OR Royalties Inc. (OR) Q4 2021 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q4 and Full-Year 2021 Results Conference Call. After the presentation we will conduct a question-and-answer session. [Operator Instructions]. 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 the meeting over to our host for today's call, Mr. Sandeep Singh. [Foreign Language]

Thanks very much, Operator. Hopefully you can hear me okay. And thanks, everyone, for joining us this morning. I know it's a busy end for the week; a lot of people reporting, so thanks for taking the time. We'll try to go through the prepared materials reasonably quickly, leave enough time for questions. And please note if you don't already have it, the deck that I'll be walking through with Fred is on the website and we will be making forward-looking statements as we talk through it. Jumping to Slide 3, just in terms of a very high level recap, we had another exceptionally strong quarter. Our assets continue to perform well, and provide significant catalysts that are playing out, which will touch on some of them as we go through the document. But in 2021 80,000 GEOs earned gold equivalent ounces, as you know, that was pre -released. That includes contributions from Renard, which again, we will talk about later as coming back online this year, resulting in record revenues of just sigh of $200 million Canadian record operating cash flows as well. This year, we expect significantly more ounces. We'll still have a very high and frankly peer-leading margin at around 93% that coupled with still a strong gold price here today, certainly volatile, but higher than the $1,800 an ounce we average in 2021. Should lead, we expect to continue to records on a number of fronts. There was a little bit of noise in the financials, mainly resulting -- stemming from a non-cash impairment in Osisko Development of the tune of $48 million in the quarter. But really, those were legacy assets in the James Bay Area accrue loan and in Guerrero. So exploration stage assets of the company is not focusing on -- and feltis relevant to take that down given their focus is on their other three main assets. Taking that aside, we earned adjusted earnings of $0.14 cents a quarter -- in the quarter, and $0.56 for the year. And Fred will walk you through some of the details of that later on as well. As you know, we increased our dividend amid volatility in the middle of the year. We then followed that up with a pretty significant [Indiscernible] program, buying back over $30 million at $14.64 per share on average. So we'll continue to look for those opportunities. The company is in great shape. Cash flow will grow this year and will continue to balance that between dividend growth, buybacks when there's volatility in the market that forces us to [Indiscernible] opportunities to buy stock and growth. Subsequent to Q4, we did announce through Osisko Bermuda acquisition on the screen with a range of $20 million to $40 million, and on the high-end, 5%; on the low-end, 2.5% of the metals. From the [Indiscernible] property that Osisko Development is in the process of acquiring -- Sean Roosen, our Chairman, is also on the line and in the Q&A if there are questions that drift over to the [Indiscernible] side that I cannot answer, he will be available to help with that. So that's just a quick snapshot. On Slide 4 graphically depicting what I said earlier, which is an asset base that is outperforming our expectations and really we're just humming at this point. As I've mentioned, 80,000 GEOs for the year ended the traditional split that you've gotten accustomed to seeing from us of about 75% gold, silver, making them the most of the remainder that's obviously when we exclude the time announces from Renard. That was a 97% margin. It also was right in the middle of our guidance. That's not a typo, it is pretty much exactly held in GEOs right in the middle of our guidance, previously reported. And I think that's worth stopping on or pausing on a little bit. I think that frankly, it was a good result. Especially in Q4 where we saw not just our operators, but operators across the sector having continued issues with supply chain. We spoke as soon we felt that with one of our minds in the Yukon. Obviously, the Omicron positivity rates skyrocketing from mining companies as they have for the population at large, so that has added complications with respect to quarantines and absenteeism. So it didn't feel like that was on the gas. In Q4, in the mining sector, still having achieved the midpoint of our guidance, certainly felt like a win. On slide five, we have come out with our 2022 guidance, as well as a five-year outlook for the first time in our history, which we hope will be helpful to people that they understand the growth embedded in this company. But on the guidance side, on slide 5, first and foremost, we are guiding to 90,000 to 95,000 ounces of GEOs for the year at a 93% cash margin. Routing some more streams to that mix than last year, again, with the reinstatement of Renard, but takes the margin down a little bit, but still quite high, which implies 12.5% to just shy of 20% growth for the year. Pretty material step change for us. I would say we expect Q1 will hopefully be the last quarter where we hover around the 20,000-ounce range. Excuse me, where we've been for most of 2021 before that risk fact growth really kicks in. And the reasons for that are pretty obvious. We've got the expansion at Mentone that's underway. It's tying in as we speak, so clearly, they have to go through that tie-in process. And then there's also, as you've heard me say, number of times delays of a couple of months there in terms of when they produced and when we received. But once that flows through, then we're often running. You'd also remember that for Eagle, in the Yukon, Q1 is always a lighter quarter from a winter perspective. They're going to have eventually get through that and have a bit more consistency. But we do expect that to be the case, especially given some pretty extreme weather this year on the West Coast. We also have some smaller assets like Santana and Aratana (ph), which are ramping up. We have the San Antonio stockpile, which is producing and will start generating ounces after [Indiscernible] this year. And then the biggest other contributor to that SQ-Q1 in the rest of the year would be Renard. We're not switching back that stream until May 1st. So not giving ourselves the credit for those ounces or those GEOs in Q1 primarily. So again, hopefully