendix A for full disclosure on Reserves & Resources. Based on Agnico Eagle s press release dated October 26th, 2016, titled: Agnico Eagle Reports Third Quarter 2016 Results:. RESERVES OF 7.72 M oz Au 6

7 Canadian Malartic Exploration Upside Odyssey North & South 113 holes (89,774 metres) completed Showing similarities to the Goldex mine deposit in terms of grade and potential amenability to underground bulk mining Odyssey North has been traced from a depth of 600 to 1,300 metres below surface along a strike length of approximately 1.5 kilometre Odyssey South currently has a strike length of 0.5 kilometre and has been located between approximately 200 and 550 metres below surface Additional drilling totalling $5.5 million (35,000 metres) has been added to the original budget of $8.0 million (60,000 metres) for a total of $13.5 million for 2016 OSISKO HOLDS A 5% NSR ROYALTY ON THE ODYSSEY SOUTH ZONE AND A 3% NSR ROYALTY ON THE ODYSSEY NORTH ZONE INITIAL INFERRED MINERAL RESOURCE ESTIMATE FOR THE ODYSSEY ZONES EXPECTED IN Q Source: Agnico Eagle 7

8 Éléonore Royalty 2.0 to 3.5% NSR FIRST OUNCES RECEIVED IN DECEMBER 2015 OPERATOR: Goldcorp (100%) LOCATION: James Bay, Québec RESERVES: Current reserves of 4.57 M oz Au 1 ROYALTY: 2017 GUIDANCE: 2020 GUIDANCE: 2016 OSISKO ATTRIBUTABLE GOLD OUNCES: OSISKO ATTRIBUTABLE GOLD OUNCES AT FULL PRODUCTION: 2.0% NSR on the first 3 M oz of Au 0.25% increase for every additional 1M oz of production thereafter, to a maximum of 3.50% +10% if Au is higher than US$500/ oz 315 k oz Expecting 600 k oz 5.5 to 6.2 k oz GROWING TO > 12,000 OZ RAMP UP TO 600 K OZ PER YEAR EXPECTED BY See Appendix A for full disclosure on Reserves & Resources. 2. Based on Goldcorp press release dated October 26th, 2016, titled Goldcorp Reports Third Quarter 2016 Results and Reconfirms Production and Cost Guidance M oz Au Potential to 1,500m 8

9 Our Performance NET CASH FLOWS FROM OPERATING ACTIVITIES ($C M) $20.0 $15.0 $10.0 $5.0 $0.0 $1.5 $6.5 $12.6 $8.4 Q Q Q Q Q Q Q $9.8 $15.9 $15.0 $35 $30 $25 $20 $15 $10 $5 $0 NET EARNINGS ($M) $24.0 Nine Months Ended Sept $33.2 Nine Months Ended Sept $70 $60 $50 $40 $30 $20 $10 $0 REVENUES ($M) $62.7 $45.4 Twelve Months Twelve Months Ended Dec. 31, 2015 Ended Dec. 31, 2016 $0.05 $0.04 $0.03 $0.02 $0.01 $0.00 DIVIDEND ($) ~$700M IN CASH & AVAILABLE CREDIT (1) $221.7M IN INVESTMENTS 1. Fair value of marketable securities as at December 31,

10 Accelerator Portfolio OVER 50 ROYALTIES IN THE PORTFOLIO TO PROVIDE UPSIDE TO OR SHAREHOLDERS COULON POLYMETAL LIC PROJECT FARM-IN AGREEMENT JAMES BAY - LABRADOR TROUGH PROPERTIES (OSK) 1.5% - 3.5% NSR WINDFALL 1.5% NSR CARIBOO 1.5% NSR HORNE 5 1% NSR PANDORA 2% NSR HERMOSA 1% NSR UPPER BEAVER KIRKLAND LAKE CAMP 2% NSR LAMAQUE 1.7% NSR GROWTH ROYALTY ASSETS EXPLORATION PROPERTIES GUERRERO 9,600 KM 2 AREA IN GUERRERO, MEXICO ODYSSEY NORTH 3% NSR MARBAN 0.425% NSR 10

11 Accelerator Model Acquiring Royalties at Discounted Valuations NET COST OF ROYALTY PURCHASE AT SEPT 30, 2016 (C$ M) PURCHASED A 1.5% NSR IN FEBRUARY 2016 $25.0 [VALUE] 1 PURCHASED A 1% NSR IN APRIL 2016 $10.0 [VALUE] 1 $6.9 ($7.9) Cost to purchase royalty Unrealized gain on equity investment Net cost of royalty Cost to purchase royalty Unrealized gain on Net cost of royalty equity investment 1. Non-IFRS measure representing the difference between the fair value of marketable securities less acquisition cost 11

12 The Drills Are Turning Upside on Growth Portfolio OVER 800,000 METRES OF DRILLING ON OUR ROYALTIES PLANNED FOR , , , , , , , , , ,000 65,000 50,000 35,000 30,000 20,000 0 Windfall Island Gold Canadian Malartic Lamaque Cariboo Hermosa Horne5 Éléonore Marban IGNIFICANT INVESTMENT BY OPERATORS ON OSISKO S ROYALTY PROPERTIES; RESERVES & RESOURCES UPSIDE AT NO COST TO OSISKO 12

13 Summary Royalty model is a powerful model Simple business model Focused on adding long life cornerstone cash flow asset Royalty investment is a great way add gold exposure to your portfolio 13

