Good morning, ladies and gentlemen and welcome to the Osisko Gold Royalties Q2 2020 Results Conference Call. [Operator Instructions] Please note that this call is being recorded today, August 6, 2020, at 10:00 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 Mr. Frédéric Ruel, Chief Financial Officer and Vice President, Finance. I’d now like to turn the meeting over to our host for today’s call, Mr. Sean Roosen. [Foreign Language]

[Foreign Language] And I'll switch to English now. And just to recap what I had said, we really are trying to make sure that we are the best partners out there for COVID-19 for both of our operators, our employees and our investors. We've taken a lot of steps and tried to be a leader in terms of how things should be done and can be done during this pandemic. We've taken a very strong position in terms of supporting all of our operators and to do the best we can to take care of all of our associated partners, employees and families that are associated with us and those in the greater good of our society, as we go through this pandemic. I'll start off with a basic recap of the business. I don't want to lose sight of where we are in this pandemic. But we did produce 12,386 GEOs in the quarter. We had $28.7 million of revenues and royalties from our products that we that were invested in. Cash flow from operating activities was at $15.4 million, net earnings at $13 million with about $0.08 per share, adjusted earnings of $5.7 million after several payments, including dividends. We withdrew production guidance due to COVID-19 in Q1 and Q2 – sorry, in Q2. We are back now guiding to about 63,000 to 65,000 ounces a year. And for the first half of the year, somewhere between 30,000 – sorry, second half of the year, sorry, from 33,000 to 35,000 ounces as the mines come back online. We also did a financing in the second quarter of $85 million with Investissement Québec. And we really thank the government of Québec and Investissement Québec for having partnered up with us during a hard time. It was more sort of…

Thank you very much, Fréd. I just wanted to give a snapshot of your company, the shareholders own this company. And things are going exceptionally well. I think in terms of where we are from an asset standpoint, obviously from a share performance standpoint, we have some ground to make up, but the fundamentals of the company remain exceptionally solid in a space that's very difficult. The next slide will show you the quality of our portfolio, over 135 royalties and streams and precious metals offtakes. Diversified cash flow from 16 producing assets, 91% going to 95% cash flow operating margins in terms of most of our assets are in royalties. So we don't have margin compression the way that others do. And that sort of I think, distinguishes the portfolio from a lot of other and so this is a dominantly royalty portfolio, as opposed to a streaming portfolio. Page 12, the quality of investments, I mean, we've done a lot in terms of making sure that we had quality and our dividends sits at 1.5%, which is the best in the space. As you can see here, Wheaton and Royal and Franco are all at a 1% or less, whereas we're at 1.5%. So we do offer kind of a wait and see attitude. And I thinking that, obviously, as an increased gold price, we have leverage to a significant amount of growth assets, in our portfolio, as we always said, we were strong growth company with our accelerator model. So we're well leveraged to take advantage of this gold price as we move further into it. Significant undervalued amount there in terms of re-rate, it's surprising to me that that we haven't seen the re-rate yet, but for those who come in now I think that the…

[Operator Instructions] Your first question comes from George Topping from Industrial Alliance. Your line is open.

Great. Thanks, operator. Hey, Sean, Sandeep and everybody else. So what’s in the Cariboo gold project, Sean? You back up and running through steep there on the exploration and reclamation activities et cetera? Hello? Hello?

One moment, please.

Yes, hi, George. I think, I hear you, I don't know, we lost Sean there for a moment, or if he's on mute, but I'll start the answer. Hopefully, he's right behind me. But yes, good morning, George. Yes, things are generally back up and running. We did take a bit of a hiatus to make sure that we had the least amount of footprint during kind of the pandemic. So generally speaking, we slowed things down and in the near term, we'll be looking to kind of get back, going to full steam with respect to exploration and some of the small remedial work that we're still doing there to clean up pass sites.

So you're still going to send the $10 million for this year, you think, from of the MD&A?

Look, I think there's certainly the ability to catch that back up. I think as I said, it made sense to take a bit of a hiatus just to make sure that we were protecting our employees and the community most importantly. And there's so many the ability to catch that back up over the next two quarters.

Well, there's rules route to the permitting as well with the government being in practice.

Sorry, George, did you say whether there was an impact on the permitting from COVID?

