Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q1, 2020 Results Conference Call. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] Please note that this call is being recorded, today, May 13, 2020 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. Sandeep Singh, President of Osisko Gold Royalties; and Ms. Elif Lévesque, Chief Financial Officer and Vice President of Finance. [Foreign Language]

Thank you, operator. [Foreign Language] Welcome to the Q1 reporting call for Osisko Gold Royalties everybody. Thank you for taking your time this morning. Pretty good quarter because we’ve had obviously some challenge in the second quarter with everybody else with the COVID-19 crisis. So I want to start on Page 3 and I would refer everybody to look and read the forward-looking statements as we will be making some forward-looking statements throughout this presentation. This presentation is found on our website under Osisko Gold Royalties first quarter results for 2020. I’ll start on Page 3 with the highlights from Q1 of 2020. We had GEOs, gold equivalent ounces of 18,159 ounces creating revenue from royalties and streams of C$37.8 million. Cash flow from operating activities is C$23.8 million with a non-cash net loss of C$13.3 million mostly related to the impairment of C$26.3 million of which C$19.3 million was to the Renard diamond stream net of taxes. Then adjusted earnings of C$7.5 million or C$0.05 per basic share. Also due to the pandemic we’ve withdrawn the 2020 production guidance as many of our associate companies and projects that we are invested in have also withdrawn therefore we will come back to guidance as our partners continue to update their guidance as we get further into the year and as pandemic crisis becomes more evident as to what the structure going to be mid to long-term on the projects. Our cornerstone asset, the Canadian Malartic mine, was affected by COVID-19 including a shutdown for care and maintenance from March 25 to April 15, it is currently by ramping backup and we look forward to seeing online back the gold production. I want to be specific on our cash operating margins, net of some offtake agreements we are operating at 91%…

Thank you Sean, good morning everyone strong quarter for Osisko in terms of revenues, cash margin and operating cash flows despite the disruptions on activities for some of our main operators. The strong gold price more than offset the reduced deliveries at the end of March. Revenues from royalties and streams reached $37.8 million in Q1, up $4.3 million compared to last year, an increase of 13%. Cash flows from operating activities were slightly lower by 1 million in Q1 of this year but excluding the impact of the changes in non-cash working capital items operating cash flows were $27.9 million compared to$ 22.6 million in Q1 of last year, an increase of 23%. On Page 8 of the presentation, we show breakdown of our cash margins for Q1, cash margin on our royalties increased by $2.3 million to $25.6 million cash margin on our streams also increased by $2.3 million to$ 8.8 million resulting in a cash margin on our royalties and streams of 91% in Q1 of this year compared to 89% in Q1, 2019. Our total cash margin reached $35.3 million in Q1 including $800,000 generated from our Offtake agreement, an increase of $4.7 million or 15% compared to last year. On page 9 of the presentation, we presented summary of our earnings and adjusted earnings we had a net loss of $13.3 million in Q1 or $0.09 per share compared to a net loss of $26.5 million in Q1, 2019 or $0.17 per share. Excluding impairment charges net earnings would have been $6 million in Q1 of this year compared to $2.1 million last year. Adjusted earnings were $7.5 million or $0.05 per share compared to $5.8 million or $0.04 per share in 2019. On Page 10 of the presentation, we have a summary of results…

Thanks very much for that Fred. And I think it's just worth highlighting that our net debt position is quite manageable at $180 million and our equity portfolio has been performing quite well. Obviously, these increased gold prices. So all in all, things are going pretty well and a lot of liquidity, a lot of firepower on the balance sheet to work within this -- in this interesting market times, as they say. On Page 12, just a recap of our portfolio, over $135 royalties and streams and precious metal offtakes acquired since we started this company in 2014 with one producing royalty and four non-producing royalties. We've gone pretty quick in terms of getting access to quality assets throughout the space in a very competitive space. And we've created the accelerator model, which is somewhat unique to us. And we currently operating at the highest cash margins of anybody in the working streaming space at 91%. With an exceptionally low geopolitical risk with over 68% of our assets being in Canada 86% here in North America by geography, and it's, I think it's a credit to our partners, ÉLÉONORE, Eagle, Mantos and Newmont, who are all the top quality operators on the asset base that we're most exposed to. And we'd like to do a shed out to ÉLÉONORE, Mantos and Newmont in this time of crisis. We really appreciate the efforts of all those management teams have made to keep these assets in good stead throughout this challenge. On to Page 13. In terms of dividend yield, we're at the top quality of the investment cycle, if we're looking at this dividend yields at 1.5%, being more than all the other royalty and streaming companies in the space. So therein lies the opportunity, as we see it in…

