Good morning, ladies and gentlemen. And welcome to the Osisko Gold Royalties Q3, 2021 results conference call. After the speaker's presentation, we will conduct a question-and-answer session. If you'd like to ask a question [Operator Instructions] Please note that this call is being recorded today, November 10th, 2021 at 10:00 AM Eastern time. Today on the call, we have Mr. Sandeep Singh, President and Chief Executive Officer and Mr. Frederic Ruel, Chief Financial Officer and Vice President Finance. I would now like to turn your meeting over to your host for today's call, Mr. Sandeep Singh. [Indiscernible]

Great. Thank you, operator. Good morning, everyone. Thanks for joining us for an update on our Q3 financials. Really good quarter for us, I'm not getting tired of saying that. So looking forward to update you on our developments over the course of the last quarter and then looking forward -- as we do, I'll point out that there is a presentation on our website. If you don't already have it, we will be walking through that [Indiscernible] pointing out slides as we go, so please make sure you pick up that presentation. And on -- starting on Slide 2, I'll also remind you that we'll be making forward-looking statements as we give you this update, so please be mindful of that fact. On slide 3, just starting off with some highlights on the quarter, we earned as you already know, given that we pre -released these numbers, just over 20,000 GEOs gold equivalent ounces for the quarter, which led to a record in terms of revenues and cash flows, of $50 million and $44 million respectively for the royalty and streaming segment of our Company. The cash margins stayed very similar, 93% or 97% excluding Renard and no change in that high-margin business. And then on the net earnings side, $1.8 million Canadian, that's obviously as a result of the impairment on the Osisko Development side of Bonanza ledge 2 a reminder on our front that the purpose or one of the primary purposes of that BL2 component which is not the primary Cariboo asset, is for training. It's largely for the remediation of a pack pile that sits on surface. And it's an area that can be worked while -- to commission the mill while the larger project cannot be touched in the permitting process. Did a noise…

Thank you, Sandeep. [Indiscernible]. Good morning everyone. Thank you for joining us today. Q3 was not too different from Q2. New records were reached with strong deliveries of gold and silver, which led again to record revenues and operating cash flows from our Royalties and Streams Business. And if we go to Page 13 of the presentation, we recorded record revenues of 50 million compared to 41.2 million in Q3 of 2020, which was of course impacted by the COVID pandemic. We also had off-take revenues in 2020, which is not the case in Q3 of this year as our last [Indiscernible] off-take was converted into a stream last April, cash flows from operating activities were 41.1 million on a consolidated basis for the Royalties and Streams segment alone. Cash flows from operations reach a record 44.1 million compared to a 37.3 million in Q3 of last year. If we go on Page 14, we present a summary of our earnings and adjusted earnings. Consolidated net earnings to Osisko shareholders was 1.8 million or 0.01 per share compared to 12.5 million in 2020, or 0.08 per share. The lower net earnings as mentioned by Sandeep, was due to the improvement charges recorded by Osisko Development of 33.3 million. On a consolidated basis, adjusted earnings were 17.9 million other than cents per share, which includes adjusted earnings of 23.3 million or 0.14 per share from the royalties and streams segment. And an adjusted loss of 5.4 million from Osisko Development or 0.03 per share. On Page 15, we have a summary of our quarterly results with additional details for the royalties and streams segment, which includes a gross profit of 33.8 million compared to 30.8 million last year. And as we have previously mentioned, operating cash flows of 44.1 million were…

Thanks, Fred. And we will open it up for Q&A here any second. Just been brought to my attention that perhaps there was a delay of about 10 minutes for some people entering the call. Our apologies for that. Hopefully we can make it up in the Q&A if we need to. But rest assured I said some great thing in those first 10 minutes better than what you probably heard. But it is a simple quarter for us again and the operations are working extremely well. Apologies for that technical glitch. Hopefully it won't happen again in future. But Operator with that, I think we can open up for Q&A.

Thank you. At this time, I would like to remind everyone in order to ask a question, [Operator Instructions] Your first question comes from Joshua Wolfson from RBC Capital Markets. Please go ahead.

Hi, Josh. Can you hear us?

Josh, your line is now open.

Sorry about that. That was an issue on my end, we see -- is with the permitting scheduling outlined in the release for [Indiscernible] at San Antonio. What should we expect in terms of timeframes for, I guess initial real mining and heap-leach processing from that deposit and then overall, how does permitting look there and then scheduling for production.

Yes. Good morning, Josh. I think things look frankly quite well, we've always been a little bit worried that with COVID, we might see undue delays. Osisko Development might see undue delays there in Mexico so far so good, so fingers crossed that that continues and there is no bureaucratic delays important to see that the stock pile got permitted and is nearly complete, so that work is ongoing, so there will be a little bit of production, but in terms of the main production that you're referring to from Sapuchi, the hope is that permit can come in, we're saying first-half, but the expectation is hopefully early part of next year, and then that's the gating item, once that comes into play, if it does come into play on that time horizon, that we can expect production in 2022. Obviously, if it comes in earlier, hopefully we can get a little bit more in, but that's the kind of bounds that we're working with. So it'll be a little bit uncertain until the permit comes in and hopefully that once it does, it'll be a little bit more clarity on how much of a year we can catch in 2022. And if we don't catch the year, we're expecting in 2022 frankly it just flows into 2023 but, overall we're happy with the progress, they're happy with the exploration drilling that we're seeing. It will be nice to get an update out there for everybody. And in the grand scheme of things as far as mining goes, I think it's all pretty near term.