that's kind of a Q1 that's in line with what you saw from us last quarter, maybe a little bit higher, but we will see, and then significant growth is starting as early as Q2 and for the rest of the year, which should bode well. I think just on a couple of points, maybe Renard related since that is a big addition to this guidance versus last year. And we're very pleased to be able to bring that back into the fold. We said it was a priority for us. I think now is the time where we can credibly do that, and have the mine and the Operator continue to be in a healthy position. To point to that, we emphasized that in December, I believe. It was late in the year. [Indiscernible] paid back half of the working cap facility to its partners, including us. Our piece of that was just shy of $4 million. We expect the rest of that working capital facility to also be paid back in the near-term, but just done in a stage manner for prudence. And some of you may have picked up in our MDNA that the latest selling price was quite high; $170 per carat, roughly. We're not pricing that in for the restart, if you will. That was quite a bit higher than the reserve price, which was more in line with previous sales. But I think you're seeing quite a bit of demand increase, especially on the smaller scale diamonds, which helps us. And frankly perhaps quite a -- probably some speculation or more than some speculation, which is more of a short term phenomenon. But either way, very pleased with the health of that business right now. And it's the right time to turn things on. We'll see if what sanctions which I was reading about at El Rosa, which currently are more about providing equity and debt. But sanctions overall, mean for diamonds likely a boost there as well in the near term. But frankly, I think that's second and third order. It is -- I will point out it is quite sad seeing what's happening in the Ukraine, especially given the strong and proud Ukrainian population in Canada, in Toronto. So hopefully, that doesn't end too poorly. It is, again, not to go out too much with tangents, first time and my young kid’s lifetime where they're old enough to ask questions about that war. So it was all pretty sad conversations. I'm sure you're having some of them as well. On Slide 6 in terms of our outlook, to turn more positive, this is our inaugural five-year outlook, and its successful growth in our minds at 10% to 12% CAGR for the five-years dating -- starting from last year as the starting point, is pretty massive for a company our size. Worth pointing out, if it wasn't obvious that that is all organic growth. We're not including any potential acquisitions in there. All that would be external and additional. Other things I would point out. And we've tried to guide what assets we see coming into those. It's non-exhaustive, I mean, for instance, in 2022 there is that San Antonio stockpile? Just not in a bar. There's a couple of other things. Same for 2026. There are some other assets that are contributing there, but they've shrunk year contributors are shown. And then beyond that, there's a significant amount of optionality left in the business, and I think frankly, the back half of our decade is also spoken for. The other things I would say is when you looked at the contributors, we've included a timeframe, San Antonio and the Cariboo, obviously held by Odev Windfall auto is [Indiscernible] back forty. Those would be the biggest chunks there other than increases from our existing mining assets. One of the lenses we used or the screen that we used was -- certainly there's permitting timelines that are embedded into those assets coming along. We've tried to be conservative as always a slippery slope, but we've tried to be conservative in terms of delays there. But what we haven't done is overlaying financing risk with permitting risks. And so there's other assets, other partners of ours who have guided towards being in production by that timeline. But where we felt that permitting risks was compounded by -- a financing plan that wasn't yet crystallized and needed more time for clarity. We left those aside to let that play out. And we felt that was prudent. So we certainly expect there's other things that will happen, five years is a long time that will start to shift some of these assets around, hopefully in our favor. Last year was a year where we saw a number of our assets end up in bigger counter parties. We expect that trend to continue given the quality of our asset base. So there can be movement. But either way, we thought this was a pretty impressive growth profile, one that we are quite proud of. Other things I'd point out in that optionality bucket and we can come back around for this in the Q&A later. There's minute speaks to that movement, if you will, just yesterday we were reading and haven't had a chance to follow up with them, but there is a lot of news and that Emiko portfolio -- Emiko press release to bite your teeth into. But one of the things that we took away as they're guide -- not guidance, but their view that in 2024 there could be another 100,000 ounces of additional production coming from things like [Indiscernible] Akasaba West, which is obviously a Goldex satellite, excuse me, and Odyssey internal zones. And those are all assets that we have between the 2% and a 5% NSR. So that's not embedded into our thinking yet until we get more visibility on it. As well, Casino, another very chunky asset for us, where the timeline is a little bit unclear as of yet, but significant progress being made, including the government of Yukon committing to spending $30 million on road construction that benefits the mine over the next couple of years. When you look at Hermosa, where the feasibility study fell late last year, finally after a bit of a delay. They're guiding to a mid-2023 production decision and 2027 production. So it's just on the other side of that. That's another 5,000 GEOs that can come into focus, even excluding the Clark deposit. Pine Point, we expect the feasibility study this year, and the timeline there will come into focus. So -- and then again, Upper Beaver, waiting for what synergies mean between Agnico and Kirkland now that the merger's closed. So clearly, that was one of the emphasis ' of their press release yesterday. A lot of good news, some other assets there that we haven't included, be it Hammond Reef, [Indiscernible], Oracle Ridge, where there's some pretty sexy drilling on the copper side in Arizona going on. So I feel like we have an