How does Osisko Gold Royalties’ hybrid model enable the company to sustainably expand its royalty portfolio?

Osisko Gold Royalties' hybrid model has been a unique feature of the company since its founding in 2014. There was a lot of technical talent already in the building following the construction and operation of the Canadian Malartic mine, and the company’s leadership decided that rather than losing this talent to the sector, it would be smarter to retain it. Thus, we lean on our significant expertise to create royalties at times rather than paying the full price of competing against our royalty peers. We find appropriate assets, typically earlier-stage, then deploy our team and capital into the opportunity, unlocking value for us and its shareholders. This model has enabled us to build a portfolio from a standing start, and we enjoy looking back with the hindsight that we gained royalty assets cheaply and without competition. Having the ability to create some of our own assets is a strong differentiating factor for Osisko Gold Royalties. Especially in times like these when royalties are more expensive as there is significant capital chasing the same ideas.

Can you provide an overview of your company’s asset portfolio?

Canadian Malartic is our largest producing royalty, and it only continues to get stronger. Agnico Eagle and Yamana Gold announced a US$1.3 billion investment to transition the mine from open pit to underground, which costs us nothing. Accounting for 35,000 oz of our 80,000 oz total in 2021, this is the flagship asset within the entire gold royalty sector. Osisko Gold Royalties also holds several other meaningful assets, including a silver stream on Mantos Blancos, a Chilean copper mine, and a 5% NSR on Victoria Gold’s Eagle mine, one of the newer mines in Canada. Osisko Gold Royalties invested heavily in royalty growth during the last down market and has significant organic growth from assets such as Windfall, Cariboo, Hermosa, Upper Beaver and others.

What are the key criteria you consider when selecting assets?

We always start with the geological and technical merits of an asset. Our asset base is centered in some of the safest mining jurisdictions in the world, something we are not looking to change. Thereafter, we make sure that the assets can be economic in most commodity price environments.

What makes royalties especially attractive to investors in today’s financial climate?

The royalty model is a go-to for investors looking for gold exposure. The mix of lower risk (through greater diversification and lesser opex and capex exposure) and significant upside (through exposure to additional ounces that are discovered on our grounds) has tended to outperform in the mining sector over long periods. That advantage has grown as miners are undergoing significant inflation as well as dealing with rising geopolitical risks.

How important is the theme of ESG to Osisko Gold Royalties?

Our portfolio was built in safe jurisdictions where environment and social issues are paramount. We have also aligned ourselves with operating partners who share our ESG values. As an example of our proactiveness on ESG matters, we were early investors in Carbon Streaming Corp, a company that invests in projects that reduce or offset carbon emissions and promote biodiversity.

Looking at ESG more broadly, we have internal and external criteria we use to evaluate and report on a variety of measures. Our approach to identifying and mitigating ESG related risks is continuously evolving to meet or exceed industry best practices. When we decide to get involved with a new partner, a thorough evaluation of risks is at the forefront of our investment process and helps us make responsible investment decisions with the goal of generating long-term value for our shareholders, communities and partners.

What makes Osisko Gold Royalties an exciting story?

Osisko Gold Royalties has matured as a royalty company. We have the assets that we purchased in the last market downturn that should lead to peer leading growth over an extended period. The combination of significant and growing cash flows, diversification and upside make us both an exciting growth and value story, which is extremely rare in the gold sector.