Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q4 and Year-End 2018 Results Conference Call. [Operator Instructions] Please note that this call is being recorded today, February 21, 2019, at 10 a.m. Eastern Time. Today on the call, we have Mr. Sean Roosen, Chair of the Board of Directors and Chief Executive Officer of Osisko Gold Royalties; Mr. Bryan Coates, President of Osisko Gold Royalties; and Ms. Elif Levesque, 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. Sean Roosen. [Foreign Language]

[Foreign Language] I’ll ask everybody to look at the forward-looking statements. We will be going from the PowerPoint that is on our website that is titled 2018 Q4 and Year-End Results. And I’m going to start on page three. I want to make sure everybody has a look at the forward-looking statement prior to that. 2018, an interesting year in terms of market conditions, gold price, and a bit of a disconnect between capital markets and the commodity price. Here today, we’re enjoying an increased share price from last year. We’re currently trading around the C$14.50 rate, up from a low of C$9 and change in 2018. Highlights from Q4 2018, starting with starting a little over 20,000 gold equivalent ounces earned in the fourth quarter, revenue of C$30.7 million, creating net cash flow from operating activities of C$18.6 million. We did, however, take a write-down on Éléonore, which resulted in a C$0.73 per share impairment, and we’ll talk more about that when we get into Éléonore and we’ll give you more details on that. Adjusted earnings for the year at C$13 million or C$0.08 per basic share. Overall, for 2018 a record of just over 80,500 ounces produced with a significant margin of just under 90%. Record revenues of C$127.6 million. Cash flows again at an all-time high of C$82.2 million. The loss, of course, attributed to the property through the write-down of C$105.6 million, which is a special write-down which we’ll get into later. We also repaid C$123.5 million on our revolving credit facility, making that we are completely paid down with what we paid down in 2019 as well. And we received C$159.4 million from Pretium Exploration to repay and purchase back the stream that we had acquired during the Orion transaction in 2013 for a net…

Thank you, Sean. So, we have reviewed our assets for impairment indicator for the fourth quarter and recognized impairment charges of C$166.3 million, amounting to C$123.7 million net of income taxes. The most important component of that was on Éléonore for C$148.5 million and C$109.1 million net of income taxes. During the fourth quarter Goldcorp issued updated reserve and resource estimates on the Éléonore gold mine, which led to a total loss of mineral inventory of over two million ounces. In January, Newmont also announced the acquisition of Goldcorp in a deal valued at about US$10 billion. So, consequently, on February 13, 2019, Goldcorp announced an impairment of US$1.6 billion, representing US$1.4 billion net of income taxes on the Éléonore gold mine due to the decrease in the reserve and resources and reduction in the estimated fair value of Éléonore’s exploration potential. Osisko evaluated all the tax and circumstances and concluded an impairment of C$123.7 million net of income taxes. We still believe that the exploration potential on the Éléonore project is there, it’s just a valuation currently not reflecting the potential. So, going forward, based on Goldcorp’s guidance, we would still be expecting about 8,800 ounces of gold annually from this royalty. If you go to the next page, on page 10, we have record cash flow from operating activities of C$82.2 million and even with a higher finance cost, compared to previous year of C$13 million we still had a pretty good year. And that’s really a reflection of the chart that you see on the right that’s kind of based on the record revenues basically from a very good year from Canadian Malartic as well as reflecting a full year of results and cash margins from the Orion portfolio that we acquired in 2017. And if you…

Thank you, Elif. As you know, we announced a normal course issuer bid of C$400 million, up C$200 million. The normal course issuer bid is still active and we use our discretion as to when and where. We may purchase stock at any given time. We have purchased 1.7 million shares at an average cost of C$11.95 for a total investment of C$20 million under our normal course issuer bid to date. Page 16 has a bit more detail on the Eagle project and you can see some of the photos there. This is a 30,000 tonnes per day heap leach operation being built just north of Mayo in the Yukon, 64.5 degrees latitude. Just to put things in context, precipitation at the Eagle mine site is the same as Phoenix, Arizona. So, it doesn’t get a lot of snow. It can be cold in January and February. And the average, the reserve life here gives us 10 years at about 10,000 ounces to our royalty. So we’re quite keen to see this mine get up and going and right now construction is very much on track for gold production in the second half of the year as we move forward. Page 17, a bit more detail and colour on the amendment of the Stornoway stream. We paid C$21.6 million to reinforce the Stornoway balance sheet and we still hold a clear and concise stream of 9.6% of all the diamonds produced at Renard. What changed in the deal was the way the transfer price is structured. The transfer price is 40% of achieved diamond sale price or maximum US$40 per carat with no escalation, so it’s much easier and cleaner for us to understand. And we make money on each and every diamond that is produced through our stream…

[Operator Instructions] [Foreign Language] Your first question comes from the line of Dan Rollins with RBC Capital Markets.

[Foreign Language] Sean, I just wonder if you provide a little bit color around the strategy of the company going forward. Obviously, it starts to develop as you start to build the base. But my first question on that is, with respect to the incubator model, realizing that you have done some deals through equity that have gotten you some pretty nice royalties, but you also continue to take equity stakes of the royalties. Is there a thought process of what differentiates between buying an equity stake in a company versus taking an equity stake and then actually clipping that royalty coupon as well? Just wondering if that's going to change and you're going to be a little bit more aggressive and start to say like if you want money, we're going to need a royalty and have some equity as well.