abundance of riches here that are going to take shape over the coming years. On Slide 7, just again, this is not new to you, but we're pointing out that a lot of that growth, most of that growth is still in the Americas, still in the right countries, if you will. And this is always important in mining. And frankly, given what's happening, basically, and generally happening around us in the mining sector. I don't know if there's ever been more so, certainly we feel comfortable with where that growth is. And who is being unlocked by it frankly. On switching to some of our assets on the Canadan Malartic side, obviously that stories continues to get better at 2021 was a record up from a production perspective. Sorry, it exceeded guidance, I should say I have to go back and check those record. But certainly based on this GEO chart pretty close, if it wasn't, so that's good news on the open-pit side. And we've factored in importantly the guidance that we had already received from the Yamana and then updated yesterday from Agnico, where there is a slight dip over the next couple of year before things rev up again. So that is worth pointing out is in our guidance. More importantly, on the Malartic side on Slide 9. The underground story continues to strengthen from a pure progress perspective. The headframe is complete, the collar is complete, the shafts thinking is meant to be starting later in the year. We will then take four or five years to finish the shaft. And to the underground development, obviously, there'll be production as early as 2023 from the ramp. But all of that is progressing well and on schedule. there was a small increase in resources this February. But I'm only analysis importantly, they were the first indicated ounces as well. But most of the work last year was on infill drilling and some extension works so we weren't expecting a big increase. What we would expect is with another kind of similar amount of drilling and last year another 137,000 meters this year, 15 rigs currently spending. We would expect a lot of work to underpin resource growth in 2023 a year from now. And the Operators, at least one of them are certainly guiding to the potential being a likely for an updated and increased mind plan thereafter. So further -- a lot of further good news expected on this asset. Our flagships already good until 2039 based on less than half of the current resources. This will story I continue to strengthen, and when you think about the camp. That are founder’s kind of restarted here. Between 2011 and 2021, there's been almost $7 million ounces produced. When you think about kind of the mid third -- 1930s onwards, that's closer to 14, 15 million ounces. And today there's 20 million ounces there almost and it's growing, and will grow in leaps and bounds. So you're looking at a camp. Those produced and currently sits at 34, 35 million ounces, went a long growth, which is -- puts it in pretty rarefied air in terms of mining centers in the world. On Slide 10, with respect to some of our other assets, and I will try to go to the next slides quickly. As I did mention, I'd try to be quick. On [Indiscernible], that's another really good story for us, you've heard me talked about it, the ramp up there from 4.3 million to 7.3 million tonnes is being tied in as we speak. That will take our GEOs from about 9000 to 10000 ounces a year, gold equivalent to 16. This year, we're kind of expecting half of that, that less than half of that increase, given the dynamics I mentioned earlier, for a ramp-up perspective, and then next year on, it's off to the races. You've also heard me say that the only thing that asset was lacking was visibility. And with the merger with Capstone announced in late November, meant to close I think in late March, that visibility is now on there, including first technical report in modern times, and a lot of positivity around that asset, including the combined group now talking about another expansion. The first one is not done or the current ones not done. And they're talking about another one to 10 million tons for a pretty de minimis amount of Capex. And we would expect them, certainly. We wouldn't be surprised to see some of that commentary play out as soon as the deal is closed in March. That would take our ounces up significantly and turn this into another flagship behind Malarkey. Which I touched on earlier. Nice to see the ramp up in H2 in the second half of last year. Expect that to get finished this year, they're already moving on to project 250 to get to 250,000 ounces during calendar year 2023. And we look forward to them getting back to the exploration side of things in a more earnest way. Yesterday, they've pronounced -- they pronounce, they announced the first amount of deeper drilling since I think it was 2017 on the pits and cells, which we're quite interesting, some intercepts to point out a 175 meters at 1.2 grams from a 150 meters’ depth, 50 meters up 0.8 from 400 meters’ depth. Early days, but nice to see the grades increasing at depth. So we've always thought there is the potential to expand the pits deeper. That's on top of the satellite potential at properties like Raven, which we think are quite productive and prospective, have been backlogs from an asset perspective, but we think Victoria is on the cusp of catching up with some of those backlogs and coming out with some pretty interesting drill results. [Indiscernible] was nice to see the reserves increase after resetting the bar over the last couple of years like to see them growing back with a 44% increase in reserves. And CB likewise, net of depletion, and 18% increase in reserves. Feeling like, certainly based on their commentary, that they're going to be getting ready to talk about growth at CB, whether its mine life extension, or on top of that. So that asset looks like it's in good shape. On some past 11, but I think the story would be the same with you talked about island and site-level [Indiscernible] talked about some of our other assets, but in the interest of time, I will move us to Slide 12 and comment on some of those growth assets underpinning for that five-year outlook. Starting with the assets within Osisko Development Cariboo and San Antonio. Some of you have listened to Sean's call just ahead of ours. It's a milestone rich year for us on the ODB side with Cariboo going through feasibility study, permitting bulk sample that will be run through the ore server, all that tracking really well, with respect to timelines with the usual kind of to - ing