OR Royalties Inc.

Good morning, ladies and gentlemen, and welcome to the ASCISCO Gold Royalties Q2 2024 Results Conference Call. After the presentation, we will conduct a question and answer session. If you would like to ask a question during this time, please press star 1 on your telephone keypad. Please note that this call is being recorded today, August 7, 2024, at 10 a.m. Eastern Time. Today on the call, we have Mr. Jason Etupoza and Chief Executive Officer. and Mr. Frédéric Ruel, Chief Financial Officer and Vice President of Finance. I would now like to turn the meeting over to our host for today's call, Mr. Jason O'Toole. Bonjour, Mesdames et Messieurs, et bienvenue à l'appel conférence des résultats du deuxième trimestre de l'année 2024 de Redevance Horifère à Susco Limité. Après la présentation, nous procéderons à une séance de questions et réponses. Si vous désirez poser une question, veuillez appuyer sur la touche étoile suivie du numéro 1. Veuillez prendre note que cet appel est enregistré aujourd'hui le 7 août, 24 h à 10 h, l'heure de l'Est. Nous avons sur l'appel d'aujourd'hui M. Jason Attu, président et chef de la direction, et M. Frédéric Ruel, chef de la direction financière et vice-président finance. J'aimerais maintenant céder la parole à votre hôte, M. Jason Attu.