Dan, the only equity position, I think, that we own where we didn’t have a royalty, we actually earned a financing right. So, typically speaking, our equity investments are tied to either a royalty opportunity or a project financing opportunity. But to my knowledge we’ve not issued too many equity positions. IDM and some of the smaller stocks which were sort of chip shots to set the stage on an exploration story, but typically we’ll stick to our strategy of equity as a means to an end in terms of setting the stage for another project financing or royalty streaming opportunity. I don’t think you’ll see us do a lot of straight equity that’s not incorporated in a deal. The big equity deal that we did do last year was C$50 million in the Victoria, which was tied to a C$98 million acquisition of a 5% royalty on the Eagle project. Subsequent to that, we did put some more equity into Barkerville, but we also have a 4% royalty with the right to go to 5% on that project. So, we’ll continue to stick to that theme, Dan, and our equity, as we say, it’s part of a package and a ways to an end.

Okay, so even on the smaller deals we see like the C$2.5 million, C$3.5 million here and there. They tend to have a financing link to them through that equity. We just will see when it's press released?

That's correct, Dan. They’d have first offer or some other financing right.

Okay, that's great, and then just, obviously, there's struggle for small single-asset companies, there's struggle for development-stage companies. You seem to have built yourself a bit of a portfolio of high-quality projects in Canada, is there any thought process of trying to massage the various equity vehicles to put themselves together to create something with a little bit of critical mass once one gets into production and then you can start to leave it and then sort of use that as a growth vehicle and then you could help fund it through royalties going down the road?

I don't think, I’d want to get into any specifics on...

Not specifics, but just do you see an opportunity on that, yes.

Yes. As a general trend I think that we’re all looking at the cost of running a single-asset public company and trying to manage that G&A exposure and to consolidate expertise and focus on getting money into the ground. So, as a general theme, the answer is definitely, we do see advantages there, but my key criteria to all that is access to capital. Our strategy is twofold; we like to be at the very beginning of an incubation where we own royalty on an equity and then we also like to be in the last-money-in strategy, which is essentially coming to the value, time value curve out the other side where we’re partner in a fully financed package. So, those are our two main drivers and anything in between there that would involve consolidation to the advantage of those outcomes we would be supportive. But we stick pretty much to first principals about how we earn a royalty and then get paid on the equity, as we did in Arizona, or in the case of Victoria where we’re part of the project financing on the last-money-in strategy.

Okay. And then last one from me, just on the return of capital to investors. With the share price sort of coming off the loads of late last year, are you still committed to completing the share buyback? And number 2, depending on what your deal flow is, is the potential dividend increase in the cards here for 2019?

Well, being a shareholder myself, I always like the dividend. In terms of our use of capital this year, it is a bit of a target-rich environment out there, so the decision process to decide whether we buy our own stock or whether were investing in something else will be opportunity-driven. If we have better returns on a growth story that we could bring onto the balance sheet, we would focus on that; however, if we feel that our stock is undervalued, we will act, as we did last year, in terms of purchasing our stock back if that’s the best use of shareholders’ capital. We think we were pretty effective last year on the buy back and we’re certainly happy to see the share price rebounded up about 45% from the lows of last year this year. So we’re happy to see that valuation coming back into the marketplace, which is more in line with our belief system of what the asset base at Osisko should be earning in the marketplace and, as I said, it’ll be opportunity-driven depending on what we have in front of us.

Okay, that’s great. Appreciate the color and good luck in 2019.

[Operator instructions] [Foreign Language] Your next question comes from the line of Kerry Smith with Haywood. [Foreign Language]

When you went through your assets and looked at the write-down on the Éléonore, what was the thought process as it relates to Amulsar with what's happening over there? And could you just remind me what your book value is on that asset?

The thought process on Amulsar is, this has been a great pattern, but I'll refer to Elif as more master for these things than I.

So we -- as you know we have 2 interests in the Amulsar project. We have stream and the offtake. And together, they're about C$150 million. We hold investments in USA and the thought process -- when we did the acquisition as you know, we still had some time ahead in terms of the constraint in construction process. It was about a year. And I guess the thing is right now, what we were really waiting on was what was happening with the government over there. They went through elections again in December. And now actually really the popular person, Nikol Pashinian, was elected. And so far, we're seeing some movement in terms of trying to get the project going. Of course, this still depends on the speed of how things will go through. So far what happened, what we've seen is they've elected a third-party consulting company. So it's just to go to their impact again overall, and we think that process should probably take about 2 to 3 months, and we're hoping that with the new government in place, things will take a little bit of a normal speed. But of course, that's going to be a project that we're going to be following very closely in 2019.

And just for clarity's sake, it was C$115 million not C$150 million.

Sorry, 1-1-5, Sean? Okay. I thought it was 1-5-0.

The streams and the offtake, the offtake's is there.

There are no further questions at this time.

If there are no further questions, I thank everybody for their time this morning. Good luck out there and we appreciate any inbounds. If you didn't get chance to ask a question now, please give us a call at your leisure. We are happy to answer your questions at this point. And good luck everybody. Thank you.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.