and fro - ing. The [Indiscernible] Tijirit acquisition, we're all quite excited about. And certainly the catalyst that is provided to help finance the entirety of the asset base is quite impressive with -- I think by the time it's some time over $230 million Canadians, which will [Indiscernible] been raise, that will dilute our ownership in Osisko Development as we did not contribute from 75% to 45% pro - forma, when those deals closed. But importantly, is dilution for the right reasons, we're quite happy to see that assets come in. The funding that followed to now look -- to now go after those assets in a meaningful way. On San Antonio, I mentioned earlier that the stockpile is now under leach, are starting to be under leach. So that will start to trickle some benefit to us and to Odev. The work there that's gone on over the course of 2021, and that's continuing now. And the new slogan (ph) will stem from there, kind of under blinds and underscores what the group thought, we would see there in terms of potential, both oxide and sulfide, so we look forward to that story playing out over the coming months. But all that goes well. And the next key milestone there will obviously be the permit on the bigger [Indiscernible] project, which will drive timelines from there and open -- that is something that can happen second half of this year, windfall within Osisko Mining is a pretty stellar asset. It's the sizing grain combination there with 3 to 3.2 million ounces M&I at 10.5, almost 7 million ounces total still growing, still new discoveries we had, like golden there, which they started to poke into. That's a pretty special asset in the right locations. So we're looking forward to the feasibility study. Adding more meat on the bone again this year. The endorsement from Northern Star on that convertible financing was obviously a shot in the arm. The joint venture itself obviously been terminated, but I think what you see there is a market that's frankly changed. The scarcity value of an asset like Windfall and I don't know what other assets are like Windfall. Is pretty special. And so we look forward to seeing that story continue to grow, and evolve, and take shape over the course of this year. With Upper Beaver and 8-k, where the Kirkland Lake camp, which was within previous Agnico, will now be benefiting from the new Agnico infrastructure that came over from the Kirkland side. There's a lot of good things happening. Again, as I mentioned earlier, we look forward to seeing the Upper Beaver synergy timelines so that we can factor into where it fits in. Is in the next five years, and just on the cost or on the other side of it. That's what we're waiting to see there, they've talked about in their presentation yesterday. I think they've described it well; I think it's on the stage. As 150.000 to 200,000 ounce per annum type assets of 3,000 or 4,000 GEOs for us. They also talked about 8-k potentially being in production as early as 20.4. So just drifting over from Mikasa at the 40,000 ounce per year rate. That's another [Indiscernible] GEOs for us. We haven't factored in anywhere. And as I mentioned, just a lot of good news there as they get their feet under them as a new Agnico emerged, Agnico Kirkland. So we look forward to that story unfolding for us. And then on Back Forty, which is a significant contributor to us on the current -- closer to the backend of that five-year outlook. Expecting a feasibility in 2022, we agree with the plan that Gold Resource is following of that smaller open-pit, bigger underground, less of an environmental footprint. So we look forward to seeing them go through those steps. And as I mentioned to you earlier, we think we've embedded enough potential delay to still be on the right side. I'll jump ahead just to get things over to Fred a little bit. You've seen these transactions for from us on Slide 13, we think they are all really good contributors Spring Valley. We've now seen [Indiscernible] sell one of their assets in Nevada for 200 million U.S. This is bigger and I think they've unlocked a lot of value on this asset, so we look forward to some more clarity maybe even as early as this year. TZ, we're very happy to have gotten in on that assets and have G Mining advancing it's -- with a construction decision this year. And the West Kenyan royalty that we picked up on north of a million ounces. A very high-grade looking forward to an exploration update there in the very near term as well. Last live that I will talk through on 14 is that synthetic acquisition, and I think you've heard from both strong line on it quite a bit. So if there are more questions, we can deal with it in the Q&A. But quite happy to have that asset within the Odev portfolio here in the near term. Happy as well to have a structure to stream on it. We gave a range and obviously, the equity financing thereafter was upsized quite a bit. So we'll see where we fall within that range. But either way, 2.5% to 5% of the metals stream there, which we think will be a significant contributor. Obviously, the disclosure needs to catch up. It was held in private pans. They didn't need 42 [Indiscernible], they just were mining it. But the new high grade -- ultra-high grade discovery there in the T2 - T4 zone is quite special. We look forward to seeing it evolve. But when you think about 2,300 samples collected over a 200 plus meter strike length. Returning nice, we got a ton gold plus a lot of silver, so that all go to well. So adding some capital, adding some modern mining techniques, the technical team behind Odev to that, I think is going to take this asset, this mine to the next level, and we look forward to seeing the news flow and the picture be painted then. And frankly, not just the Trixie portion of it. It does sit on 17,000 acres, 14,000 of which are patented and very productive mine industries, a lot of head frames and this zone was I think something like 44 or 45 feet away from Canaccord's mining in the mid-90s and they never stumbled upon it, so there's a lot of head-scratching to do and a lot of revisiting of that land package. Both from this mines perspective, from a hybrid perspective. Base metal polymetallic potential, as well as copper porphyry potential, which is what Ivanhoe electric is chasing on the batteries. So that's turned out, I talk to longer than I expected to, which is normal. But with that, I'll pass it on to Fred on Slide 15 to walk you through a couple of more details on the financial side, and then we'll conclude with Q&A. Thank you.