Thank you, Joelle. Good morning, everybody, and thanks for being on today's call on this beautiful summer's day. I'm Jason Attu, President and CEO of the Cisco Gold Royalty. Procedurally, I'll run through the presentation, and then we'll subsequently open up the line for questions. For those participating online via the webcast, you can submit your questions in advance through the webcast platform. Today's presentation will also be available and downloadable online through our corporate website. Please note that there are forward-looking statements in this presentation for which actual results may differ. Also, please note the basis of presentation will be in Canadian dollars unless otherwise noted. I'm joined on the call this morning by Fred Ruel, the company's VP Finance and Chief Financial Officer, amongst the others as indicated on slide three. When looking at ASISCO's second quarter and first six months of 2024, we've had a solid first half as it relates to gold equivalent ounces earned, cash margin, cash flows, as well as overall debt reduction. Cisco earned 20,068 gold equivalent ounces in the second quarter of 2024, which had put us in a good position on June 30th to achieve our previously published full-year guidance of 82,000 to 92,000 geos. Revenues for the period were strong in Q2 at $64.8 million, buttressed mainly by improving precious metal prices throughout the period. In addition, Cisco's cash margins remained high at 97% during the quarter. Cisco ended the first quarter with $65.7 million in cash, and net debt has now been reduced to just over $40 million after the company continued to pay down its revolving credit facility during the period. So far in Q3, the company has repaid an additional $13.8 million on the facility, further increasing their financial flexibility in order to be able to transact new accretive opportunities as they present themselves. With respect to our ongoing commitment to return capital to shareholders, the company declared and paid its quarterly dividend of $0.065 per share in Q2, marking its 39th consecutive dividend with over $290 million returned to shareholders to date from these distributions. Subsequent to the quarter, Cisco's Board of Directors approved a Q3 dividend of $6.5 per common share, payable on October 15, 2024, to shareholders of record as of the close of business on September 20. With respect to our opportunity set, the company's pipeline continues to remain robust. with our corporate development team busier than they have ever been, we remain optimistic that we'll get at least one meaningful deal across the line this year, over and above our recently announced Cascavel Gold Stream. Moving on to the company's financial performance for Q2, quarterly revenues effectively track higher year over year due to strong commodity prices when comparing to Q2 of 2023. which is also partially offset by fewer GEOs versus the same period last year. The net loss of $0.11 per basic common share for the period was due entirely to our decision to take a full non-cash impairment charge of $67.8 million, or $49.9 million net of income taxes, on the Eagle NSR Royalty, based on our own internal assessment of the current facts and circumstances. And of course, as more information continues to surface, especially as it relates to timelines associated with a potential restart of the operation and resumption of precious metal deliveries to a Cisco under its royalty agreement, a reassessment of the recoverable amount of the ego royalty will be performed at that time, which may lead to a reversal of part or all of the impairment loss that has been recognized. Most importantly, Q2 2024 saw a year-over-year improvement in both cash flow per share at $0.28 versus $0.26 last year, as well as quarterly adjusted earnings of $0.18 per basic common share versus $0.15 in the comparative quarter of 2023. During the second quarter of 2024, the company had 20 producing assets, including the Eagle Mine. which was producing up until the suspension of operations on June 24, 2024. Our geos earned come predominantly from Canada, and we derived over 98% of our geos from precious metals, gold at just under 71%, and silver at 28%, with the remainder coming from other metals. Some comments on some specific mine performances during the quarter before speaking about a couple of our more material assets in greater detail. Canadian Malartic had yet another extremely impressive first half of 2024, with Ignico booking strong quarterly production from the mine in the second quarter. The asset remains ASISCO's most significant contributor to GEOs earned by a solid margin. Performance for Victoria Gold's Eagle line during the second quarter of 2024 fell significantly short of our budgeted expectations, to the tune of about 33%. In other words, even prior to the heat leach facility failure on June 24th, Eagle was already underperforming through the first half of the year. It is our understanding that Victoria Gold will be reporting its Q2 2024 on August 8th, So in the absence of additional information, it is our assumption that the mine will not provide us any geo-deliveries in 2024. At Capstone's Mantos Blancos operation, Q2 production was lower year over year due to lower grades and recoveries. Plant upgrades to reach 20,000 ton per day on a sustainable basis are progressing, despite an approximate two-month delay relative to Capstone's prior plan, due to longer equipment lead times. Cisco expects to see the benefit of the increased throughput in its silver deliveries starting in the beginning of 2025. As I mentioned earlier, the number of currently producing assets in our portfolio stands at 20. Changes to the list include the removal of Eagle, partially offset by the addition of G-Mining Ventures' Tocantinsino mine in Brazil, which announced its first gold pour in early July, as well as Agnico Eagle's Acasaba West satellite operation at its Goldex mine. On the latter, Cisco received its first payment from Agnico in July, whereas on Tocantinsino, first payment from G-Mining is expected in November, based on a two-month lag associated with the royalty payments as structured in the contract. This current list of 20 assets also counts CSA as only one single operating asset. However, as you all know, we have two instruments associated with the mine, 100% silver stream, in addition to our now economically effective copper stream, with the copper stream having provided its first deliveries to Cisco in early July of this year. Moving on to slide eight. Our company continues to distinguish itself from the rest of its relevant peers as it relates to jurisdictional exposure. Cisco is the leader when it comes to both NAV and GEOs earned from what Cisco defines as Tier 1 mining jurisdictions, which include Canada, the United States, and Australia. Of note is that if we were to add Chile to that list of countries, we'd be at over 95%. This brings me to slide 9, which provides highlights on the recently announced Cascabel Gold Stream transaction with SoGold in partnership with Franklin, Nevada. As noted in her July 15th press release, Cisco believes that Cascabel is a world-class copper-gold project that has the potential to become a multi-generational mine. This new stream investment, which complements Cisco's existing royalty on Cascabel, further enhances Cisco's peer-leading growth profile. at a very attractive rate of return. In terms of when we expect to receive GEOs from this investment, SolGold has guided to production in the 2030s, which falls outside our five-year outlook. However, once in production, the Castable Stream is expected to contribute approximately 23,000 gold equivalent ounces per year for the first 10 years of the initial 28-year life of mine. It should be additionally pointed out that this mine life is based on only 18% of the measured and indicated mineral resource of the Alpala