OR Royalties Inc.

Good morning, ladies and gentlemen, and welcome to the Cisco Gold Royalties Q4 2022 Result Conference Call. After the presentation, we will conduct a question and answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. Please note that this call is being recorded today, February 24th, 2023 at 10 a.m. Eastern Time. Today on the call, we have Mr. Sandeep Singh, President and Chief Executive Officer of and Mr. Frédéric Ruel, Chief Financial Officer and Vice President, Finance. I would now like to turn the meeting over to our host for today's call, Mr. Sandeep Singh. Bonjour, Mesdames et Messieurs, et bienvenue à l'appel conférence des résultats du quatrième trimestre 2022 de Rendevances Aurifères au Cisco Limité. Après la présentation, nous procéderons à une séance de questions et réponses. Si vous désirez poser une question, veuillez appuyer sur l'étoile suivie du numéro 1. Veuillez prendre note que cet appel est enregistré aujourd'hui le 24 février 2023 à 10 h de l'Est. Nous avons sur l'appel aujourd'hui M. Sandeep Singh, président et chef de la direction, et M. Frédéric Ruel, chef de la direction financière et vice-président de la finance. J'aimerais maintenant céder la parole à votre hôte, M. Sandeep Singh.

Thanks very much, Joelle. And thanks to everyone online with us this morning. I look forward to walking you through what was a very exciting quarter and a very exciting year for us in 2022. As I do, I will be referring to a presentation that's on our website, if you haven't picked it up already, on the main page, just on the left-hand side. If you hit Q4 in 2022 results, it'll take you to it. And I'll be referring to page numbers as So I urge you to review that disclaimer on slide two. So looking at slide three, you start, as I said, 2022 was a very important, I'd say, frankly, pivotal year for us. We made significant strides on a number of fronts, many of them listed on this page. If we start with the simplification, the ongoing simplification of our business, You know, 2022, in particular, the third quarter, took a massive leap forward with the deconsolidation of our financials with Cisco Development Corp. You know, it was just an accounting issue, but it was a meaningful one of kind of combining a company that generates cash flow all day long and one that is advancing its projects and investing in the future. The growth just didn't leave a recognizable entity. So happy to have that situation behind us. In terms of the portfolio of assets, our asset base continues to strengthen. We had three consecutive record quarters on most of the things that matter to us from a royalty company perspective. And we'll talk about what the outlook looks like for us as we move forward. We also reset the balance sheet in spring of last year. I think we reset the balance sheet for our next wave of growth and de-levered at the right time. We continued our consistent trend of returning capital to shareholders. In aggregate, 63 million Canadian returned to shareholders last year, really almost exactly two-thirds of that via dividends and a third of it via our buyback program. And we'll show you a slide later on, but over the last five years, we've consistently done that, essentially returned a third of revenues or a third of every dollar derived from an ounce delivered to us back to shareholders through a combination of dividends. And then we think that sets us in a pretty select company. We continue to have a tremendous amount of free upside and optionality playing out in our portfolio. Again, through the presentation, we'll touch on a few examples of that. We look forward to being able to tally the amount of work that our partners did in 2022 and share that with you. But certainly we're seeing the impact of that work kind of all around us. With respect to our largest asset, our flagship asset at Malartic, the consolidation that Amigo Eagle is currently underway, very close to completing in terms of buying the second half of that asset. is a very important catalyst, one that we'll spend some time on talking about today. But, you know, I think even last week in terms of their release and some of the commentary that they're guiding towards in terms of what the synergies can be with them now owning 100% of Malartic, what they mean for us is quite impressive. And then as we've talked about a number of times, 2022, we didn't really see the benefit of Malartic some pretty important step changes at assets like Mantos and Eagle. We do expect to, we'll start to see the benefit of that in 2023. Those aren't the only assets that we have that are undergoing, you know, either material ramp ups or expansions over the next few years. Island falls into that category. Lamac falls into that category. There's just an awful lot of good work being done on our producing asset base. lengthening it and growing it, which underpins I think this company for a long time to that. there's an exceptional amount of growth. 2022 saw a 12% increase over our GEOs delivered to us over the year before. We put out our guidance, which shows a meaningful uptick again this year and really a sustained level of growth for quite a long time with the existing asset portfolio. And then in 2022, we did not just four, four larger transactions or a few smaller ones that spliced in, But we were very happy with the manner in which we were able to allocate capital in 2022. Just finishing on that growth box, if you will, I think the growth for us is very multi-layered, I would say. It's, again, those existing producing assets that are getting stronger. It's new assets that are coming into the mix for the rest of the decade. It's that optionality that I talked about of our portfolio highlighting some pretty hidden gems. And then it's the external growth, all of which I think is working well for us. I won't spend too much time on slide four. That's just a reset. We love showing that slide. We'll do it every chance we get because I think it's important. Almost alone, it kind of tells the story of a Cisco in terms of commodity focus, obviously, geographic focus, partner quality, asset quality. And then on the top right-hand side, we've taken the step of just highlighting, again, some of those assets, core assets to us. Many of them are steady state and continuing to do a good job. And then an additional significant chunk, some of the biggest ones, are going through step change improvement. On slide five, again, these are names we've talked about in terms of the recent acquisition story for us in 2022. I won't go through the specific names. We can certainly come back to them later. But I will remind everyone that all four of these, in fact, the smaller ones that we did as well, were all bilateral underscore all, not a single process on that list. I think they were all fair transactions for us and our partners. Good jurisdictions, good operators, partners, big upside in all. And I frankly think significantly better returns than we've seen in pockets of the sector for the last couple of years. And frankly, that's what it takes for us to transact. All of those, all of the above. And if we don't see that, we'll be very patient, extremely patient, and we'll continue to return capital to our shareholders. But if we do see it, I think we've shown the conviction to follow through on things that we believe in. Moving to slide six. Again, I think we have to spend a bit of time given the importance and given the kind of recent story that continues to strengthen. I've said this before, I mean it, you know, literally every time we hear from our partner here at Agnico, the story is getting better. um obviously it's an important asset even if it was just what it was kind of put on paper as a couple years ago kind of transitioning to 500 600 000 ounces a year from the underground that's the plan that's how most people currently think about it i would wager that's how most people currently model it from an analyst perspective and that in itself is is great uh that too