Thank you for Sandeep [Indiscernible] Good morning, everyone. Thank you for joining us today. As discussed by Sandeep, 2021 was a very good year for us in line with our expectations. We have met our guidance with strong deliveries from our partners, despite some challenges with COVID for some operators. And our results have led again to record revenues, cash margins, and operating cash flows from our royalties and streams business. If we go to page 15 of the presentation, we recorded record revenues of 199.6 million in 2021 compared to a 156.6 million in 2020. Cash flows from operating activities were 106 million on the consolidated basis. For the royalties and streams segment alone, cash flows from operations have reached a record $153 million compared $214 million in 2021. On Page 16, we present a summary of our net loss and adjusted earnings. The consolidated net loss to Osisko shareholders was $23.6 million or $0.14 per share compared to net earnings of $16.9 million or $0.10 per share in 2020. The consolidated net loss was due to non-cash impairment charges and mining operating expenses incurred by Osisko Development in 2021. On a consolidated basis, adjusted earnings were $59 million or $0.35 per share, comprised of adjusted earnings of $94 million or $0.56 per share for the Royalties and Streams segment. And an adjusted loss of $35 million from Osisko Development or $0.21 per share. On Page 17, we have a summary of our quarterly results with additional details for the royalties and streams segment, including 19,830 GEOs in Q4 for a total of 80,000 GEOs in 2021. We generated gross profit of $35 million in Q4 to end the year at $139 million compared to $104 million in 2020. Operating cash flow was up $35.1 million, were generated in Q4 by our royalty and streaming business for a total of a $153 million in 2021. On Page 18, we have a breakdown of our cash margin for Q4 and the years 2021 and 2020. In Q4 of this year, the cash margin on our royalties reached $34 million and the cash margin on our streams amounted to $12.7 million for a total of $47 million in Q4. Which brings the total cash margin for the year to a record $187 million. On Page 19, we present the progression of the dividends paid to our shareholders since the creation of Osisko Gold Royalties over a $184 million has been returned at the end of December. In addition to $85 million used to repurchase a total of 6.7 million shares under our NCIB programs. And finally, on page 20, you will find a summary of our financial position. Our consolidated cash balance was $116 million at the end of 2021, including 82 million for Osisko Gold Royalties and 33 million for Osisko Development. Osisko Gold Royalties [Indiscernible] investments having a value of $255 million at the end of December, in addition to our investment in Osisko Development valued at over $400 million. Our debt was stable during the year, with over half billion dollars available under our credit facility, which was increased in last July and extended until 2025. We've also acquired a total of $2.1 million shares under our NCIB program for $31 million in 2021 we've also acquired an additional 250,000 shares in 2022, for $4.9 million. So in summary, 2021 was a year where our main assets has continued to perform strongly, and we have seen several of our partners announcing rate exploration results and expansion programs for the production. I will now turn the call back to Sandeep for closing remarks and questions.

