OR Royalties Inc.

Good morning, ladies and gentlemen, and welcome to the Yale Cisco Gold Royalties Q1 2025 Results 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 one on your telephone keypad. Please note that this call is being recorded today, May 8, 2025 at 10 a.m. Eastern Time. I would now like to turn the meeting over to our host for today's call, Mr. Jason Attu. Bonjour Mesdames et Messieurs et bienvenue à l'appel conférence des résultats du premier trimestre de 2025 de redevances aurifières Osisko Limited. 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 8 mai 2025, à 10 h, hors de l'Est. I would now like to hand over to your host, Mr. Jason Atul.

Thank you, Joelle. Good day to everyone, and thanks for your attention this morning. As we know, it's a busy reporting week. Procedurally, I'll run through the presentation, and then we will 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 from which actual results may differ. And as a reminder, as of Q4 2024 onwards, Cisco has made a key change to its presentation currency, which is now strictly in US dollars, unless we otherwise note. I am joined on the call today by Frederic Ruel, the company's Vice President of Finance and Chief Financial Officer, as well as Heather Taylor, our VP Sustainability and Communications, as well as my other colleagues, as indicated on slide three. When looking at Ascisco's first quarter of 2025, we've had a solid start as it relates to gold equivalent ounces earned, cash margin, cash flows, as well as overall debt reduction. Cisco earned 19,014 geos in the first quarter, which puts us on track to achieve our previously published full year 2025 geo delivery guidance range of 80,000 to 88,000 gold equivalent ounces. Recall that we had been very explicit about the fact that due to sequencing and some of our major producing assets, including the Malartic and Mantos Blancos, the first quarter was always expected to be our weakest of the year, with sequential quarter-over-quarter improvements in aggregate geo-deliveries expected for the rest of the year. The Cisco's operating cash flows for the period came in at an impressive $46.1 million at a cash margin of 97.1% during the period. And while our corporate development team remains busier than ever, and in some cases on some really sizable transactions, We didn't announce anything major during the period. However, we did complete a handful of smaller transactions, which we believe over the course of time will be viewed as astute transactions with operating partners we know and trust. Cisco ended the first quarter with $63.1 million in cash and net debt has now been reduced to just over $10 million after the company continued to pay down its revolving credit facility during the period. With respect to our ongoing commitment to return capital to shareholders, the company declared and paid its quarterly dividend of Canadian $0.065 per share in the first quarter, making its 42nd consecutive dividend with over Canadian $328 million returned to shareholders to date from these historic distributions. Subsequent to quarter end, Cisco's Board of Directors approved a 20% increase the base quarterly dividend to U.S. dollar 5.5 cents per common share payable on July 15, 2025 to shareholders of record as of the close of business on June 30, 2025. The change to U.S. dollar-based dividend is consistent with the company's recent change in its presentation currency. The dividend increase itself is a testament of the confidence we have in the consistency, predictability, and the anticipated growth current and future cash flows underpinning our business. Finally, as some of you know, in mid-April, ASISCO published its fifth edition of a sustainability report, Growing Responsibly. And I'd like to bring on Heather Taylor, our VP of Sustainability and Communications, to talk to some of the details associated with this key achievement in more detail. Heather?

Thanks, Jason. As Jason mentioned, following the end of the first quarter, OSISCO released the fifth edition of our annual sustainability report, Growing Responsibly. This latest edition reaffirms our focus on transparency and the ongoing evolution of our sustainability approach and efforts. It is informed by GRI, SASB, and IFRS climate-related disclosure standards. This year, we made meaningful progress across all pillars of ESG, including some of the following key highlights. On the environmental front, we implemented our 2024 to 2027 climate strategy and completed our first CDP climate disclosure in the small-medium enterprise category. We also took action to offset emissions linked to our offices and employee travel by purchasing and retiring verified carbon credits. On the social side, we contributed over $360,000 to community initiatives, introduced a donation matching program for employees, and earned our certification as a great place to work. And in governance, we took a closer look at what matters most to our stakeholders by refreshing our materiality assessment and adopting a double materiality approach inspired by the evolving European CSRD framework. We embedded ESG-related considerations formally into advanced stage due diligence and maintained leading positions with ESG rating agencies, AA from MSCI, prime from ISS, and industry and regional top rated by Sustainalytics. As always, our aim is to ensure long-term value creation goes hand in hand with strong governance, community support, and environmental stewardship. I encourage you all to take a look through the report, which is available on our website. Please don't hesitate to reach out if you would like to discuss any of the covered aspects in greater detail. And with that, I'll pass it back to Jason.