i would remind you is only based on half of the current 15 million ounces that are available underground 2022 saw an important year in terms of infill drilling, and that's on the next slide. If you want to jump ahead, basically just over 6 million ounces moved into an aggregate in the M&I category, so pre-material lift of inferred into M&I, the overall resources. stayed the same, or largely the same, from the drilling in 2022, but happy to see the infill drilling improve the M&I. Overall, if you look at this last bullet, the extension drilling that they've done has been very productive with the boundaries of the deposit, if you will, growing in both directions to the east by 1.7 kilometers to the west by 500 meters. So quite a big footprint that currently isn't in any kind of category in terms of resources. And I think certainly my expectation, our expectation is that after another similar year of drilling, kind of a third in a row, 164,000 meters envisaged in 2023, not only will we see that continued trend of category improvement, but also hopefully that'll be the year where we see an uptick in uh, with enough infield drilling or enough space, a tight, a tight enough spacing in that footprint to add more ounces. And I think that's, if you read the release from Amico last week, that certainly seems to be what they're pointing to over the course of 2023. Uh, so that is a phenomenal story. Uh, if you look at the next slide, slide seven, um, you know, then you turn your attention to the spare 40,000 tons of, uh, per day of capacity in the mill that will be in place by 2028 or available by 2028. So we're certainly looking forward. I'm looking forward to sitting down with our friends at IGNICO next week to make sense of everything they said in their Thursday afternoon release, because frankly, it was a bit head spinning, but overall, all of it was extremely positive for us. I'm sure you folks would. I certainly would like to get some more details on that plan. But I think it's, you know, the upshot of it is, you know, the Canadian malarctic mail with 40,000 tons roughly of spare capacity later in the decade is the center of gravity for the Abitibi. And I think what's, uh, what the next leg of that, uh, and that's, that's kind of given, I would imagine most people have in their minds, but when you take into account the rail line that runs through, through the mail, basically through the property, all through all of these assets that you see on the bottom of side seven and the MTV on the Ontario and Quebec side, that significantly, obviously, based on the commentary, increases the area of influence, if you will, or the catchment area that that mill can benefit from. To have a scenario where Our partner is talking about potentially 500,000 ounces of annual regional gold coming into that mill is a huge benefit to us, not just because of our 40 cent per ton mill royalty, but also because many of the names that they mentioned, we also have 2% royalties on, whether it's Upper Beaver, Wish to Think, Could Go East. as opposed to west to Macassar, that shows you that center of gravity that Canadian Malartic will become once it has spare capacity. Or whether it's talking about things like Upper Canada, obviously, AK is already in the mix at Macassar. But essentially, most things, not all, but most things that were discussed in that update have significantly important implications for us. And so we look forward to getting maybe not immediately, but over the span of this year or some period of time, more clarity on what that looks like. It only could mean positives versus, I think, the way most of you on the line from the analyst community certainly look at us and value us. And I would imagine the same is true on the investor side. And that was without really even talking a whole lot about additional mill feed from Canadian Malartic itself, from the Odyssey project itself. Again, 20 years, give or take, two decades of production based on half of the underground resources. Most of that is now in the M&I category, I would imagine, and not inferred anymore. So not only will drill spacing, I think, add more mine life, I think the extension drilling will add mine life. It's our assessment, my belief, that before too long, it will also add throughput. So that, you know, obviously it's preferential for us to see our partners putting through up to 5% NSR material through that mail as opposed to even 2% or just benefiting from the mail royalty. So that is tremendous news flow for us. It's recent, you know, dates back to Thursday, I think it was. And so I think more visibility on that, more understanding of all that will only strengthen the story. On slide eight, I'll speed up here a little bit to get to the actual financials. On slide eight, I think we've talked about already MANTOs, maybe one layer deeper. We do expect a significant uplift for MANTOs this year. The deferral from 2022 into 2023, not a big deal, but we're certainly happy and looking forward to seeing those geos come through. I think Q1 will still be a little bit volatile, or at least we're assuming it will. And thereafter, we expect the seed deliveries steadily pick up. So that's good news. And then the commentary around the next expansion and the study that will come out in H2 of this year, again, I think feels very, very positive. So we'll wait for our partners at Capstone to make that determination. But everything we're seeing and hearing, I'm sure the same is true for you, bodes well. With respect to Eagle, again, You know, we saw collectively with us and them a tougher 2022. We were all expecting them to take a step forward. It was turned into a step sideways and back a little bit, if you will. The guidance for 2023 is positive again. And the study that they put out and that trend to get to essentially 200,000 ounces, which is what they're New mine plan press release, not report, but new mine plan press release today highlights or depicts, I think, is still a very positive place to end up. They need to do the work to get there, but at first glance, that study looks positive. A little bit higher cost for them, obviously, but we were pleased to see that the total ounces, in fact, a little bit higher, and the average production still in that 200,000-ounce range that they've talked about. Project 250, probably a discussion for another day at best, but I think even ending up at 200 steady state is a win right now and is a step-change improvement for us. So we look forward to them making progress on that. And with respect to Eleanor... At Newmont, again, just last night, I think it was overnight or yesterday morning, Newmont came out with their numbers. And we were quite pleased in terms of the commentary around increased productivity, increased flexibility. 2022 saw 250,000 ounces produced and to be pointing to 265 to 295 for those reasons, I think is good news. So we'll see how that flows into the year. On slide nine, again, good things happening across the portfolio, whether it's the ongoing expansion work at Island that will fully kick in by 2026 and in time will mean current production being between 120,000 to 130,000, 135,000 range, I believe it was, to more than doubling. but also more of that. Currently, none of that production comes from the 2% to 3% royalty ground, and time more will. So that, not only the expansion, but their transition onto our better royalty grounds will be a massive benefit to us. In 2022, we saw a little bit of a dip from LAMAC. Their guidance for 2023 shows the opposite, a significant improvement. So good news happening for us on those assets as well. We're spending some time on 10, like $10. I noticed this this morning, it says entering an important phase of growth. I think we've entered it. I think we've seen now a step change that hopefully should maintain and strengthen in terms of how many geos we're getting on a quarterly and annual basis. Again, 12% growth last year without our core assets hitting their full stride. Guidance