deposit. We are very encouraged to see that Sogold recently signed an exploitation contract with the government of Ecuador. This served as another indicator that the current administration is pro-mining and Cascavel remains a top priority project within the country. As noted previously, on a GEOS earned basis, it was yet another stellar first half of the year for our most important asset, as impressive progress continues to be made on the Odyssey Underground project. While I won't spend too much time on the following two slides, I wanted to flag some language on slide 11. As evidenced by a second quarter report and subsequent conference call, Agnico Eagle continues to talk more and more comfortably but the potential for a future shaft number two for the Odyssey underground mine. Factoring in some basic assumptions and based on publicly released information from IGNICO, ASISCO estimates that a potential second shaft could add approximately 15,000 gold equivalent ounces to ASISCO gold royalties annually, over and above what is expected from the most recently published mine plan. all from the early 2030s onwards, and at no additional cost to ASISCO or shareholders. With 40,000 tons of Latin mill capacity still expected in the Canadian Malartic Complex from 2028 onwards, IGNICO has now officially made reference to a fill-the-mill strategy, with additional information on this likely to follow in the coming years. Next slide, please, slide 12. And as if the malarctic story for Cisco wasn't exciting enough, just last week, Agnico Eagle provided a comprehensive update on its Upper Beaver project in Ontario. Our operating partner announced a positive internal valuation for a stand-alone mine and mill scenario at the project. Agnico Eagle believes that Upper Beaver has the potential to produce an annual average of approximately 210,000 gold ounces and 36,000 3,600 tons of copper, with initial production possible as early as 2030. What does this mean for Cisco? Again, based on the information provided, we estimate that Upper Beaver could result in an average of approximately 4,500 gold equivalent ounces earned based on our 2% NSR royalty on the project. We were also delighted to hear that IGNICO has now committed US$200 million over the next three years to further de-risk the project and collect the necessary bulk samples prior to final project approval. Now on slide 13, and touching briefly on CSA, first delivery under the CSA copper stream to Cisco was made in the first week of July for a total of 74 tons of copper or approximately 300 geos. Further to this, just last week, Metals Acquisition Limited announced some very impressive drill results, which served to underpin the Cisco's original thesis that significant exploration potential exists across their land package. Moving on to slide 14. As you all know, and as I stated earlier, On June 24th, Victoria Gold announced that the Heat Leach facility and its Eagle Gold mine in the Yukon Territory had experienced a failure. Production remained suspended and as stated previously, absent new information, Cisco's assumption is the mine will not resume production in 2024. Cisco has now taken the appropriately conservative step to recognize a full non-cash impairment loss of $67.8 million $49.9 million net of income taxes, based on our management team's assessment of the current facts and circumstances. If there is any key takeaway from this slide, it's that ASISCO has various protections with respect to its royalty, including security over the property, registered interest and land reported within the Yukon Territory, and an inter-creditor agreement with the Senior Lending Syndicate. At this time, these various layers of protection provide a Cisco with confidence that our rights will continue upon a restart of the Eagle Mine. As a secured creditor, we will continue to monitor the situation closely and provide further updates to the market as warranted. Prior to the heat bleach facility failure at Victoria Gold's Eagle Mine, Cisco was tracking well with regard to its previously published 2024 geo delivery guidance range of 82,000 to 92,000 gold equivalent ounces. However, under our assumption that production at Eagle will remain suspended through to the end of 2024, the company has decided to adjust its 2024 geo delivery guidance 77,000 to 83,000 gold equivalent ounces. I have already provided additional context on this call as it relates to Eagle's underperformance. versus our budget expectations for the first half of the year, and this should also help further explain why we made this adjustment. Additionally, with surge capacity equipment at Capstone's Mentos Blancos having been installed two months later than originally scheduled, we took a further step in making some cautionary adjustments to our budget as it relates to the second half deliveries we are expecting from Capstone Copper. Our investee companies continue to make great strides in de-risking their assets that will accrue to our shareholders. Highlights of some of these efforts are provided on slides 16 and 17. We've already discussed many of these already on previous slides of this presentation, so no need for me to add anything here today. That said, I would still suggest you take the time to go through the impressive list yourself. And if you have any questions or would like to further discuss any of the remaining line items highlighted on these two pages, I encourage you to reach out to my colleagues here at ASISCO for more information. Moving to slide 18, which outlines the current state of ASISCO's balance sheet. At quarter end, we had a total debt of just under $110 million, net debt of only $43 million. which compares the net debt of just under $250 million in the comparative quarter of 2023. Our focus on being responsible capital allocators is using our cash flow from operating activities and redeploying it in the form of paying down our revolving debt facility, which year-to-date is over $101 million, $87.8 million in Q1 and Q2, and $13.8 million subsequent to quarter ends. Also subsequent to quarter ends, we made a U.S. $10 million payment to Soho as a first installment under the Gold Stream Agreement to further advance the Cascavel project in Ecuador. In addition, as mentioned in last quarter's conference call, the commodity prices, specifically gold and silver, remain above the U.S. $2,400 and U.S. $27 respectively. we forecast to end up in a net cash position by the end of the year. That, of course, is absent of any material acquisitions of royalties or streams we make during that period. This is important as, even though we've already made an announcement on a key transaction regarding Cascabel, Cisco's corporate development team remains busier than ever. With the hope of getting more deals across the line before year-end, and our much-improved balance sheet provides a company with the financial capacity and flexibility to continue its strategy of disciplined allocation in the pursuit of high-quality, free of precious metals, streams, and royalties that will bolster the company's current and near-term gold-equivalent ounce deliveries and cash flows that should accrue to our shareholders' benefit. Finally, I would like to take the opportunity to welcome our newest board member, Ms. Wendy Louie. who we believe will be a tremendous contributor to our company go forward. Wendy brings a wealth of experience in resources and commercial and accounting matters from her impressive career credentials from Duke Energy, Ernst & Young, Hecla, Goldcorp, and most recently, Sabina. And with that, I'd like to thank everyone for listening today. We will now open up the line for questions, as well as questions posted on the webcast. We don't get to all the questions on the line. We'll make sure to respond offline to those we don't get to cover on this webcast. Thank you for your time. Operator?