Thanks a lot, Fred. And I think we can forgo the closing remarks and Operator open it up for Q&A list.

[Operator Instructions] we’ll pause for just a moment to compile the Q&A roster. [Foreign Language] [Operator Instructions]. And we do have a question from Mike Gentleman, from Bank of America. Please go ahead. Your line is open.

Hi Sandeep, Sean and everyone. Sandeep. I was just wondering with the -- when [Indiscernible] with Northern Star now participating as a joint venture partner and [Indiscernible] [Indiscernible] was on [Indiscernible] saying that he's going to builder on the [Indiscernible]. Was this potential for a streaming deal to finance, to help financial project for Osisko Gold Royalties?

Hi Mike, good morning. Certainly even before and certainly after that announcement, the team there at Osisko Mining can build this mine themselves. They are certainly capable of it. In terms of -- and then they [Indiscernible] wealth of our ways, make theirs. John has always been quite prolific from a funding perspective, he has, a lot of equity or the cash in the balance sheet, the number obviously will come into focus with the feasibility study later this year. You had a lot of opportunities in which we can go short answer to your question is, I certainly hope so, but I'm not going to hold my breath either. I think there's a lot of potential for John to fund that through the equity as more equity debt, etc, if stream comes into focus there certainly we'll be eager, it’s a pretty exceptional asset, and certainly, we trust the team that's currently pushing it forward. So too early to tell, I guess, Mike, but no shortage of options for them as they move forward.