this year of 95 to 105,000 ounces. That includes growth from our existing asset base. It also includes the assumption that the CSA transaction will close here in the very near term, at least the silver component. That's the only component of that deal that's certain, if you will, and has a February 1st effective date, so 11 months of silver from CSA. We haven't factored in either into the guidance or the outlook the copper stream potential because we don't know how much, if any of that will come in, but certainly we're optimistic that we'll be getting a fair chunk of it. But until we know what that looks like, we'll keep it out of the guidance. And then an outlook five years from now in the calendar year 2027 of between 130,000 and 140,000 ounces. So again, that sustained level of growth on assets that we have. There has been, I think it's obvious, and it happens in our portfolio, some slippage for sure. I'll point to permitting at San Antonio. We have been talking about seeing permits at San Antonio in 2023. Sorry, maybe as early as the end of 2022. Obviously, very few people, if any, are getting permits out of Mexico right now. So we still hope that that will be something that can move forward this year. Maybe it has to wait till an election in 2024, but we still have plenty and still see plenty of time for a catch up. That is a fairly simple. or a simpler project from a mining perspective. So caught in that five-year time horizon for sure is our expectation right now. Similarly, at back 40, probably a slippage of a year, that one. I think we saw coming in in 2026. Maybe it comes in in 2027. But the slippage had to do with delays in feasibility study and then still have to get re-permitted. So some slippage, but that's the beauty of a portfolio as deep as ours. because there are other things that are coming on. Important to point out as well that in that 2027 year, we do see Renard, based on the current plans, peering out the diamond stream there, although there are resources currently in place and a healthier entity that could potentially extend that. just assume that it's not the case to be cautious on that asset. Obviously, we always want to be cautious on that asset because history of it. But, you know, five years is a long time. And on the current trajectory, there's certainly an expectation that things can potentially extend based on resources that currently exist. And if it doesn't, then that coming out of that bar is can be replaced by a sliver of production. I would emphasize a sliver based on some of the things that are in that optionality category. Any combination or subset of initial production from Hermosa or Maramaka or West Kenya or even Pine Point, you take any couple of those and that can make up the difference. So really pleased with the way things are shaping up. Nothing in the mining sector is a straight line, but very happy with the progress that our partners are making. And again, when I remind you about, you know, what this company looks like in terms of existing producing assets, getting stronger with the one exception of a short life asset in Renard. Otherwise, all our core assets really have a long runway in front of them and they're getting bigger, not smaller, many of them. And the new assets that are coming on, strengthening us as each one comes onto the portfolio. Very pleased with this growth trajectory. That growth stays in great jurisdictions and we'll look to supplement it as things progress. I will point out It is on this just because I was asked a couple of questions. I wasn't going to do it otherwise. But we're also doing good work. We're seeing good work progress at a Mulsar in Armenia. We we try not to talk about it until there's an ultimate end game there. But I think everyone realizes that we've been trying to to reactivate that stream. It's a really important asset that comes in. north of 200,000 ounces a year, and it was about 70% complete two years ago. So yesterday, the folks that picked it up would have noticed that the government of Armenia had a trilateral agreement signed with the company as well as the Eurasian Development Bank for $150 million debt piece into the assets, which goes a long way towards fully funding the rest of the construction. Still need the right entity to come in there and finish that for us. But a great step and the government squarely behind the asset, making a lot of positive commentary around it and the need for it to move forward. So I would call that progress. I would call that significant progress, but we're not factoring that into any of our numbers until it's a done deal and really only mentioning it because I was asked. From start to finish, once that actually moves forward, that's probably an 18-month to 24, at most, rebuild or completion of build cycle. So hopefully that's something that is hitting this five-year outlook sooner than later. On the next few slides, we've taken a different approach at highlighting some of the catalysts in our portfolio and Somewhat chronologically ordered, somewhat not, but all the things that are happening in the next year plus, 2023, 2024. I talked about the first four, so I won't talk about them again on this page, but underscore the fact that these are real assets. Emphasis on the real. These are real catalysts. We're not stretching to come up with good news about our portfolio. Even if you took a few of these stack patterns alone, they would be impactful to our company. If you take them in aggregate, it's an embarrassment of riches. So, you know, if we're talking about the progress at Windfall, obviously with the feasibility, the power deal with the Cree, you know, this is an asset that has a ramp down somewhere well below 600 meters. It's got 15 rigs on it, 13 plus kilometers of underground development. That is a phenomenal story for us that's continuing to take shape. We're bullish on zinc. I personally am bullish on zinc, at least the right assets. And I think we have two of them in Hermosa. We look forward to the FID decision mid-year. That's an important asset for us. At the Cisco Metals, we were very pleased to see Appian, the private equity group out of London, step in and make a essentially $100 million investment into that project and company over the next four years to earn up to 60% of it. $75 million of that will go into the assets. on a somewhat expedited basis, it's a lot faster advancement, uh, to FID than a Cisco metals could have done on their own. So, uh, that's, uh, supercharging was an important asset for us based on the old PA, uh, to put into perspective, that could be 9,000 geos, depending on your commodity price assumptions, 9,000 geos a year, uh, once in production. So to have that starting to, to, to gain momentum is, is excellent. Corvette's another one I'll talk about, and I'll probably skip the next two just to get to, uh, Get the Q&A faster. But, you know, Corvette and the 2% lithium royalty that we have on what looks like most of a potential Patriot battery metal deposit doesn't, you know, there's no resource yet, but looks like covers 70% of what might be meaningful, basically just missing a corner. You know, that's turned into, over the span of a year, a microcap company to a $1.3 billion entity. Long way from production, obviously, but some of the most important and impressive drills I've seen in the lithium space. I think the best run I remember is 25 meters of 5% lithium oxide. That's direct shipping for, basically. So that was in the back of our portfolio. We basically paid nothing for it. We didn't pay anything for it. And we have a 2% royalty on that entity that shows you, again, the optionality of the royalty sector. And then I think more specifically the optionality of our portfolio. So good things happening. Again, I'll jump to it, but good things happening on all three of these pages. I'll throw it back now to Fred Ruel to walk you through the specifics around the year and the Q4, and then I'll be back with you to just tidy things up.

