Gold Royalty Corp.

Good morning. I'm Joanne Jobin, your Vid Media host. Welcome to the Gold Royalty Quarterly Town Hall Forum. Before we commence, just a reminder that if you have any questions for the company, please place them into the Q&A tab. It's located at the top of this screen. After the presentation, I will be delighted to moderate submitted questions from our audience. With us this morning is the Gold Royalty team, led by Chairman and CEO, David Garofalo, who will make the intros to the team and take you through the highlights of the most recent quarterly results. David, the stage is yours.

Well, good morning, everybody, and I'm delighted to be joined today by our CFO, Andrew Goebbels, our Director of Corporate Development and Investor Relations, Peter Benke, who will take you through our financial results and the results of our royalty portfolio and update our royalty portfolio over the course of the presentation today. But look, I thought I'd start the day talking about the gold price. And it's been an auspicious start to the year with the gold price up about 14, 15 percent. And if there's one word to describe the dynamic, it would be China. And we've seen a significant amount of buying both at the central bank level and also at the individual level in China. And really, that's a microcosm of what's happening globally in terms of currency growth. uh relative to each other the gold price has done well and every major currency in the world has achieved all-time nominal highs but still well off what the real all-time high for the gold price is back in the early 1980s when you inflation adjust the peak gold price back in the last big inflation cycle in the late 70s and early 80s to 20 24 uh the gold price is still a good 20 30 percent below the all-time highs but i would argue that We're in an environment now where the gold price is poised to significantly outperform even those peaks on a real basis, given the debt dynamic we're seeing globally. With global debt, the GDP is still at an alarming 350%. relative to only 100% in the last big inflation cycle in the late 1970s, early 1980s. So there's very limited latitude for central banks to really increase interest rates dramatically to deal with what's really double-digit inflation that we're experiencing in the economy, not the 3% or 4% headline numbers that, frankly, are economic fiction. Those exclude all the important things that we need like food, fuel, and shelter. And as mortgage rates reset across the industrialized world, in particular North America, we're going to see a dramatic increase in monthly mortgage payments. And that is inflation. That eats away at the purchasing power of individuals. And that really will continue to drive capital into gold relative to other major currencies that are actually inflated. yielding negative on a real basis. Sovereign debt is eating away at your savings. So if you're buying U.S. Treasuries, if you're buying Canadian Treasuries, Euro, Japanese, you're not seeing your savings go up even with nominal rates at relatively high rates. With inflation eating away at the purchasing power of our currency, we're starting to see savings being eaten away, whereas gold is a tremendous preserver of capital in that type of environment. And gold is a barometer, an accurate barometer. It's an agnostic barometer of what's really happening in inflation on a real basis. And that's why gold has been a one-way trade for over 50 years, whereas the U.S. dollar has seen a decline of 96% in its purchasing power over that 50-year period since the U.S. government abandoned the gold standard. We've seen the gold price go from $35 an ounce on a nominal basis to almost $2,400 an ounce today. Gold is the currency you can't print. The U.S. dollar and every other major currency is seen prolific printing and debasement of the purchasing power of those fiat currencies over a long period of time. But what we're not seeing is a massive response in the gold valuations on the equity side, particularly among the producer universe. The juniors have had very limited access to capital for a long period of time. They're still not seeing that incremental dollar, that marginal dollar of investment allocated from the general equity markets yet. There hasn't been a response. But even among the largest producers in the space, We've seen a muted response to the gold price. And in fact, if you look at the bellwether stocks, whether it's Newmont, whether it's Barrick, their valuations, actually, their share prices are below where they were in the 1990s when the gold price was a tenth of what it is today. And they're dealing with the overhang of cost inflation. which we're able to avoid in the royalty model. We're completely insulated from that with the top line exports that we have within our portfolio. But also this is an industry that's experienced decreasing reserves over a long period of time. And as a result, we've seen the cannibalization of companies in the producer universe. Barrick and Newmont, the largest producers in the space, have really seen no increase in their production or reserves over the last 25 or 30 years. But they've seen a massive increase in their share count because they've had to absorb other companies to maintain a suboptimal production rate. So that is a microcosm of what's happening among the producers, among the equities in the space. We haven't seen that kind of leverage that investors are looking for in the equities space. because of the overhang of cost inflation, but also because of the industry continuing to shrink in terms of its reserve base, particularly given the lack of access to capital among the explorers, the juniors that really dried the exploration focus in the industry. And