Okay. So it sounds like -- that would imply -- if you get that [Indiscernible] permit in the first half of the year, you can get production, that would imply, let's say, within a six-month timeframe from permitting receipts, you'd be able to generate production [Indiscernible]

Yeah, look if it's the very last day of the first half, I think that's optimistic, but I think we're casting a pretty wide net when we say the first half of the year. So we'll see how that evolves and hopefully it could be sooner or later. And we'll have visibility on that, I think as we sit here in November 10th it's not that far away in terms of getting better visibility on the timing.

Okay. And then for Mentos, commissioning is happening in the fourth quarter. Should we expect maybe lower production in the near-term as maybe there's some operating interruptions before some improvements next year? And then, can you remind me what the typical delay is between production at the site and when Osisko receives the outputs in terms of revenues?

I'll ask -- I don't have that second answer for you off the top of my fingertips Fred. While I answer the first, maybe you want to give that some thought, but I think overall we don't in our conversations with the team over at [Indiscernible] expect the final tie in, if you will, to cause much of a back step in terms of production. [Indiscernible] that's we've been told today. And as you can imagine, it's a big project, it's not like it happens -- its not like flipping on a switch. They've been doing it as we speak. As they're 99% complete on pre -commissioning, obviously certain things are already coming into the fold, so time will tell and it will happen pretty quickly, but so far, we do not expect there to be a step backward. Same token is it going to -- it's not a light switch dipositive either, so it will take a little bit of time to ramp up. We're not expecting to get the full benefit of the year in terms of maybe being at 1.3 million ounces but hopefully better than we are and then somewhere significantly towards that mark. That's how we think about [Indiscernible]and try to putting you on the spot. If we don't have an answer, we can get back to you with one Josh, but do you have a sense in terms of the timing delays on [Indiscernible] ounces?

Yeah. Usually I would say it's 1 to 2 months. It's not more than 2 months.

Okay. That's great. And then maybe 1 final question just on the capital allocation side. The Company has been pretty active on its buyback, and most of the acquisitions in terms of Royalties and Streams have been smaller dollar amounts. And there is a reasonable size debt position, but there's obviously a lot of financial flexibility. How do you see the Company balancing these different elements and perhaps what's the Company's appetite to transact the streams versus buying back stock at current prices?

Look, I -- you said -- you used the right word, balance. We feel like we have the financial flexibility to do all of that. Obviously, we see the right deals we can reach for them. We have a lot of room on our credit facility, we upped it intentionally. We increased the facility, reduced the cost of it, that provides us a backstop for the convert that comes due at the end of next year. But I said in early 2022 that we would be disciplined at a point in the cycle where there were a lot more options for the sector in terms of how to finance itself, and we worked, and we have been, and we will continue to be. So, we don't have to chase growth the same way as others, perhaps we have a lot of it internally. We're still active looking at things and we still been able to add good quality assets along the way without overpaying for them. Assets that don't need spot prices to be viable. Where we sit today though, I would say with most commodities, oh sorry, certain commodities having been flat to down with the equity markets a lot more discerning, if you will. There's a greater need for royalty and streaming capital, so if we can find the right assets that fit our objectives, we are happy to transact in bigger and bigger sums, but that's how we're managing it. Balance when the stock just gets ridiculous cheap, we'll step in. I bet we can do a little bit of all of it, frankly, and we'll keep reassessing that balance as it changes, and you can imagine it's a pretty fluid situation, if you see something really big that you want to do, obviously that changes things, but for now we're pretty comfortable that we have the ability to do everything we need to with our Balance Sheet.

Great. Those are my questions. Thank you.

No problem Josh. Thank you.

[Operator Instructions] Your next question comes from Kerry Smith from Haywood Securities. Please go ahead.

Thanks, Operator. Sandeep, and just for Mentos just to follow-up on Josh's question, would it be reasonable to assume the full year 2023 would be at the 1.3 million ounce straight on the silver deliveries or would that be what you're expecting, I guess on the ramp up?

Did you say 2023, Kerry?

Yeah. Yes. Like a full -- basically 9 months or 10 months to ramp it up to 2022 and then a full run rate in 2023 calendar year?

Yeah. No, absolutely. I don't see why that wouldn't be the case. Obviously, a lot can happen between now and then, but it's been a fantastic performer for us. I think the expectation is frankly, hopefully we can have a long way towards that mark even in 2022, I think it's just -- it'd be premature for me to say until they get the system booted up, but certainly we've been impressed with the operational capability of that group, they hit it out of the park every chance they get. I think -- getting ahead of myself, but certainly we're expecting significantly increased year in 2022 and hopefully with that behind them, they'll be humming in '23.