Thank you, Sandeep. Good morning. Thank you for joining us today. Let's start with some highlights on page 15 of the presentation. So as discussed, record 89,267 GLs in 2022, an increase of 12% over 2021. We add record revenues from royalties and streams of $218 million compared to $200 million in 2021, which translated into record cash flows from operations of $175 million compared to $153 million in 2021. which is a 14% increase. Our cash margin was stable at 93%. We have increased our accordion feature of the revolving credit facility. We have extended the maturity date as well to September 2026. We have repaid our converts at the end of December using $150 million from our cash balance, and we drew the remaining $150 million from our credit facility. We've also repurchased 1.7 million shares in 2022 at an average price of $13 Canadian. On page 16, we present our geos by asset and by commodity. Gold represented 69% of our geos in 2022, silver 19%, and diamonds and other commodities 12%. On page 17, we present the growth in our revenues from royalties and streams and the growth in our operating cash flows compared to 2022 compared to 2021. If we move to page 18, net earnings from our royalty and streaming business were $85.3 million or $0.47 per share compared to $76.6 million or $0.46 cents per share in 2021. Adjusted earnings amounted to 111 million or 62 cents per share compared to 94.4 million or 56 cents per share in 2021. Of course, 2022 was an annual record. On page 19, we have a summary of our quarterly and annual results. including 25,000 GOs for the fourth quarter for a total of over 89,000, as previously mentioned, compared to 80,000 GOs in 2021. Gross profit amounted to $43 million in Q4 for a total of $150 million in 2022, compared to $139 million for the previous year. Adjusted earnings in Q4 reach $34.9 million or $0.19 per share compared to $23.8 million or $0.14 per share in Q4 of 2021. On page 20, we present a breakdown of our cash margin. So the cash margin from royalties reached $40.8 million in Q4. and $143 million for the whole year. The cash margin from our streams amounted to $17.4 million in Q4 and slightly below $59 million for the year. For a record $201.7 million in 2022 compared to $187 million in 2021. On page 21, we present the value of shares buyback and dividends paid in function of the average gold price on an annual basis. During the last five years, we have returned in dividends and share buybacks approximately one-third of our GEOs. And finally, on page 22, you'll find a summary of our financial position at the end of last year. Our cash balance was at $90.5 million. We held investments having a value of just slightly below $400 million. Our debt stood at $150 million following the repayment of the converts. We currently have $600 million available under our credit facility, including the accordion of $200 million. So in summary, another great quarter led by strong deliveries and a strong gold price. The year 2022 saw record quarterly and annual cash margins and operating cash flows. We've completed the realignment of a Cisco as a pure royalty and streaming company. And I will look forward to continue to grow in 2023 and in the coming years. I will now turn the call back to Sandeep before we open the lines for questions.