that lack of exploration success has led to a declining pie, shrinking pie in the producer universe. It's been a good start to the year for us from a share price performance standpoint. We're up nearly 30%. So we have provided leverage to the gold price. You'll remember the gold price has gone up about 14, 15% this year. We've gone up about 30%. And we still think there's a significant re-rate opportunity when you look at the relative valuations, particularly given our growth profile, which I'll touch on a little bit in a bit more detail. And Andrew and Peter will get into that in a bit more detail over the course of the presentation. But also, if you look at the quality of our portfolio, we have over 240 royalties, but we have royalties on three of the five biggest producing gold mines in North America. So we have a quality proposition. We have long reserve lives. We have a long profile of revenue growth right through the end of the decade, peer leading revenue growth, which we think will continue to drive a given the quality of our portfolio, the location of our portfolio with the vast majority of our royalties in the best jurisdictions in the world from a mineral potential standpoint, low political risk and low regulatory risk. And I have to say that revenue growth is no longer theoretical. We've been talking about that revenue growth since our inception three years ago. That's starting to happen now. We saw more than a doubling in our revenue in the first quarter of this year. Driven by the acquisition of Borba Rema and Kozuman late last year and getting the first full year of benefit from those. And those are quality assets and quality jurisdictions providing meaningful leverage to gold and copper prices. Performance improvement at Canadian Mallardic, where we have some exposure in royalties in the open pit. And we're starting to see a bit of a catch up. There are some underperformance last year in the Barnett pit. But also we're starting to see underground production from Canadian Malarica. We have substantially more royalty coverage than we have in the open pit. So that's going to be a big driver for growth for us going forward. So, again, more than doubling our revenue in the first quarter and peer leading growth right through the end of the decade. We're expecting on a consensus basis, about 60 percent compounded annual growth right through the end of the decade, driven by principally by those big bulge bracket operations that represent three of the five biggest producing gold mines worldwide. in North America, but also Borborema and Cozumel provide us a meaningful source of revenue growth going forward as we just only recently folded those into the portfolio late last year. Q1 was an excellent start to the year with $4.2 million of total revenue when you include land agreement proceeds, royalty revenues, et cetera, essentially achieving about 40% of our full year guidance in the first quarter alone. So it puts us in an excellent position to achieve our revenue guidance, total revenue guidance of between 10 and 11.2 million for the full year. And that's really that is without the benefit of royalty revenue from the newly commissioned Cote mine, which started production on March 31st of this year and will represent a significant leg of royalty revenue growth in the second half of this year as they expect to achieve commercial production in the third quarter. Together with another 10% decrease in our operating costs, again, Andrew's done an exceptional job since he took over as CFO a little over a year ago and driving costs out of the system. That's our post-merger integration efforts. We absorbed three companies in 2021, and we continue to find efficiencies as we start to integrate all of those companies and rationalize all of the holding companies we have within the portfolio together. and really focus on the core of our business. So we continue to drive down our operating costs and our revenues continue to go up. That's the perfect formula for driving free cash flow for the first time in our history in Q1 of this year. And we continue to expect free cash flow generation going forward. That's a remarkable achievement for a company that's only been in existence for three years. So from a concept effectively on the back of a napkin in a cafe that Amir and Anani and I created, sat down and conceived of this company. We've gone from really a standing start where we had no revenue in our IPO to today, peer leading revenue growth, free cashflow generation, and the prospect of positive earnings going forward. And we have been busy on the strategic side as well. As I said, we acquired two cash flowing royalties last year in Borborema and Cozumel. And Instrumental to that acquisition of the Barbarama Royalty was a strategic partnership with Taurus. Taurus helped fund that acquisition through a convertible to venture along with Queens Road, another significant strategic shareholder in the company. And Taurus has a dedicated royalty fund. And they've chosen us over every royalty company in the world that they could have done work with to forge a strategic exclusive alliance on co-investing on new royalty opportunities going forward above $30 million in value. So that means we can look at bigger deals because we have a partner beside us that can co-invest in those royalty opportunities. And not only that, we can share due diligence costs on major royalty opportunities and streaming opportunities as well. So it helps continue to rationalize our operating costs as well as provide us a source of meaningful capital for investment and new opportunities going forward. So with that, I'd love to hand it over to Andrew to talk to our financial performance in a bit more detail.