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 prompt that your hand has been raised. If you wish to decline from the polling process, please press 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 Ralph with a capital. Your line is now open.

Thanks operator and thanks for taking my questions. The syndication at Cascabel at 30%, was there a desire to do more? How much of that sort of discretion was driven by the desire for things like dry powder or balancing country exposure? Just wondering how you tackled some of those thresholds and criteria.

Yeah, thanks for the question, Ralph. Look, obviously, doing a syndicated deal with a partner like Franco Nevada, a lot of people, including myself, going back to my banking days, has talked about having syndicated deals and why they make the most amount of sense. So, look, the 30% level, we can tell you, was a negotiated level. We do think the Cascavel project is a world-class asset. In fact, it is also, as you know, Franco Nevada has a royalty as we do, a higher royalty than we do, and so it really came down to proportional interest both in the royalty as well as in our interest in working with Franco to give the Sobel team the amount of proceeds that they were looking for, obviously $750 million, which the bulk of it will be provided to them on the construction decision by either themselves or if they are not the operator at the time, whoever is operating at the time. So, look, obviously it was a negotiation. We've got a relationship clearly with Soho. We've got a relationship with Franco. We're quite comfortable with Ecuador as a jurisdiction. The fact is that, as you know, the way that the deal was structured with Franco was is we have a number of off-ramps here. So if the country, which we do believe is very pro-mining with President Navarro right now, and we do think he likely will be quite successful in the elections in 2025, but for whatever reason that does not happen and we see Ecuador not being as good as a jurisdiction for mining the development of Castabel, we have a number of off-ramps, as you're very well aware. That's how we've staged and structured the transactions So right now, we're obviously quite comfortable with the direction. We're very pro-mining in the particular province. We think Snowgold is doing a very good job in terms of ensuring they have a social license and doing all the right things from a community level. But as I said, we still very much value our, as I keep saying, our tier one jurisdictions. So we're actually looking to do more transactions that will actually have a bit more of a balance in Canada, the U.S., and Australia go forward. But we're very, very pleased with the transaction that we were able to do with SoulGold and obviously the partnership that we have with Franco.

Yeah, I appreciate that clarity. It does make sense. Keeping on the theme of transactions, you mentioned that Cascabel in the 2030s puts it beyond the five-year guidance. Just wondering if you look at sort of this deal pipeline that you had talked about before your rent and perhaps beyond, are you at liberty to talk about how much of those opportunities are within the five-year guidance or is the majority outside of it?

That's a great question, Ralph. Look, obviously there are a lot of opportunities and every one of our peers, as you've probably heard, are very, very busy from corporate development and the technical services that they basically employ to go look at these opportunities. I would say that, again, our preference in terms of our strategy is obviously have transactions that fit within our five-year outlook. That said, there are some very quality assets development assets in particular, that there's a long gestation to actually get into production and ramp up that would sit outside of it. But strategically, what I've talked to my board with and what the corporate development team is doing, really the focus is doing transactions within that five-year outlook, but we're not going to ignore, again, a high-quality opportunity that sits outside the five-year outlook, because that obviously sets the company up for the future to go forward. But we're very, very busy, and so As I mentioned on the call, we're hoping we can get one of these opportunities done before year-end that would fit within the five-year outlook.

Great. Thank you, Jason. Thank you. Thanks, Ralph.

Your next question comes from Josh Wilson with RBC Capital Markets. Your line is now open.

Yeah, thanks very much. First question I have is on The Eagle impairment to zero. I'm wondering, is there any read through here on the potential recoverability of any value to the company? And is there any risk that the royalty would not survive a solvency related event for the operator?