Yeah, thanks. Thanks, Brad. And maybe just the last things I would point out. On those last two slides that Fred alluded to, on 22, worth noting that we still have to fund the CSA transaction. It hasn't closed yet, so that will come off our credit facility, depending on how much of that deal we take. Certainly the silver, but depending on the copper. But nonetheless, our balance sheet remains exceptionally strong. have a lot of firepower at the right time on the credit facility sale through our cash flow, which was meaningful last year, will, depending on the gold price, should grow this year quite substantially. And then the equity book as well, which is less liquid, but we certainly want to make some inroads on this year, and we think that's very much achievable. So when you look at slide 23, you know, we think we have the right mix. We've got meaningfully or... Incredibly senior scale assets. We've focused and we will continue to focus on high asset quality. We're going to maintain the level of consistency you've seen from us, the level of simplicity, and we're going to let our assets work and that organic growth that we talked about and let it unfold. That said, when we see things we like that we've sourced ourselves, we will we will have the conviction to follow through with them. And as I said, we have the balance sheet to do it. And if we don't, we'll remain completely disciplined. It's a pretty simple formula for us, but one that I think unlocks a significant amount of value. If you look at the bottom of the slide, And I think if we stay focused on what I just described to you, the bottom of the slide, frankly, takes care of itself because this is a portfolio that is too important. We're doing the right things with it. And if you look at how the sector as a whole, I think it's fair to say, is challenged for growth and struggling for growth. I think we've got the right um the right formula to to succeed within it and that's what we hopefully have shown you in 2022 and prior and that's uh what we think will unlock a lot of value in 2023 and beyond so um thanks for listening to fred and i on that piece and certainly open to any questions operator um when you're ready thank you ladies and gentlemen we will now begin the question and answer session should you have a question please press star followed by the one on your touchtone phone