Thanks so much, Heather. Now moving on to the company's financial performance for quarter one. Quarterly revenues of $54.9 million tracked higher versus the same period last year, largely thanks to increased commodity prices. Earnings of $0.14 per basic common share for the period also marked a significant year-over-year improvement. Most importantly, Q1 2025 saw a year-over-year improvement in both cash flow per share at $0.25 versus $0.20 in Q1 last year, as well as quarterly adjusted earnings of $0.16 per basic common share, again, versus $0.12 in Q1 of 2024. During the first quarter of 2025, our GEOs earned came predominantly from Canada. and we derived over 93% of our gold equivalent ounces from precious metals. Gold at just under 67% and silver at just over 26%. The balance came from copper and almost entirely associated with the Cisco's copper stream at Matt Copper's CSA mine. Some comments on specific mine performances during the quarter before speaking about a couple of more material assets in greater detail. Canadian Malartic had a very good quarter, especially when considering the asset outperformed versus our own internal forecast, given the work on site associated with in-pit tailings disposal was completed faster than anticipated. That said, Canadian Mark Malartic's first quarter is still expected to be the weakest quarter of the year, as telegraphed previously by operating partner Ignico Eagle. At Capstone Copper's Mantos Blancos operation, Q1 production was slightly lower year over year, largely due to lower silver grades at the front of the year, as we'd previously flagged on our previous conference call in mid-February. We are once again pleased to report that the throughput levels remained at nameplate capacity of 20,000 tons per day, and that the anticipation is now that the silver grades trend back upwards for the remainder of the year. Finally, the handover at Newmont to Dilmar at Eleanor has been quite seamless, at least as it relates to ASISCO's gold equivalent ounces earned in Q1 2025, which actually saw a bump over the same period last year. Congratulations to Dilmar on his acquisition, and we very much look forward to working along with them as a partner in the James Bayne region and at Eleanor for many more years to come. Moving to slide 8, and as I mentioned earlier, the number of currently producing assets in our portfolio stands at 22. Diving a little bit deeper into that number, we are happy to announce that subsequent to quarter end, ASISCO received its first royalty payment from Talisker Resources, with mining now having commenced at Bralorn, over which ASISCO has a 1.7% NSR royalty. Further to this, And touching briefly on Ndimi, the asset is currently in what the controlling parent, Shengdeng Gold, defines as trial production, ahead of the ramp up to steady state later this year. As we previously noted, and based on the current trajectory of the asset, Ascisco still expects to start receiving its first meaningful royalty payments from the asset in the second half of this year. Moving to slide nine, our company continues to distinguish itself from the rest of its relevant peers in two key areas. First, as it relates to jurisdictional exposure. And second, ASISCO's peer-leading cash margin. Starting with the former, just a friendly reminder that ASISCO is the leader when it comes to both NAV and GEOs earned from what we define as Tier 1 mining jurisdictions, which include Canada, the United States, and Australia. Moving to the latter, ASISCO shareholders can remain confident that the company's exposure to current high precious metal prices provides them with both transparent leverage as well as potential downside protection. Switching gears to slide 10 and focusing on our cornerstone asset, the Canadian Malartic Complex was a key source of news in Agnico Eagle's Q1 2025 results announced a couple of weeks ago. As it relates to operations during the period, gold production was solid with higher grade source from the Barnett pit were partially offset by a lower volume of tons milled. As previously noted, in-pit tailings deposition resumed in March of 2025 and is expected to ramp up to its design capacity in the second quarter of this year. As such, this work is no longer expected to serve any kind of impediment to production for the remainder of 2025. On the development front in the first quarter of 2025, ramp development reached the bottom of the first mining horizon at East Gouldie. Evacuation of the mid-shaft loading station between levels 102 and 114 commenced and the temporary service hoist was commissioned. Both the ramp and the shaft remain on schedule. Exploration drilling continued to extend the East Gouldie deposit to the east and extend the newly discovered sub-parallel eclipse zone. IGNICO also completed the acquisition of O3 mining in the first quarter. Additional funding of $5.5 million has been allocated for a first phase of exploration in 2025 that will include 24,000 meters of drilling at the Marvin deposit, over which Cisco has a patchwork of NSR royalties. and which is located immediately northeast of the Canadian Malartic property. Moving to slide 11, it's worth reminding everybody that in recent public forums, IGNICO continues to be vocal about the potential for a future second shaft at Odyssey Underground, which would serve as the key component to being able to drive eventual annual production from the complex to one million ounces. At the same time, it is our understanding that as exploration and engineering work remains ongoing to eventually achieve these goals, it is likely that the next major update on these two fronts will come in the second half of 2026. In the meantime, we'll all continue to watch in amazement as the underground, and notably East Gouldie, continues to expand in size. On to slide 12, which touches on Dalgaranga. a high-grade underground gold asset for which Cisco acquired a 1.8% gross revenue royalty towards the end of last year. On March 17th, Spartan Resources, along with Romelius Resources, a mid-tier Australian-listed Western Australian gold producer, announced that the two companies had entered into a binding transaction implementation deed, under which it was proposed that Romelius will acquire all of the issued ordinary shares of Spartan that it did not already own. As you can see on the slide, this is a smart combination of complementary and proximate assets with significant work already undertaken to optimize the synergies between Romilius' Mount Magnet mine and its operating checkers mill and Spartan's Della Garanga and Yalgu projects. The scheme of