[Operator Instructions] [Foreign Language] Your first question comes on the line of Kerry Smith of Haywood Securities. Please go ahead. Your line is open.

Thanks, operator. Sean a couple of things on Cariboo, could you give me sort of your current thought process on the timing of the permitting process? And also bringing in a partner what your time your expectation and timing is to have concluded that sort of a time investment?

Yes, well obviously, we've been in an uptick marketplace here and Barkerville has gotten an awful lot of attention as of late from various partners, so we are working very hard with those partners to optimize the investments of the Osisko shareholders have made into this project. In terms of timeline on the permitting, we see -- we have a construction release, hopefully in 2022. Probably later on, but we have been moving well. Within the new framework that BC has outlined, and we're quite happy with the way the process is going in our first nations partners have been very supportive as well. Most recently, prior to the COVID-19 crisis, we had the mine minister and major projects coordinator come and visit the site. And obviously, we think that given the economic outcome of a lot of different industries, right now, gold mining in the Cariboo, which is a Brownfield site. It’s going to be a priority investment and we have the ability to create significant amount of jobs, both during the construction period with probably 700 jobs to 800 jobs during construction and then a full time workforce of somewhere between 400 and 600 as we continue to ramp up and build out that project, from the partnership we see very, very high quality partners that are interested in this project because of its scalability and because it is a camp size project.

So Sean, is your target to then try and have a partner for that project by the end of this year, let's say or is that a 2021 event?

No, I think we'll get a partner. We're in process right now, obviously COVID-19 is creating challenges for a lot of different people. So I'm hesitant to put timelines on things, but I don't see why we wouldn't get a deal done in the current market conditions that [indiscernible] BC has as deemed mining as a necessary service. So it has not been shutdown. And then ministry there continues to work, as do we. And the team there has really, move things forward as we got going there. So we don't really see anything that would inhibit us from getting the field done, hopefully, and over the course of the summer, or certainly by the end of the year.

Okay, and then just on the permitting side, when would you file the documents with the regulators, if you want to have those permitting done in 2022?

Well, the process has already begun Kerry and we have submitted projects descriptions last year. So we're optimizing those on what's called [IRTs] and permission requests transfer. And we are in the process now and hopefully be going back and forth a bit more. But we're in constant motion on the permit as we speak today, and that process is engaged.

Okay. Okay, good. Thanks Sean.

Thank you, Kerry.

[Operator Instructions] Your next question comes from the line of George Topping of Industrial Alliance. Please go ahead. Your line is open.

Thank you for everyone. Sean when the [$10 billion] to be spent this year Cariboo Gold, how much will be then so, expansion and how much is going to remediation?

Well, the budget right now is $5 million for drilling. So we'll be doing some tidy up in so as we've finished up with that geological model. So anywhere we've identified that we need the higher density of infill drilling, we'll go back and tidy that up. We have made an investment into the contact water treatment facilities that are really sort of pre capitalizing the infrastructure that we need to go mining. And then in terms of remediation work, it's mostly being done in function of the BC [rain] development, but they won't be that much the $10 million is really to go to the drilling as we go forward, and we'll be a little bit opportunistic George as we see opportunity. To do things that are going to de risk the project, and move us forward, and we can get the permits to do them. We may go and do that. And then also, we'll be so much subject to our financial partners view how the project as well as we get further into it.

Right. And then for 2021, do you have a thought on how much you might spend there? And, admitting it might change that you have another partner involved with his own thought, their own thoughts?