And on that 40, are you anticipating that the Gold Resource Corp will update that feasibility study looking at -- they're talking about a smaller footprint, I presume they're going to have to update feasibility to look at a smaller or trading in a bigger underground operation, but do you know what their plans are?

Yes. Yes, to all Kerry. That is the path. There was a new feasibility in the works with [Indiscernible] on a standalone basis. Our technical team was providing some oversight to that process. We've been able to view for some time but smaller open pit and a bigger underground layer makes more financial sense, frankly. And it certainly helps on the permitting side, potentially not needing -- not impacting the wetlands that where the issue that last time around, at all. We think that makes sense in every way and we're happy to see gold resource [Indiscernible] and his team, they'll step-in and see it the same way as we all do. So, they're essentially picking up that feasibility in progress and tend to complete it obviously, and then use that as the backdrop to go back through the permitting cycle. Hopefully a cycle that will be shorter this time round as what we're told. But that's the gating item there. But I think there is a really good project there and it's one that's they are eager to push forward.

And so are you thinking the feasibility or you are expecting the feasibility would be complete by the end of next year then or earlier than that?

You're testing my recall now, Kerry, but I think the answer is earlier than that. It's something that was underway as soon as the [Indiscernible] got a snag this year, frankly, a lot of the work and the thinking had already been done by the team there. I wouldn't expect it to take all next year. I just don't of the top of my head remember the exact timeline, but it's -- I had to guess I think we're thinking certainly middle of the year, is not maybe even sooner.

Okay. Because I -- would I be correct in my recollection that they need that update feasibility before they can go back into the permitting cycle or correct?

Yeah. Look, I think that's absolutely fair. I mean, if you're going back to the permanent cycle, you need to show them what the difference -- the new project looks like. That's why I think that the timeline for that feasibility is actually quite a bit sooner, but I just don't have it at my fingertips right this second. But yes, they will need that fees to go back through the permanent cycle.

I got you. And then just last question quickly on Renard. Based on the quarterly average cared value that you are realizing there that they are realizing. It would seem that that operation is looking significantly better and I'm just wondering when you're going to bring it back in, and start receiving the GEOs from that operation?

[Indiscernible], things are going well there from a diamond price perspective, we didn't put it in the press release, so if you didn't catch it in the MD&A, the last sale I believe was 104 U.S. in change. Frankly, for a smaller set of diamonds, not as good quality so, they are getting good result. The Company is building up some cash, has been for a little while, so that's all positive. Renard is something we've been working to get back -- to get value back on for some time. Currently, as you've pointed out, I think [Indiscernible] where we're really distributing our stream proceeds back until April of next year. That's something we spend time on Kerry, absolutely and we'll come back to you in the market when we have a better solution there for us. But as I said, really positive results. Things are looking better there than we'd expected and well, there's a purpose of us sticking around and that private goal was to get back to our stream value and that's our objective.

Okay. But that you are going to the April 2022 timetable of just keep reinvesting the cash, so I guess?

Not necessarily. This is like the mark that they're right now. And having those discussions all the time really. But obviously that -- every sale has continued to bolster the treasury, and so we're having those discussions all the time.

Great. That's great. Thank you very much.

My pleasure, Kerry.

And your next question comes from Ross Cardon from Polygon. Please go ahead.

Hi, guys. Just one for me on the diamond price list. I saw the commentary in the MD&A. Is that more quality driven or market driven? Because it looked like a pretty healthy increase. I'm just trying to put it in context of what we see from other diamond producers, which have seen smaller, but this looks like a pretty of a jumpstart. I know it's also run, but produce if you're having color on that.

Yes. Hi Ross. The quality -- in fact, the quality of Renard diamond hasn't markedly changed. In fact, if anything, in that last sale, as Ed pointed out, maybe not well. It was a worse set -- a worst batch, if you will. So it was nice to see the uplift even with that backdrop. So I think it is really a market impact in that scale of diamonds in that band of diamond quality and sizes. I think now we have formally seen the last of the [Indiscernible] batches hit, which is a set of diamonds that's very comparable. So I think there's a bit of that production in stock, but I think we're seeing the last batches hitting that, so promising that market is strengthening the way it is.

Okay. Now, that is interesting. Okay. Thank you. That was it.

No problem, Ross.

And there are no further question at this time. I will turn the call back over to the presenters for closing remarks.

Thank you, Operator. And thanks everyone for taking the time. Again, our apologies. If you missed out on the front bit, if there are any further burning questions, you can reach out to us anytime. We're very proud of the status of the Company right now. Proud of the quarter, proud of the asset base. Happy to talk to you about it at any point in time. And with that, maybe just one small note, obviously, tomorrow around this time, Remembrance Day, so on behalf of our whole team and obviously everyone listening, I'm sure we thank those who have fought and those continued to fight to defend our way of life. It's easy to get bogged down into your own issues but hopefully tomorrow, during that moment of silence, people take a second to focus on the bigger picture. So, stay healthy, be well and enjoy the positive Gold day. Thanks everyone.

This concludes today's conference call. You may now disconnect.