Okay, thanks. Second question going to Canada Malartic. On the Yamana call, they said there's potential for a second shaft on a project. Also, I guess to the East, as you know, mineral -- you can see it on your slide, mineralization plunging to the east. And just wondering, what do you think of that? That should be positive for your royalty. More production.

I like it. This might be the only conversation I guess I missed. That's my bad but I usually do mention that. What I was trying to guide to is just that. This year we expect the ounces to grow significantly over the course of this year; last year, the focus was infill drilling. There wasn't enough extension drilling closely enough to add to those ounces. We think gold will complete that exercise. When you think about the infill drilling, it's going to unlock more of the resources that currently are in the mine plan. And remember, there are only half of the current resources are on the mine plan, less than half now. And then, so that will add at the very least mine life. Then when you add in those extension, but extension of work, especially from goldie, that will add ounces we think in bunches of millions, given the continuity there. So I think yes, every time we've heard at least one of the operators talked about it, there's a comment that at some point you're going to stop just adding decade to mine life and think another shop conceptually, and put more through the mill that alone we'd be at a third full. So that's something we certainly look forward to. If I had to guess, I would say this year is a resource growth year. Next year that I just put into a revised mine plan. Either way, their success coming there, it's either coming in the form of material additions to mine life. More likely than not, it's coming in the form of additional ounces. And when you think back, was it a year-and-a-half now? Maybe not -- maybe a bit more. The story was uncertainty as to whether the partnership would build the underground. So then it was -- is there a gap year or more, between the open pit in the underground that's now gone. It's turned into a little bit of a dip. I think, if you fast forward a year, again, that dip will turn into, at least, flat production where the mine continues to produce at its current types of levels. So yes. Short answer is, I would like to [Indiscernible].

Okay. And then just lastly, if I can put Trusz, Sean to work. I was an only OG the conference call and a top minority all. Just wondering, Sean, what do you envision for production from Cariboo in San Antonio. Thanks.

Sure, Mike, I'll jump in. The profile right now is if BL2 On the Caribou project is in production, we expect 20,000 plus ounces this year. The QR mill is up and running. We have a bulk sample plans to go underground here in -- starting here in Q2. And then the transition, we're looking for the [Indiscernible] approval and early works permits to come out probably by the end of 2022 for the larger Cariboo project. And we would start to portal and hopefully get underground account mountain and have some trend -- transitional material going to the QR and continuing to optimize our [Indiscernible], but we'd be looking have the full concentrator built out as well by the 2024 and set the table for at least the production of 180,000 ounces a year. Coming out of that, and we increased that mill production from 4,000 and 47,050 tons a day for those. So we are setting the table for a larger project there, Mike and we continue to see that evolving and certainly the work that we did in 2021 has encouraged us was a 152,000 meters drilled in there. And this project continues to strengthen San Antonio. We are in production rate now, with the stockpile, we have 16,000 ounces, you get a 1,000,000 on stockpile. We want to recover in the short-term. And via the full permits for the [Indiscernible] open pit is underway and we hope to have that permit available to us by the end of Q4 of this year. And we have a 15,000 ton-a-day plant that we purchased earlier that's on-site. So we'll be looking to ramp that up. $10 to $50 -- $10 to $25 million investments, depending on how aggressive we get in the early days. So two small-scale productions on-the-go there plus the [Indiscernible] asset. Hopefully we'll close that up in this quarter -- sorry -- in Q2. And they are in production as we speak. So we would have three small-scale producers by the end of 2022 transitioning to much larger production through 2023 and 2024. So I think we've set the table pretty good for that one, Mike.

Okay. Well, thanks for that. See both of guys in the lobby bar next week. Thanks. Take care.

Alright. [Indiscernible]

Thanks [Indiscernible]

Our next question comes from Puneet Singh from IA Capital Markets. Please go ahead. Your line is open.