Yeah, look, obviously, and I'll let Fred comment in a second. Obviously, we took the decision. Specifically because we just don't have the visibility right now as to when a restart is going to happen. There's obviously a lot of work that Victoria Gold Team is doing specifically around containment, specifically around the water quality with respect to the cyanide sampling that they're doing, and specifically with respect to the remediation. Any sort of restart obviously will require a permit. the UN government pluses that even appreciate there's an element with respect to the First Nations groups that they will have to get an approval and get a social license there. We thought it was prudent at this point to write down, you know, the $67 million that I mentioned and change that I mentioned just because we don't have that visibility as of yet. We do think, obviously, you know, it's a big resource out there, very important for the Yukon territory in terms of employment and other things that, you know, depending on the situation, that there is a strong possibility that the mine is up and running in a reset. We just don't have visibility as of yet. With respect to the question in an insolvency situation, I think, as I mentioned on the The fact that, again, we've got security with the asset, the fact that we're registered in the Yukon, as well as we've got strong inter-predator support within those agreements, we think there's obviously a very strong case when this is up and going, if it goes through insolvency, that, again, our rights will be affected. Our rights and the royalty and the geographical equivalence deliveries if it does take some time here, that again, we certainly have all the protections necessary. Maybe I'll ask Fred if he wants to comment further.

No, thank you, Josh, for the question. It's purely related to accounting and applying accounting rules and regulations here based on information that we have as of today. And depending on how things go in the future months and quarters, we'll re-access on a quarterly basis if a reversal of impairment might be possible based on new information that might be provided by the company.

Go ahead. Thank you. And then extending... this sort of uncertainty to what the future impact could be. I understand the company updated 2024 guidance. There was no comment on what the long-term guidance implications are. Is there any sensitivity you can provide us with, you know, what the impact is of the loss of Eagle to the five-year guidance?

Yeah, that's a great question. We've also received a question via webcast similarly. I think, obviously, Josh, it's early days. Obviously, the facility failed on June 24th. Victoria is doing everything we can to essentially, again, contain what's happened, ensure that from an environment perspective, there's no long-term damage to So I think it's certainly in the early innings of what's going to happen here. As stated before, we just don't have the visibility on the restart plan. According to Victoria, and I encourage you to listen to their call this week, there are a number of weeks away from being able to provide a concrete plan that could or could not get regulatory approval and that's a social license that I talked about. There's lots of work to be done in the remediation in front. I just think it's too early at this point to suggest that would come out of our five-year outlook. We do think that obviously they've got significant goals that they've proved out through the various indications mineral reserves and resources. There is also, if you know the story reasonably well, they have identified secondary heat leach facilities that are going to come in later in the mine life. So there's a lot of positive attributes that could suggest that this mine will be restarted. We just have no concept for visibility, clarity, direction at this point as to the timing.

Really, we can only get that from taking their direction.

Sorry, one final question on the long-term guide. I can't recall if this was included or not, but for ODEV and their financial status, was Caribou included in the existing five-year guidance or was that something that was incorporated after that period?

Great question. It was not included in our five-year outlook.

Got it. Thank you.

Your next question comes from John . Your line is now open.

Thank you.

Sometimes the big royalty streaming companies say the first dollar is the last. Jason, could you give us your views of the pros and cons of that? Before you came on board, Cisco had a lot of efforts trying to fix Renard Diamonds and and Armenia and the different things in ODV. And would you contribute good money after bad? When something blows up, would you fire the guy that originated the deal? Just what's your attitude toward trying to fix things or when to move on?