Yes, I think where we are, on that charges, that there's probably three answers, if we go alone we would probably be fairly conservative, the mid-tiers, assuming that we're driving hard to do everything we can to facilitate that construction release, [ASAP] and then the third one is assuming that we want to get aggressive not only on that, but we also want to increase the time allowed that partnership that we would initiate a significant drill program in 2021. So, I'll come back to you a little bit later on in the year as we, fill out those goals. But I mean, we can assume that it's probably going to be a minimum of $20 million to $30 million, and then upwards from there, depending on how aggressive we get on the exploration and underground development side.

Got it. And then, just lastly, just switching over to diamond some and obviously with the India being shutdown now, it's coming back a little bit. Have you had any industry updates on we're diamond monitored? So they might recover from many of the commodity specialists?

Yes, we have. And there's a couple of different viewpoints. If you look back to the last financial crisis, obviously it didn't have the same ramifications of shutting down the diamond polishing Centers of India as COVID-19 has. There is pent up demand and we're seeing that retailers in China who have opened back up have seen significant demand. And first indications are at the month of April was somewhere between 60% to 80% of what the 2019 April numbers were. So that demand did come back fairly strong and you've seen them shutdown and or shut in have different mines in this space. So there is a supply demand scenario building. However, there will be a bit of an inventory cleared through as diamonds go back out in that space. But we are optimistic that your diamond prices will respond like they did in 2008, ‘09 with that pent up demand coming back into space.

All right. Do you think, [indiscernible] I'm in with your budgets be maybe Q4 this year or there [indiscernible] for and we stopped.

It's going to be a bit speculative on my part, George, but obviously, I certainly would hope that we can do that. The mine is on -- on a dry shutdown right now as we monitor the situation. And we'll review that fairly regularly with our partners as we get further into the piece, but the mine as you know, is well groomed and well built and it was just starting to hit its stride when the diamond prices started to pull back, and we are ready and waiting to put that mine back to work as soon as the time is right.

Got you. Great, thank you.

Thank you very much, George.

Your next question comes from the line of [indiscernible]. Please go ahead. Your line is open.

Hello Sean. Congratulations on the progress on so many fronts.

I appreciate that, John, and I hope you're keeping well and safe. But I know you [indiscernible] place that that has challenges as we have bet here?

Yes, I just keep looking at my computer and work in the garden and I discovered the wholesale fish markets, the fishermen can sell the restaurants and there's great fishing around here. So it is an all in the Canadian North. There's a little bit good here. Could you update us please concerning how your investment criteria have changed as the markets have changed. First, have you raised your gold price basis and doing analyses, the $400 or so that the spot prices start-up some of the measures have kept their criteria the same as a year or two ago. Second, have you raised your discount rate assumption because a couple of projects had charges this year and last year and a year before. Third, how much do you raise your discount rate outside of Canada? And fourth, how do you prioritize between these dozen or so wonderful projects and all appear promising, where some of them don't have a million meters of drilling like Windfall in earlier stages?

Okay, I'll try and tackle the tax laid out before [indiscernible]. In terms of our gold price right now, we're probably somewhere around 1,400 U.S., which I think is bank consensus, and we'll obviously run certain sensitivities based on the asset and what we think the ability of that asset is to perform at lower gold prices. I'm a big believer in the ratios between cut offs and in mining rate. So that's probably a higher criteria for me on an individual basis. But we do look at internal rate of returns. And then I'm just countering rates, we tend to focus a lot on the geopolitical risk and the life of the mine. in terms of where we are in the world, obviously COVID-19 has changed the geopolitical dynamics and a lot of environments, a lot of countries. If you can fly there or go there, it makes it much harder to monitor things. And I do like my maple syrup and protein. So we've been sticking to Canada with Quebec, and BC being our dominant jurisdictions that we've been deploying capital in, and obviously, where we've had the most success of the drill bit. And in terms of the earlier stage accelerated companies, because of the flow through share and quote and charity flow to share program here in Canada, and the low cost of drilling here. It's very much in our favor to continue to push on this brownfield stories that we've been able to focus on in Canada, the most recent one being the Bralorne asset. In terms of discount rates, we work with a 5% discount rate on premium assets. And we would increase that discount rate depending on the commodity, and also on jurisdiction of too much as 12%. In some cases, in terms of allocating capital, obviously, we're trying to prioritize whatever we think is going to have the most effect on short-term cash flow. In terms of decreasing GEOs for our balance sheet that is dominant, the dominant allocation of capital, we do take a long-term view on exceptional assets like Windfall and modified and Barkerville where we feel that there's a bigger prize to [indiscernible]. But normally the criteria would be nearest production and nearer to GEOs. I don't know if I got all your questions done yet, right –

Oh, we like the emphasis on long life and near production and safe places like Canada with all the double dip sign explorations. Thank you.