You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the pulling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Cosmos Truth with CIBC. Please go ahead.

Great. Thanks, Sandeep and team, and congrats on a very strong Q4. And Sandeep, good talking to you again. It's been a while. Maybe my first question is on your battery metals here, the Patriot battery metals. As you mentioned, Sandeep, you know, it's pretty long-term, and it kind of speaks to the optionality of your model here. But how do you value it? You know, at this point in time, um, given that there's only a few drill holes, but also given the fact that it is now over a $1 billion market cap company. So how do you internally value it? How should we look at it? And then from that perspective, you know, what are you going to do with it? Are you just going to keep it in the portfolio for optionality or is there, you know, alternatives in terms of potentially monetizing it long, uh, shorter term?

Yeah, sure. Those are good questions. And, uh, It's funny the way you started your question, your comment, Cosmos, because I did see you at the airport yesterday as you walked past me to board a flight. No, look, I think on the battery metal side, you know, it's something we've said our focus is going to remain gold and silver. Maybe to start with the back end of your question, our focus is going to remain silver. growing our precious metals cash flow and that for sure uh in the other category which we just had more flexibility and i think anybody uh you know i think what we've shown you and said and then shown you in 2022 is a preference for copper in that space especially if we get better deals and uh access to longer life assets in the process but that's you know in moderation without changing what i said to you about the focus the fact that we can pull something like a 2% NSR on most of Corvette out of our back pocket, I think is just, you know, is an exceptional example and maybe a big example, but it's an example of the optionality of this portfolio. The fact that, you know, we do have such a large development waiting. We have a large exploration waiting that people don't even get to because you don't need to get to it. If you're trying to value us and get to one times now, you don't need to focus within the, you know, within that other category, but it matters. And those are the types of things that have driven the incumbents, the larger peers in our group for a long time. We just haven't had the benefit of it as a relative newcomer. So to have those types of wins and potential wins in the portfolio, I think is special. In that scenario, in that specific scenario, again, we paid nothing for it. The ground that we had from the Virginia acquisition that eventually ended up in Patriot Battery Metals Obviously, we value it. It's early days. How right can we be in our evaluations when there isn't a resource is a question mark, but obviously, we try to keep the tabs on everything we have. At the end of the day, it doesn't matter. It's worth a heck of a lot more today than it was worth six months ago, and I think the market is telling that with the way they're evaluating the company. Obviously, lithium will ebb and flow, and we'll see where it shakes out, but all it is is a good news story. We also, I should point out, you know, through the Cisco development, they took the rest of that ground that was in James Bay. They've already joint ventured out pieces of it because it's not going to, they're not going to get around to it themselves, but they've retained upside, but joint ventured pieces of that to different companies. And so, you know, hopefully there's other folks doing drilling there. We have a 3% royalty on all of it. You know, hard to say that we'll get another example like this one, but if there's something that kind of continues to give value out of nothing, I think that's good news. In terms of the core, you know, coreness, if you will, of that asset to us, you know, I've often said when asked, you know, would we sell royalties? You know, I've often answered no. You know, these things are very hard to assemble and you don't want to give them up. if you don't have to. But I think, you know, the truth is everything always has a value or at least it should. And this is one where, like you said, it's long dated. If it matters more to somebody else than it does us, we'll listen. And that's true of a lot of, you know, it should be true of everything. But I think in this case, given the commodity and the time horizon to it, I think that's truer of this one than anything else. So great to have it. You know, if you'd asked me about Corvette or specifically the FCI claims a year ago, I would have, you know, had a dumb look on my face and made something up, you know, because we didn't know we had it essentially, or we knew we had it, we didn't know it mattered. A few drill holes in the mining sector can change a lot.

Of course. Maybe switching gears a little bit, going to Victoria Gold. You kind of touched on it, Sandy, earlier in the presentation, but the Eagle mine had an updated mine plan earlier today. As we saw, lower annual production but longer mine life, and it seems like higher capex. I'm sure, as you said, you keep internal models on all your assets. How does that compare in terms of your internal expectations? Were you expecting longer mine life, lower annual production? I think you mentioned that it was a good news story earlier during the presentation. But could you maybe walk us through, you know, did it meet your expectations?

Yeah, look, I'd say yes. You know, in terms of the mind plan, you know, and we obviously have conversations with our partners, you know, at all times, you know, they can share a little bit more with us. And then, you know, now we're dealing with the same information that everybody has, but I will caveat my comment with the fact that I still need to, we as a team still need to pour through that press release. So I just skimmed it this morning and we had a brief discussion about it. But overall, I think what I saw, and again, with that caveat, maybe I missed something. I think in the life of mine, there's a trickle higher production, to be honest. It's obviously spread out over longer. So the backend is a little bit different. But over the next few years, I think we're seeing kind of what we expect to see. And I think an average, over the next eight years or over an eight-year period of about that 200,000 ounce mark. So that's kind of where we've been expecting them to go. Obviously, for the time being, or maybe for forever, the Project 250 is not in the cards. But even so, I think just getting up to that 200,000 steady state level, I think, is good news. It's coming at a cost. I think the truth of the mining sector, and I think if you've been following, as I'm sure all of you have, The guidance numbers coming out for 2023 so far, I think we've seen, generally speaking, a little tougher to get the ounces out of the ground and cost more. So I think that's a thematic across the entire sector. That's not specific to Victoria, but just a function of where we are from an inflation perspective for the next little while, if it's sticky inflation. In the world, it's even stickier in the mining sector. So we're comfortable with what that is. And again, that's a little bit of the dichotomy of operating company versus royalty company. But I think we're pretty pleased with what they've put out. We look forward to, as I said, spending more time going through it and then obviously getting the technical report within the next 45 days to further look into it. But overall, I think for us, we're happy with what we're seeing. I think the transition for them from single asset developer to producer, that's one that cripples a lot of companies. I think they've actually dealt with it well, especially during a COVID period, an inflationary period. We're certainly pleased with our partner, but we, as a bunch of market participants, are looking forward to a better 2023.

Perfect. Thanks, Sandeep, again, for your very good answers, and I'm sure I'll keep bumping into you at airports.

Yeah, try not to forget talking to me today.

Your next question comes from John Tumazu. Please go ahead.