Thanks, David. As you would have seen in our reported results, it was a very solid quarter. Our record revenue, which you see here on a reported basis, was higher in the first quarter, 2024, really due to stronger production from areas of the Canadian Malartic mine covered by our royalty. And importantly, as compared to 2023 in the first quarter, we had included the first full quarter of reproduction payments from Borborema, as well as the recently acquired Cozumel Royalty. So it's a testament to our acquisition strategy, yielding benefits in the top line for the first quarter of this year. when looking at total revenue land agreement proceeds and interest which is the figure we like referring to because it's inclusive of all our cash inflow sources now that includes the full amount of land agreement proceeds and the interest income from the the borborema gold link loan Now, that number was 4.2 million, which again is 112% increase from Q1 2023 and was higher again, as I mentioned, from the contribution from Canadian Malartic, Borough of Braemar and Cozumel but also from larger scheduled payments received from certain operators within the company's royalty generation business in Nevada. So again, that part of the business really paying dividends in the first quarter of 2024. Once again, cash operating expenses were lower, 10% lower in the first quarter as compared to the first quarter last year. As a company, we continue to deliver on our discipline cost management efforts and expect to see steady operating costs going forward through the rest of the year. As a result of the higher revenue and the moderated costs in the quarter, further to what David mentioned, Gold Royalty did report its first positive cashflow from operations of 0.3 million. Now that excludes 1.1 million of land agreement proceeds, which is accredited against the mineral properties in our reported numbers. Now, if we did use the total revenue and agreement proceeds and interest instead of reported revenue, our operating cash flows would be closer to 1.4 million. So a very healthy operating performance in the quarter. Now, we have frequently stated that 2024 will be a transitional year for the company whereby we become a cash flow generator, which is very important. And this first quarter really demonstrates our considerable progress over the prior quarters and really sets us up for a strong fiscal year in 2024. Now, what hasn't changed is the company's strong revenue growth trajectory beyond this current calendar year. In fact, this profile you see here, and you've seen this page before, has improved considerably since adding assets such as Borba, Raymond, Cozumel in the near to medium term in particular. but also having core assets such as Cote, Porn First Gold at the end of Q1 of this quarter and really coming into fruition through 2025, 6 and 7 within this cash flow profile. um we do continue to have the best revenue growth profile in the sector over the next five years that message hasn't changed and this is per the average of broker estimates um now using broker estimates the long-term gold price if you recall is is around 1900 an ounce so below current gold prices So looking forward, if you do expect positive gold prices to continue, we could see even further upside to this growth profile. Also recall that revenues within our pipeline are really driven by and underpinned by large, fully funded projects being developed by the likes of Inico Eagle in Odyssey, Barrack in Wren, and I Am Gold in Côté Lake, amongst others near-term, and also well-capitalized partners such as Aura Minerals and the Barbarama Project. We are very comfortable and confident that this is an achievable and low-risk revenue growth profile that you'll see coming to fruition as we move forward year on year. Now, with that, I think it's an ideal natural time to pass over to Peter, who can give you an update on the company's asset pipeline going forward.