Thank you, John.

Your next question comes from the line of Carey MacRury of Canaccord Genuity. Please go ahead. Your line is open.

Yes good morning, Sean.

Good morning Carey.

Maybe another question, maybe another question on Barkerville. Is there a scenario once you get to a construction that soon where you fund construction within Osisko Gold? Or do you think it's more likely at that time to either sell the asset or, put it in another vehicle?

Well, we'll have to cross that bridge when we get there, I guess Carey but I didn't, I just want to make sure everybody's clear Osisko’s Gold royalties is a royalty and streaming company. Our main business is project finance. So that 25% of allocated to the incubation accelerator strategy but, once our project gets to shovel ready, fully permitted, it falls back into our main strategy. So if we see the numbers are right, and we can continue to invest there and meet our criteria of being a dominantly royalty and streaming company, we're obviously going to take advantage of, of the projects we know the best and, things that we've been actively involved in the evolution of within that criteria. So we will be opportunistic for the Osisko Gold royalty shareholder. So we want to make perfectly clear to everybody that royalties and streaming business is here to stay. And there won't -- if we do go into any other mode, that’s why we created in our spare was to have a platform that other capital could come invest alongside of us in that space and do choose the proper partners unlock the most amount of value in the most expedient manner. With that, we think that that is the proper strategy in this market, and we see a lot of capital, willing capital is coming into the space right now. And we're in a fortunate position where we control a lot of extremely high quality assets, especially things that can be 5 million ounces, or more than have the ability to go three to 500,000 ounces a year production in the long run and have the Canadian monitor on them. That's been our bread and butter. And we think that we're really well positioned ourselves to take advantage of that. With the Eagle, Victoria's mine coming online, and then we have three other big Canadian projects that are sort of within our program, we have the most exposure to big Canadian assets of any group out there at this point in time. And I think that we're well suited to take advantage of that for our shareholders.

Okay, great, and then maybe in the longer term guidance of 140,000 ounces, can just remind us what the big components of that quote is relative to where you are today?

So we would see obviously, the underground back 40 in Michigan. We also see Mantos expansions working out for us. And we see Barkerville and Canadian Windfall following a development track and hopefully, what we did not include in that 140,000 ounces, for example is Falco with the with the silver stream because we haven't finished paying for it yet. So we've only included the assets where 100% payment, but it's a still [indiscernible] shareholders on the asset have been made. So we have quite a bit of organic growth in those assets.

And maybe one last one on Mantos. Can you comment on how the expansions going there when you expect to see an uptick in your counselors for Mantos?

Yes, it's a private company. It's very much on track right now. And I think that the way that we see that asset is [indiscernible] a very good operator with deep pockets. And we see them pushing hard to get that next expansion under control management team there. It’s very focused and driving hard and we think that by 2021. In 2021, they should achieve their goal, but it's an exceptional effort. And that asset is really showing its true colors to colors and through quality.

Okay. Thank you very much.

There are no further questions at this time. I turn the call back over to the presenters.

Thank you very much. And I just like to thank Sandy of saying and Fred who both stepped up to the play here in Q1 for a great effort as well as the rest of the members of the team who joined us, Mike Spencer, on our international side and [Ian Farmer] has taken on the role [indiscernible] and corporate development. And then one, [indiscernible] who's joined us in the Montreal office on strategic planning. The team is fully functional and I'm very happy with the way that the team has been able to come together, especially in this COVID-19 crisis and achieve so much in such a short time. Thanks, everybody and stay safe.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. [foreign language].