Thank you. Just looking at the stock prices of your operators as lead indicators, Sandeep, Island Gold, Alamos appears to be doing well. Capstone appears to be doing well. some of these far away companies i'm not so as familiar with but what are some of your other operators where the share price is a good lead indicator and then after you give me the good news i'll ask you some questions about the other ones yeah look i mean that's uh let me find the right slides i think too i mean look i think that's a good point i mean generally speaking um you know share prices will

we'll, we'll do what they do. I think our partners overall had a very strong 2022. And I think they're poised to have a strong 2023, whether you look at, obviously it was a tough, tough day last week for Nico, for instance, but I think that story is still exceptionally strong. You mentioned capstone, you mentioned Alamos. I think if you look at our partners as a whole, you throw a new month in there with Elian or you throw in SSR El Dorado. I think our partners are on, on the upswing. I do think there's a, you know, as I touched on it with Cosmos questions, I do think there's a difference a little bit in that on the operating side, you know, we are seeing cost pressures. We're still seeing CapEx pressures. So I think if you've seen some weakness in share price, it has to do with that side of the equation. And then the beauty for us as we repossession ourselves is the, you know, the cash, you know, the cost side of the equation doesn't factor us as much as long as our partners are pushing forward with the initiatives that we need to push forward. our operators and our partners and from that perspective i would tell you that they absolutely do you know because we're we're you know we're generally talking about assets that are top one or two uh to our uh to our partners uh they're spending a lot of energy on them uh and they're important to their business they're low-cost mines for the most part so i think we'll continue to see a lot of a lot of positivity from our partners on our assets so talking about the ones where the

Stocks didn't go up. What do you think is a good time frame to expect Agnico to have East Goldie as a proven improbable reserve? Or do you think it's going to be like Odyssey, where they just produce the gold and don't bother to document reserves?

Yeah, look, I mean, I think we had the first trickle of reserves this year in the entire Odyssey cycle. deposit i think the m&i is you know m&i for for nico's probably reserves for most people i think that's the way they're they'll probably position it um so to have north of six million ounces in the m&i category a big lift almost 3x versus what was in there last year good news um you know they're drilling you know from surface largely some underground drilling now in in 2022, I think and I hope that that definition drilling will just intensify as they have more access underground. Still hitting it really hard from a drill perspective in 2023. I think it's still the same 13 rigs doing basically the same amount of drilling as the last two years.

If we move to ODC, that's down almost 80% from where you first announced the formation of the company. What are the things that attracted you to the Barkerville acquisition? Would you never make a property acquisition again or not in a narrow vein structure? What are the outlooks for this?

I think we can go back and play revisionist. to protect an asset that mattered and put it back into the right vehicle, better funded, better backed. Not in essence, but that's exactly what ended up happening. unfortunately, with a lot of pain in between from a market perspective. So no, that's not something we're looking to ever revisit. I still think that, and you're absolutely right, the share price of Cisco development was tough in the last two years. It wasn't a lot better for most development companies, but it certainly was tough on the Cisco development side. My hope and expectation is that that can bottom out and start to have a an upward trend again in 2023. I think it'll be driven largely off the enthusiasm that the market has for Tintic and that high-grade story in Utah. That initial resource, I think, on a postage stamp was really good. The fact that that postage stamp was 7% to 10% of the potential mineralized envelope, really good. The fact that Ivanhoe Electric and Robert Friedland are drilling on their immediate boundary for deep copper porphyry potential that if they find, the whole world will hear about and will transition over the boundary. So I think all that will be the good news story. Otherwise, you get paid to wait from a caribou perspective with the feasibility in and the permitting still expected for this year. I don't think that's in the stock. So hopefully between those two kind of flagship assets, and some permitting good use from a San Antonio perspective, hopefully it can be a turnaround year. We're happy to see them taking some more money and have the funds to go after their assets, continue to go after their assets aggressively. So, yeah, tough one. Absolutely. You know, we all took it on the chin from that short price perspective.

But hopefully that turns around. And they're in permitting, but their stock lags. Do you just write that off to the bets? The stock market for gold sucks?

Yes, I don't think you could do anything else. I mean, the assets are tremendous. The catalysts they've had are real. I touched on them earlier. So I think it's unfortunate that the market still doesn't give the development companies enough credit. I think the investment dollars have, especially in 2022, gone towards producing names and Hopefully, we'll see a market that's a little bit better for the development names. That matters to us on the share price. It matters to us from all perspectives. We want to see that company succeed in every way. We've got the royalty on the royalty side. We think the value of our asset has grown. On the share side, it hasn't, but I don't lose any sleep over Cisco Mining. It's just too special of an asset, and it fits on one hand very easily in terms of the things you could compare it to in the market. I think that will have its moment in the sun for sure.

Is Falco one that has a timetable to proceed? That's one where the share is sort of pretty dormant.

Yeah, look, if it does, I mean, I think it's tough to point to it right now. That's not one where we're We have to kind of commit dollars until their success going forward. So we hope that there is, but we're not kind of advocating today and pounding on the table that there will be in any kind of timeline that we can point to. Again, I hope that there is because I think it's an important 10 million ounces that's valuable. I mean, if Wazimak ore, for instance, can be railed to Malartic, then those ounces should matter too in that area. But until Glencore kind of figures out what it's doing with the government in terms of their emissions, until they kind of figure out how to be, you know, how to fit in the town of Oranuranda from a long-term perspective, I think it's tough to say that the underground ounces below the Horn 5 are going to get a lot of attention. So that's kind of option value, I think I would point at this point. I hope it does come good, but I don't have a timeline for you, John.