Look, John, obviously, I think you probably, you know, talking through some of the issues now obviously heightened with the Victoria Gold facility failure. Obviously, the team works very, very hard to identify opportunities that we think will accrue to shareholders. We didn't anticipate this happening, and there's obviously been some other assets that haven't proven up to, again, expectations. With respect to going forward, I mean, we've got a very, very strong technical team. We've upgraded our technical team since I joined. And so we are going to be making investments go forward. We're going to be making investments based on, again, the information that we have that we think is going to be a creative to shareholders go forward. In terms of looking at some of the historical legacy assets, yes, we did a full portfolio review. Yes, we've come to views as to which ones we should fund and which ones we should not fund go forward. I think I've conveyed that, you know, the opportunities that on new opportunities far outweighs the opportunities that we see currently in terms of investing in the current portfolio that require additional capital. A lot of our portfolio, the 185 assets, as you know, require no additional costs. There's no contingent costs associated with it. Our preference for all the companies out there, if we've made an investment through a royalty or a stream, is they should be going out and sourcing other financing and not relying on an incremental royalty or stream that could burden the asset to the point where, again, their set of equity holders, if they're public, is disadvantaged. So I'll answer that question long-winded way, but we do think that there's a really good opportunity set on a case-by-case basis. We have additionally, from a governance perspective, set up, as I think we've talked about, an investment committee, which is some commercial and technical folks on our board that we have to obviously pass that gate before we are allowed to and deploy any further capital. So there's an additional level of governance with respect to, again, our investments into assets at a Cisco Gold Royalties.

Jason, if I could follow up. There's a hedge funder too, a friend of mine, that whenever someone in the team originates an idea, They give them a quarter of the performance fee from that idea. And the idea is tagged to a specific person. Do you think having a bunch of committees dilutes responsibility? And is it better, what are the pros and cons of committee responsibility versus originator responsibility on your team?

So the way it ends to that, John, is the committee is really set up for oversight, from an oversight perspective. Plus, as you can appreciate, we've got technical folks that can really pull apart or take a look through a lens that maybe some of our technical folks haven't looked at. But really to assure us, because again, we are, as I like to say, we're effectively pricing risk for our shareholders. We're risk managers on behalf of our shareholders. With respect to compensation as it relates to origination of opportunities, I can say we don't have that philosophy here at Asisco. As I've talked through with yourself and many others, we have tweaked our compensation for the senior executives, which is really in the long-term incentive pay, very much driven by per share metrics, specifically cash flow per share metrics. growth in cash flow per share and growth in net asset value per share. So as we move forward and we continue to make investments, we are hoping we're making investments that increase our cash flow per share, increase our NAV per share, because as you know, there's a very strong correlation, if we can do this, to shareholder performance. So to answer the question, there is no specific origination fees that are payable for our team. We are very much a team, and we're very much driven and top of mind for anything that we do from an investment perspective is will this increase our cash flow per share as well as our net asset value share. And, again, these are quantitative metrics that our committee will determine when they're compensating the executive team.

I'll let other people have a chance. Good luck, Jason.

Thanks, John.

Your next question comes from Tanya Jakuskonek with Scotiabank. Your line is now open. Okay, great.

Thank you so much for taking my questions. Good morning, everybody. Just wanted to circle back on that 2028 guidance and not to beat, you know, this to death, but would it be fair to have assumed that within that 120,000 to 135,000 GEOs at about 9,000 would have been equal gold, and we'd more likely be towards the lower end of the range than the upper, just so that we can benchmark ourselves.

So it's a great question, Tanya, and thanks for participating this morning. So, yes, 9,000 was approximately what we were budgeting. Again, you can get it from Victoria Gold's, obviously, production guides for 2024 per year. And so if you actually forecast that forward, it would be somewhere around that number. All that said, though, as I mentioned, we give our five-year outlook and our five-year guidance in February. I think it's far too early at this stage. Information is still coming in, specifically with that asset, to know whether or not almost four and a half years out, whether it be contributions from the Eagle Mine in particular. And so we haven't changed our five-year outlook. We just don't have the information to make that adjustment. And if we do get that information, obviously we'll let the market know. But very likely in February when we put out our annual guidance for 2025 as well as their updated five-year outlook.

Okay, fair enough. Maybe just moving off then on to just to finish off on the transaction front. I know the last conference call you, had talked about one or two meaningful transactions. And now, Jason, you mentioned that there's one more meaningful for 2024 you hope to get done by year-end. Are we still talking that $50 million to $300 million range? And are we still talking a syndicated transaction, or are you still looking at just the extreme deals?

Great question, Danny. Look, I think we have, just on the syndication front, we have a very good blueprint now of what we can do as a Cisco Gold Royalties, working with partners like Franco and some of the other senior royalty and stream players. So, yes, I'm still a big believer in syndicated deals. Yes, we are looking at large, chunky acquisitions in the magnitude that you've mentioned. We are also looking at obviously some smaller ones that we do think will be accretive to our shareholders go forward. Nothing is guaranteed, obviously. The team is working very hard to close some of the business issues that we may have on, again, a very important, meaningful transaction that will really set the company up to go forward. But yes, we are looking at transactions anywhere from US 50 million all the way up to 300 million US dollars. And some of them syndicated and some not.