Yes, on the permitting schedule.

Yes. Not as of yet. I mean, I think there's been enough buffer and redundancies in our permitting schedule that we can absorb kind of what's happening in the near term. Our team has continued to work, whereas we weren't necessarily full-steam onsite. We've certainly been full steam ahead on the permitting side. As you can imagine, a lot of that is desktop work and engagement. So that's all been ongoing as fast as we can get it moving. So I don't think we've really suffered any delays from that perspective as of yet. And again, I think if anything, we had the ability to fast track permitting the community. The first nations, the government have all been very supportive and we look to kind of continue that with them. And as long as we keep acting responsibly, we think we have the opportunity to make up ground not necessarily lose it.

All right. And then second question that the diamond market has been interested and what’s you're saying there with respect to diamond sales and pricing obviously for the Renard diamonds.

Yes. Obviously, Renard remains on care and maintenance. The diamond market was completely busted through this COVID piece. We're starting to see signs of life just broadly on the diamond. On the diamond side, there are more sales kind of coming about. Some have already transpired. We've seen a small uptick on that side, but I don't think it's – I think it's fair to say that we’re not out of the woods there, but diamond price perspective, nor as anyone in the sector. But we have seen some moderate improvement. I think from a retail perspective, again, we're not back to pre-COVID levels, but there are positive signs out there that things are returning to normal if you will. And so I think we'll be cautious and we'll look to see some moderate improvement, but there are – we've got a very sound partnership that's involved with the Renard mine. It is a good mine. There's a billion dollars of good infrastructure that was spent there. It's really just missing a little bit of joy from a diamond market perspective, but we certainly hope, the guidance we put out today does not reflect Renard, just given the continued uncertainty for diamond price perspective, but we certainly hope that Renard will come out – come back into the full for us. And I think the partnership is working on ways to do that and going forward.

The commodity specialists that you speak to, are they detecting the price and say the next 12 months or so at a level, where you might reopen the runoff?

Yes, look, I think there's certainly that ability, I think remains to be seen, obviously, it's not the Eagle paying market to have to operate within from a pricing perspective. I think the sales that are coming up now, some of the ones that already happened, some of the ones that are coming up soon will be pretty telling. And you can imagine where we're keeping a close eye on that. In the meantime, I think the mine has been doing everything they can to bring their own cost structure down so that they can bridge that gap, not necessarily through diamond prices, but also through just being more efficient at everything we do. So look, I think, as I said, a lot remains to be seen there. But we are cautiously optimistic that we're just a little bit of improvement on the diamond side. There might be a reset there in our future.

And George, maybe I'll just add a little bit of color to that. As you know, I know we've been around for awhile, so it's never as good or as bad as everybody likes to think it is. And I think the diamond market, we were seeing a lot of sort of smart people are going back and doing assets in the diamond space, so cautiously optimistic, all the way around on the diamonds.

Got it. Great. I’ll pass it on, I have taken enough time. Thank you.

Your next question comes from John Tumazos from Very Independent Research. Your line is open.

Thank you. Congratulations on better price environment. And maybe people will understand and embrace the incubator model now.

Well, John, we currently hope your enthusiasm is shared.

I'm trying to throw you a cream puff without being too difficult. And maybe people don't understand the value of Cariboo or how smart it was to buy Barkerville late last year. What is the lowest – what is the highest offer you've turned down for Cariboo or what do you – what is the lowest you'd sell it for? It looks like, it's a big piece…

John, you're putting me on the spot on a lot of fronts here. But I will say that, Cariboo has continued to deliver, not just, obviously from the gold price change, but we've had significant success at the drill bit on that project. And we're going to be coming back to the market to tell you about that here in the next short while. But obviously, we bought – it was a 4.6 million ounce deposit at $1,300 gold, and we're now dealing with $2,000 gold. So we don't – we claim that we're too smart, but we were smart enough to recognize that this was asset, unlike others. It’s not just a mind deposit and that we’ve identified it’s the overall resource that we’re dealing with there is only in the first four kilometers, and we have 83 kilometers to deal with. So we kind of feel that we had to take the hit that we took, and there was a lot of punishment it was dealt on the share price for that. But hopefully we’ll see some reward as we come back and we demonstrate the strength of this asset and the fact that it’s not just the deposit, but it’s actually a mining camp. So, we’ve got our work to do John. And we’ve said no to quite a few corporates, and there there’s a lot of discussion around it because the number of deposits that can actually go to 5 million ounces of minable in the world is quite slim and Barkerville is a camp. And we see upside there, a single process facility with multiple mines up and down the trend. As we get forward onto it, and we’ll be a little more vocal about it as we come into Q3 and Q4, John. We appreciate your view and the fact that you’ve done the work to go and look at what Barkerville actually is.

