OR Royalties Inc.

Good morning, ladies and gentlemen, and welcome to Orthoscope Gold Royalty's Q3 2020 Results Conference Calls. After the presentation, we will conduct a question and answer session. If you'd like to ask a question, please pick up your receiver and press star, followed by the number one on your telephone keypad. Please know that this call is being recorded today, November 10, 2020, at 3 a.m. Eastern Time. Today on the call, we have Mr. Sean Roussin, Chair NCO of Asisco Gold Royalties, Mr. Sandeep Singh, President, and Mr. Frédéric Ruel, Chief Financial Officer and Vice President, Finance. I will now like to turn the meeting over to your host for today's call, Mr. Sean Roussin. Bonjour, mesdames et messieurs, et bienvenue à l'appel conférent. C'est le résultat du troisième trimestre de l'année 2020 de redevances orifères au Cisco LT. Après la présentation, nous procéderons à une seule to a question and answer session. If you have a question, please unhook the phone and click on the number 1 on the screen. Please note that this call was registered today, November 10, 2020, at 10 a.m. U.S. time. We have on the call today Mr. Sean Wilson, Chairman of the Board of Directors and Chief of the Orifair Revenue Directorate of Cisco. Mr. Sandy Singh, President, and Mr. Frédéric Ruel, Head of the Financial and Investment Directorate. I would now like to give the floor to your host, Mr. Sean Roussin.

Thank you, Dr. Roussin, and welcome everyone to the third quarter of the third quarter of Cisco Global Values, or Cisco OCR. This morning, we're going to have a presentation with Fred Ruel, our CFO, Welcome to our third quarter conference call. We will be following the format this morning with Fred Ruel presenting our financial results as reported. And then Sandeep Singh, our president and to be CEO will be coming on and giving us the rest of the corporate presentation for today. We will be referring to some forward-looking events, and we have a presentation on our website titled Q3 2020 Results that you can follow this morning. I will give a small preamble this morning and then pass it over. As you know, we are in the evolution of the Asisco story with the purification of the royalty model for Asisco Gold Royalties through the spin-out of the Barkerville and San Antonio assets into the new entity of ODEV. That vehicle will probably start trading in early December. And some more work left to do on that as we get into it. And that should simplify the business of Cisco Gold Royalties on a forward basis. Quite excited about the evolution there and the aspects of what's happened with the ODEV assets, both at Barkerville and San Antonio, as we move forward. And I think it goes well to... explaining why we believe Cisco Gold Royalties has the best business model in the space with the sidecar accelerator business, providing unequal opportunities to Cisco Gold Royalties as we evolve in the space and continue to execute our business plan to build the best business around the royalty model in the sector. On that note, I will hand it over to Fred Ruel to give you the financial highlights. And then Sandeep will take over after that. Fred, over to you.

Merci, Sean. Good morning, everyone. Thank you for joining us today. A strong third quarter for Cisco with production rebounding very well from Q2 and the COVID impact. We earned 16,739 GEOs in Q3, generated record revenues of $41.2 million, record operating cash flows of $36.1 million. and an operating margin on our royalties and streams of over 96%. Net earnings were $12.5 million, or $0.08 per share, while our adjusted earnings were $17.5 million, or $0.11 per share. We also acquired during the quarter the remaining 15% ownership on the Canadian Precious Metal Royalty Portfolio, which includes royalties on the Island Gold and Lamac Mines. We also announced a strategic partnership with Regulus for $12.5 million U.S. And of course, as you all know, we announced in October the spin-off transaction and the creation of a Cisco development. On page four of the presentation, we show our production by assets and by products. Again, the Canadian Malafik mine delivered strong results, and Victoria continued to increase the deliveries. In Q3, 70% of our production came from gold and 27% from silver. As presented under page 5 of the presentation, we recorded record revenues from royalties and streams of $41.2 million compared to $33.9 million in Q3 2019. Cash flows from operating activities reached a record $36.1 million compared to $28.3 million last year. If we go to page 6, we have a breakdown of our cash margin for Q3 and year-to-date. The cash margin on our royalties increased in Q3 to reach $30.1 million compared to $23.4 million last year. For the first nine months of the year, the cash margin on royalties reached $76.5 million, an increase of $5.9 million compared to Q3 2019, despite the COVID impact on our deliveries during the second quarter. The cash margin on our streams was $9.6 million in Q3, compared to 7.4 million in 2019, and 25 million for the first nine months of the year, 4.5 million higher in 2019. This resulted in a cash margin on our royalties and streams of over 96% in 2003, in fact, 96.4%, compared to 91% in 2003 of last year. Our total cash margin reached 40.5 million, 8.7 million higher than last year. Year-to-date, our total cash margin was $104 million, an increase of close to $10 million. On page 7, we have a summary of our earnings and adjusted earnings. Net income was $12.5 million into $0.038 per share, compared to a net loss of $45.9 million last year, or $0.32 per share. The loss in 2019 was due to impermanent charges. Adjusted earnings for Q3 reached $17.5 million, or $0.11 per share, similar to last year. On page 8 of the presentation, we have a summary of our results for Q3 and year-to-date. Geos from gold production were lowered this year, partly due to the sale of the Bruce Jackoff take in Q3 2019 and the remaining impact of COVID. But this was more than offset by strong silver deliveries. The decrease in our total revenues from $109 million to $56 million was also due to the sale of the Bruce Jack offtake last year, partially offset by a higher realized price on gold. Our average gold price per ounce sold amounted to a record $2,545 Canadian in Q3 of this year, compared to $1,952 in Q3 of last year. Our gross profit for Q3 increased to $30.8 million from $20.9 million in 2019. On page 9, we have a summary of our strong financial position. Our cash balance at the end of Q3 was $161 million. Our debt amounted to $422 million unchanged from Q2, including the $100 million accordion available under our credit facility. The facility has over $400 million available at the end of September, allowing us to quickly deploy capital as needed. Finally, on page 10, you may find our updated guidance that was released in early August. We expect GEOs of between $33,000 to $35,000 in the second half of this year, with a cash margin on royalties and streams of approximately 95%. We anticipate a continued upward trend in general deliveries in the fourth quarter, and we believe that we are in an excellent position to meet our forecast for the second half of 2020. I'll pass the talk to Sandeep for the rest of the presentation. Sandeep, to you.