Okay. That's helpful. And that just comes to my next question with respect to, I mean, if this is the case and we're looking for this sort of size deal coming towards the end of the year, Can I assume, like, you know, we're getting this debt down quite quickly. Can I assume then return to shareholders capital allocation? You know, we had thought perhaps, you know, looking at maybe, you know, share buybacks. Would that be out of your range in terms of being able to also take that on in addition to a larger deal?

So, look, I think we've got ourselves to a position, as I mentioned in the call, where we have tremendous financial flexibility and capability now that we've got our net debt down to approximately $40 million. We've got a net cash position very, very soon here. And so we obviously go through the capital allocation decision tree that you're quite familiar with. We do, if you're aware, have regulatory approval on a normal course issuer bid for buyback. We view that as a tool, though, Tanya. Obviously, our preference is to redeploy our capital into meaningful, accretive transactions. However, again, if we can't get things complete or if we get things complete that are cash flowing, that does give us... you know, the comfort that we should be essentially lowering our share count really also is predicated on our share price at the time. Not surprisingly, you're going to hear that management myself think we're undervalued. And I know your research suggests in terms of our peers as well. So it is a tool that we certainly are contemplating using. And we're really trying to be opportunistic around, again, if we do see some pressure with respect to our stock price in the following months and moving into the year end, understanding that we have some capital we may deploy right into projects and deals that I talked about earlier.

Okay. So would you have a preference then if you had to? accept capital then for dividend or would you prefer, I know it's share dependent, but allocation to share by that?

So I think that's the discussion that we continue to have both management and board. I think they both have very good uses. As you know, we increased our dividend by 8% this year. We want to Again, seeing the predictability, consistency of your business. A lot of it is underpinned by the commodity price in particular. Do you think the dividends are a meaningful way to return capital to shareholders? But in the same sense, as I said, we want to be opportunistic for we, the company, to see our share price not being reflected or a fundamental value. We will certainly be looking to use the buyback process.

Okay.

And then just my final question is just on benchmarking myself. When I looked at Casavel and I took into account the sole goals, you know, study, so based on their study, and I think we looked at it in a $1,900 goal price environment or thereabouts, an internal rate of 6% to 7%. Is that a fair return in terms of what you would have seen?

Look, I think there's a lot of moving pieces here. Based on the pre-feasibility study that Sogo put out, we would say that the return for our shareholders at that price is high single digits. And obviously, anything beyond those commodity prices is more incremental. There are a number of components to the deal, as you're aware, around the condition precedence in terms of funding. There's obviously, as you're aware, buyback rights for the operator in the first three years, the buyback rate, lesser amount, 33%, it's within five years that give us a guaranteed rate of return. So there's a few nuances, Tanya, that depending on what happens in Ecuador with Cascabel and who is actually building and operating the mine at the time will impact the return.

Okay, well, we could take that offline. Thank you so much for taking my questions.

Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from Brian MacArthur with Raymond James. Your line is now open.

Good morning, and thank you for taking my question. Jason, I just want to go back to the security on Eagle, and I appreciate there's a lot of moving parts and you don't have all the information. But when you say you have an inter-creditor agreement and security over the property, is that very past due with the senior lending syndicate? I'm just trying to figure out, you know, this may come down to relative negotiating power to the extent you can or are willing to comment on that.

Yeah, look, Brian, thank you for that question. Unfortunately, the inter-creditor is not a public document at this point, so all I can say is we feel very, very confident in our protections through that agreement. And as I said earlier, we have security over the property. We have a registered interest in land recording with the Yukon Territory. If the company does go through a CCAA process, we're quite confident that our rights will continue in any sort of restart of the legal mind. And so we are a secured creditor, but the specifics, unfortunately, because it's a confidential document, I can't give you all the details around the inter-creditor, but we've got the appropriate protections.

Fair enough. Thanks very much. That still helps with the caller. Thank you.

There are no further questions at this time. I will now turn the call over to management for closing remarks.

Thank you very much for joining us this morning. With respect to some of the questions that have come in the webcast, we will answer them offline, so thank you for your participation in that regard. And I hope everyone has a very good week. Thank you for your time this morning.

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