14 Appendix A Q3 Results

15 The Team MANAGEMENT TEAM Co-Founder of Osisko Mining Corporation Transformed Osisko Mining into a leading intermediate producer Transformed Osisko Mining into a leading intermediate producer Over 30 years of experience in the mining industry 18 years of experience in finance, treasury and financial reporting Sean Roosen Chair & CEO Bryan A. Coates President Elif Lévesque CFO & VP, Finance 10 years of experience in the mining industry in corporate development and mining investment banking 20 years of experience in legal affairs in the mining industry 10 years of experience in the mining industry related to capital markets and mergers & acquisition Joseph de la Plante VP, Corporate Development André Le Bel VP, Legal Affairs & Corporate Secretary Vincent Metcalfe VP, Investor Relations 15

16 The Technical Team Transformed Osisko Mining into a leading intermediate producer VP Construction of Osisko Mining during the build of Canadian Malartic Co-Founder of Osisko Mining Corporation Transformed Osisko Mining into a leading intermediate producer More than 25 years of experience in mining exploration Luc Lessard SVP, Technical Services Robert Wares Consultant, Geology Paul Archer Chief Geologist Chris Lodder Consultant, Geology, South America François Vézina Director, Mining Christian Laroche Director, Metallurgy IN-HOUSE TECHNICAL TEAM TO EVALUATE & REVIEW OPPORTUNITIES TEAM WITH OVER 200 YEARS OF EXPERIENCE IN GEOLOGY, ENGINERING, AND MINE BUILDING 16

17 ZERO-COST GOLD IN CANADA GOLD EQUIVALENT OUNCES EARNED (oz AuEq) GUIDANCE (oz Au) 21% Increase 8,367 oz AuEq [VALUE] oz AuEq (Ag and cash royalves) [VALUE] oz Au 10,103 oz AuEq [VALUE] oz AuEq (Ag and cash royalves) [VALUE] oz Au 34, ,2 00 oz Au YTD: 28,793 oz Q Q E 21% increase in gold equivalent ounces year over year. On track to achieve guidance. 1. Gold equivalent ounces earned is a non-ifrs measure and includes NSR royalties in gold, silver, other cash royalties. Silver 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. Cash royalties were converted into gold equivalent ounces by dividing the associated revenue by the average gold price for the period. For Q3 2016, the average per ounce commodity prices were as follows: $1,742 gold (Q3 2015: $1,472), $25.60 silver (Q3 2015: $19.52). 17

18 A Great Time to Own Canadian Gold OSISKO QUARTERLY REALIZED GOLD PRICE (C$/ OZ) $1,800 $1,700 Peak London PM Fixing in CAD: $1,877/oz on Sep. 6, 2011 $1,636 $1,631 $1,743 $1,600 $1,500 $1,498 $1,467 $1,485 $1,491 $1,400 $1,379 $1,369 $1,300 $1,200 Q Q Q Q Q Q Q Q Q STRONG UPWARD MOMENTUM IN CANADIAN GOLD PRICE INCREASED INDUSTRY ACTIVITY IN QUÉBEC/CANADIAN EXPLORATION 18

19 2016 Q3 Results 3 MONTHS ENDED (C$ 000) Sept 30, 2016 Sept 30, 2015 GOLD PRODUCTION (oz) 9,902 8,264 SILVER PRODUCTION (oz) 9,234 7,780 REALIZED GOLD PRICE (C$ per oz) 1,743 1,485 REVENUES $17,570 $11,724 DIVIDEND INCOME $1,572 $1,560 NET CASH FLOW FROM OPERATIONS $14,978 $12,594 NET EARNINGS $17,675 $9,809 NET EARNINGS PER SHARE - BASIC $0.17 $0.10 INVESTMENTS IN FLOW-THROUGH SHARES (ACCELERATOR MODEL) IN 2016 HAVE CONTRIBUTED TO OFFSETTING TAXES ON ROYALTY INCOME 19

20 Appendix B Reserves & Resources

21 Appendix B Reserves and Resources CANADIAN MALARTIC 1 RESERVES* CATEGORY AU GRADE (G/T) AU (M OZ) TONNES (MT) Proven Probable Total Proven & Probable *Cut-off grade: g/t Gold Price: $1,150/oz Au GLOBAL RESOURCES (EXCLUDING RESERVES)* CATEGORY AU GRADE (G/T) AU (M OZ) TONNES (MT) Measured Indicated Total Meas. & Ind Inferred *Cut-off grade: 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 ÉLÉONORE 2 RESERVES* CATEGORY AU GRADE (G/T) AU (M OZ) TONNES (MT) Total Proven & Probable ISLAND GOLD 3 RESERVES - ABOVE 400M* CATEGORY AU GRADE (G/T) AU (K OZ) TONNES (KT) Proven Probable Total Proven & Probable GLOBAL RESOURCES (EXCLUDING RESERVES) ABOVE 400M* CATEGORY AU GRADE (G/T) AU (K OZ) TONNES (KT) Measured Indicated Total Meas. & Ind Inferred *Based on a gold price of US$1,300/oz and an exchange rate of CAN$ = US$1.00. RESERVES BELOW 400M* CATEGORY AU GRADE (G/T) AU (K OZ) TONNES (KT) Proven Probable ,504.0 Total Proven & Probable ,770.5 GLOBAL RESOURCES (EXCLUDING RESERVES) CATEGORY AU GRADE (G/T) AU (M OZ) TONNES (MT) Total Meas. & Ind Inferred GLOBAL RESOURCES (EXCLUDING RESERVES) BELOW 400M* CATEGORY AU GRADE (G/T) AU (K OZ) TONNES (KT) Indicated Inferred ,402.5 *Based on a gold price of US$1,300/oz and an exchange rate of CAN$ = US$ Agnico Eagle and Yamana public disclosure as at December 31, See Goldcorp press release dated October 26, 2016, titled Goldcorp Reports Third Quarter 2016 Results and Reconfirms Production and Cost 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 21