arrangement is expected to close in July of this year. For Cisco and its shareholders, what's really exciting about the situation is that both management teams have pointed to the fact that the underground development at Dalgaranga is already underway and that the high-grade resource at the Never Never deposit could be processed through Ramillius' checkers mills prior to the end of 2025. And for context, This is a full year ahead of what we had originally anticipated. Moving to ASISCO development's caribou project in northern British Columbia on slide 13. It's half a world away from Dalgaranga. Our partner released the results of its optimized feasibility study just over a week ago. This feasibility study included an average annual production of approximately 190,000 ounces of gold over a 10-year life of mine, 202,000 ounces in the first five years, with the potential for first gold in the second half of 2027, assuming construction commences in Q3 of 2025. Recall that this project is fully permitted and effectively shovel-ready, meaning that the required hurdles to move forward now revolve almost entirely around ASISCO development's ability to move forward with project financing. Our congratulations to the ASISCO development team on this key milestone for this sizeable Canadian gold project. As a reminder, once in steady state production, Caribou would have the ability to deliver 9,000 to 10,000 gold equivalent ounces to ASISCO thanks to our 5% NSR royalty on the project. Finally of note is that Caribou is not currently included in ASISCO's five-year outlook, as we await more clarity on project financing. And this provides a good segue to slide 14. After a good start to the year, ASISCO is in a good position to meet its 2025 gold-equivalent ounce delivery guidance of 80,000 to 88,000 geos. We've also now included Browlarn as a paying contributor to this range for 2025. Touching briefly on the two blue bars to the right, and as just noted, Caribou is currently not included in our 2029 outlook, but clearly could have the ability to move to the left as Asisco Development's financing initiatives continue to progress. Along the same lines, another project to keep an eye on is Solidus Resources' Spring Valley Gold Project in Nevada, on which Asisco holds a 2% to 3.5% NSR royalty over the core of the deposits. The most recent update there is that the U.S. Bureau of Land Management, or BLM, has announced an expected release for a final environmental impact statement by July 11th. In addition, the BLM has guided for a record of decision by August 11th. Theoretically, this would be expected to allow for project construction to commence as early as Q3 of 2025, similar to the Caribou asset. On slide 15, you'll see that 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 slide 15. Of particular note on this slide is Goldfield's most recently updated timeline for windfall, where final permitting, along with other key project milestones, including an updated feasibility study, are expected in the second half of this year. with a final investment decision and the start of an 18 to 24 month construction process in the first quarter of 2026. Also worth touching on is the fact that our partners at Merrimack or Copper now expect to release a feasibility study for their MOD project in very short order. And this should then be followed by the receipt of final permits for the project in the fourth quarter of this year. Finally, we'll end the formal part of the presentation on slide 16, which outlines the current state of ASISCO's balance sheet. At quarter end, we had total debt of just over $70 million and net debt of only $10 million. Long story short, the balance sheet is looking strong and has got even stronger subsequent to quarter end with ASISCO getting close to a net cash position. Our improved financial position is key to Asisco's corporate development team as they continue to be extremely active across multiple potential transactions, some of which are significant in size and scale, with the hope of getting more deals across the line over the next few months. Our balance sheet provides the company with the financial capacity as well as flexibility to continue its strategy of disciplined allocation in the pursuit of high-quality or creative precious metal streams and royalties that will bolster the company's current and near-term gold equivalent ounce deliveries, as well as cash flows, all of which should accrue to our shareholders' benefit. And finally, we'll deviate a little from the usual formal program to highlight that this is our last conference call as a Cisco Gold Royalties. Shortly after this call, we'll be hosting our AGM, at which we expect to pass a resolution allowing the company to change its name. It's important to note that June marks our company's 11th anniversary, and today we're stronger than ever. Commodity prices are elevated, our assets are performing well, the balance sheet is strong, and we're just getting started on our peer-leading growth trajectory. The long story short is we're excited about where we are today and where we're headed tomorrow. So why the name change? Simply put, we've evolved. We're now a fully independent organization with a refreshed management team and board. And as part of that evolution, the Cisco Gold Royalties is becoming ORR Royalties, a name that honors our history, our precious metals focus, and our Quebec roots. What's not changing is our NYSE and TSX ticker. It'll still remain ORR. and our commitment to future growth via disciplined capital allocation and a high quality precious metal focused portfolio of royalties and streams. We're extremely excited about you joining us on this next stage in our company's evolution. And once the votes are tabulated later today, we'll be proud to be moving forward together as ORR Royalties. And with that, I'd like to thank everyone for your time today. We'll now open the line for questions, including those from the webcast. And note, if we don't get to all the questions on the line, we'll make sure we respond offline to those that are not covered on the webcast. Joelle?

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

Thank you, operator. And as always, if anyone on the call or listening to the replay has additional questions, insights or observations on our business and our business strategy, please do not hesitate to reach out to Grant or Heather or myself as we'd be more than pleased to provide more information about the bright future for our company and its shareholders. Thank you for your time today.

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