If I could follow up on the earlier question from Cosmos. There's a number of emerging battery metals, Marodi companies. It's a good promotional theme. I guess they need assets. The lithium price has come off. The EVs aren't selling well this month. But the stock market has an appetite. Two of the worst proposals I ever got that I refused to have speak at my conference were lithium companies, either on the basis of metallurgy or one of them had 3.4 million tons of resource per assay, like no data. So why not sell Corvette into the lithium bubble to somebody that might be able to promote it better as a pure play on lithium?

No reason other than we're not in the business of giving away value for less than what we think it's worth. So I think that logic holds. I don't know what happens to the lithium sector in the medium term, long term. I do know that the world needs more lithium assets. Does it need all of them? Time will tell. But even though it's an early stage one, I think it's one of the better ones out there that we can see. So we like what we see here. It's early days. We're very happy with the progress they're making. We look forward to seeing more, both on the exploration, ultimately the resource on the metallurgy side. But it all bodes well. The level of importance that the Quebec government is placing on battery metals, lithium in particular, I think you've seen it, and the other things they're involved in is high. you know, the government wants Quebec to be a major player on the world scale from that perspective. So there's a lot of good things, even though it's very early, there's a lot of good things pointing in the direction of that. And we'll either let that unfold if someone wants to, you know, that's in the other category where I think analysts ascribe $100 million of NAV to. If you believe in the rule of thumb that says every point of royalty is worth four or five of the assets and the market cap will imply that this asset alone is worth nine figures in our, it sits in an other nav basket that, that has a, you know, that has nine figures to it in totality with a lot of good things in there. So it's a good, a good place to be. We'll, you know, we'll take it for the time being and watch it, but if ever it mattered more to somebody else than it does to us, you know, then, then so be it.

Thank you, Sandeep.

My pleasure, John.

Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. Your next question comes from Ralph Profitti with eight capital. Please go ahead.

Hey, thanks, Sandy. But just one quick question from me, if I may. The first half of 2023, that's what you have in your presentation with respect to the CSA transaction. Just wondering, should we be thinking about that as a placeholder? It's been a while since we've heard from the metals acquisition corp guys on the progress of this complicated transaction. So just wondering what you're thinking about, you know, the timing of that. And is the silver and potential gold, sorry, copper stream gold, Uh, would, would we possibly see those enter into the guidance, um, when the deal closes, meaning that, that, that silver and that copper would come in, uh, immediately upon deal closing?

Yeah. Well, good, good questions, Ralph and good morning. And you're right. It has, that transaction has been very long in the tooth. Uh, you know, I don't, uh, uh, advocate for, for, for defacking transactions if you want to keep your life simple, but I think the team there has done a phenomenal job, um, outlasting a pretty nasty drop in the copper price last year, recutting a deal with Glencore that makes more sense, recutting a deal with us that makes more sense for us, and now coming to the very tail end of that transaction. So just before Christmas. It was odd timing, but just before Christmas, or sorry, between Christmas and New Year's, I can't exactly recall. They launched their F4 statement with the SEC. Their prospectus, essentially, has been going back and forth now. And that was one gating item. So our hope is that that gets done in the very near term. They're putting a pin in their pipe financing and getting to a SPAC shoulder vote soon. If not late March, let's probably call it April. So that one's coming to a head. We have factored in the silver into that guidance number for 2023 with an effective date of February 1st. So we factored in 11 months of silver. If that doesn't come in, then the range I would point you to is more middle of that range than top of that range. But that's what we've done because we're pretty confident. We're describing it as a coin flip in the middle of 2022. And now I see very good visibility to the end result. In terms of the copper, It doesn't really matter because there's a, even though the copper, it's all producing today, obviously. I'd remind you that in the deal, we gave them essentially a one-year hiatus on the copper. So it starts, it would start in 2024 anyways. So that would be in the guidance number for next year. So it's not in the 2023 number, nor is it in the 2027 number. We'd have an opportunity to revisit that next year, depending on how much of that copper gets taken. Yeah. Okay, gotcha. But yeah, after a long lull, trust me, we felt it. It's nice to be seeing daylight there. Understood. Thanks very much. No problem, Ralph. Thank you.

There are no further questions at this time. Please proceed.

Okay, great. Thank you, operator. Thanks, everyone, for bearing with us for almost exactly an hour and really happy with the way we ended the year, really happy with how we're set up to unlock value in 2023. We do think we've done a lot of the heavy lifting and the story is resonating right now. So we intend to kind of keep after it and hopefully we'll have good things to come back to you with. Our partners are certainly doing that and hopefully we'll continue to see a good pipeline of opportunities for us. So thanks for your time and we'll talk soon. Thank you.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.