Do you think it’s reasonable to expect the pay day to be over $500 million with the first $500 million tax shielded?

I don’t like to put numbers like that out there without having a lawyer and accountant sign off on them, John. But certainly, we see here in a PA study that we did last year, couple hundred thousand ounces a year with all its standing costs being below 800 – sort of in the high 700’s. This thing is worth a ton of money.

Congratulations, and thank you.

Thank you, John.

Your next question comes from Kerry Smith from Haywood Securities. Your line is open.

Thanks, operator Sean or Sandeep. Just on Cariboo, you are going to provide an update sometime later this year on that asset. Will the resource update come as part of that disclosure or is that going to come out earlier?

Kerry, I think where we are on it right now is that everybody’s been so negative on the asset. We’ve been a little hesitant to get out there, but our work is being done and we’re going from four to 10 drills on the project as we speak. And as we get more comfort in terms of delivering, not just a resource update, but a reserve update, we’ll come back to you. But I would suspect it to be in Q4.

Okay. So it’ll all come at the same time then. Okay. That’s great. Thank you, Sean.

Kerry, we’re going to deliver a bulletproof resource curfew. We don’t really want anybody else poking at this thing. We know the assets solid and we just want to make sure that we deliver the proper product.

Okay. Got you. Thank you.

[Operator Instructions] Your next question comes from Jeremy Hoy from Canaccord Genuity. Your line is open.

Hi. Thanks for taking my question. I think a lot of my questions have been answered. Actually they were all serving Cariboo and Barkerville. Just related to next steps in the back half of the year, you just have a resource and sort update coming. Anything else going on with that project? You mentioned increased exploration as well.

Yes, absolutely. Mr. Lodder and Maggie have taken – amongst themselves who go out and get us 28 new drill targets. So we will be hitting those targets on a priority basis outside of our infield drilling. And yes, it’s been very exciting times at Barkerville and I hope that everybody will be impressed when we come forth with the information. But given the reaction that we’ve had in Barkerville in the past, we’re not going to come out until we actually have a final product for you. So, it will be fourth quarter information. And we will make sure that everything is drilled beyond the shadow of a doubt before we show it to anybody. Just based on previous reactions to that asset in terms of where it sits. We think that metallurgically mining wise, permit wise that we’ve been able to de-risk the assets significantly. But we’re going to come forth at the same time with that information probably more into Q4.

I’d appreciate that. Thank you.

[Operator Instructions] Your next question comes from Adrian Day from Asset Management. Your line is open.

Thank you. Just a quick question. Listen, I may have missed it completely, but with the Malartic underground, did you in the end have to make any concessions on the royalty.

Adrian, thank you for the question. The answer is no. The question that was being served up in the marketplace to shareholders previously was whether the royalty was making as much money as the rest of the mining group was at $1,200 or $1,300 gold price. I think that that discussion has ended. We’re obviously well north of $1,200 to $1,300 gold. We have no intention to make any concessions now. And there’s been a bit of a discount on the Osisko share price anticipating that we would be making a concession on that royalty. But we have no intentions to do so. And obviously $2,000 gold, it’s not really even a relevant discussion that we would entertain.

Super. Thank you. Thank you.

We have no further questions. I’d like to turn the call back over to the presenters for their closing remarks.

So I’d like to thank everybody on the call today and we appreciate it. Osisko has been a growth company and we’ve had the lumps and bruises going through the marketplace as we built that growth portfolio. But obviously, I think that multiplied by the current commodity price that the risks that we took in building this portfolio over the last five years is paying off for us now. And I encourage Osisko shareholders to be loud and proud about their persistence and their participation with us as we went through this asset building program. And I’ll sign off there and thanks everybody.

This concludes today’s conference call. Thank you for your participation. You may now disconnect.