Hi, Puneet.

Hi. Good morning. Just that Renard since going to contribute again. I see last year, they sold about 1.8 million carats. Is that the run rate for production on an annual basis we should look forward to? And also, if I'm recalling correct, most of the production was coming from those higher-grade R2, R3 areas, and then it will go lower grade later. Is that still the plan there or what's the latest update now that asset is doing better?

Yeah. Look, I think I would say some variability is normal, but I think that run rate that you're looking at for 2021 is probably about right, at least for the next few years. They're down, I think it's around the 600-foot level. You're right as well that as they get lower there, the grade will drop a little bit. I don't have the numbers off the top of my head right now. But I think, for the next several years, we've got a mine plan that will be pretty steady thereafter. I believe we'll see -- they'll what the gold price looks -- sorry, the diamond price looks like and decide where to take the development from there. And there is also still some exploration upside there, Frank. So I think, for the third part of your question, yes, while we were relatively steady, the biggest change will frankly be the biggest variability and will be how we turn those carriers into GEOs, if you will. But we tried to be conservative. And then thereafter, our primary focus is turning stream back on, which is job one. And then with the cash they are building up right now they can start to look forward to the future. It's been obviously tough for them living hand-to-mouth for a little while for the last two years. So it will be nice for that team to have some more flexibility.

Okay. And do you think they'll do more larger scale experlation probably in the next couple of years, but it run for a little bit, get more cash, and then I think go from there.

Yeah. Look, I think the idea is walk before you run, but I can tell you that even with the diamond prices that they were benefiting from before, there has been -- there currently is some exploration work going on. So when you take when you zoom out a little bit, the payback top working cap facility last in the last year, they will probably pay back the rest of it this quarter and process. They've also been doing some not major, but some exploration work in particular into those lower zones to firm up those grades and hopefully tighten up some of those grades. So yes, they are doing a lot of good things and certainly the line is night and day from where it was when pre -Covid and diamond prices hit a low. We're averaging $70 a carrier hit some lows in the mid-60's, so what a difference a couple of years maybe.

Yeah. Definitely, it's glad to see it going to contribute again. Thanks, Sandeep. No problem.

Thank you.

Our next question comes from Joshua Wolfson from RBC Capital Markets. Please go ahead. Your line is open.

Thank you very much. Good morning, Sandeep. Had a question on the guidance for 2022, the numbers at least relative to our forecast were a bit better. Part of that's Renard and the diamond pricing. And I was wondering what the remainder components would be? Manto presumably is a portion of that. I'm just wondering if you could maybe reference what contribution year-over-year charge you would it from [Indiscernible] given it is a ramp up here. And then if there are other key assets that would be helpful for us. Thank you.

[Indiscernible]. Good morning. Look, I think there's skew things going on in 2022 versus 2021. One just take a step back. Take a step lower before we talk higher, we've as I said earlier, we've taken into account the guidance from Agnico and you're meant on Malartic, it's actually a touch below, so based on their numbers, we'd expect about 3 -- 3,5000 less GEOs in 2022 versus 2021, just the normal variability and mine sequencing of that mine. So we got to get those ounces back first before we get to the growth. So it's a pretty impressive that we can have this guidance in front of you. So yeah, outlook Renard, even from May onwards, is it chunky contributor to that growth which is great to have back? Mantos you pointed out is -- we haven't given an exact -- it's not an exact science, so we haven't given an exact number, but we're kind of guided to halfway between that current run rate and the 16,000 ounces’ post-expansion of GEOs. So that will fall in between. There's also the additions of San Antonio -- sorry -- Santana and Ermitano, which are small but hopefully will work their way towards their thousand ounce per year steady-state contributions. The stockpile from San Antonio will contribute. The Eagle ramp up we think will conclude. So there's a number of things, many of which are on existing assets, but then some new assets that are starting to contribute, as well as some BL2 ounces in there. So that's generally the makeup of that difference and we feel pretty excited about it.

Okay. And maybe specifically on San Antonio. Is there any way you can kind of quantify what would be reflected within the guidance for that asset?

Well, I think that's up for worth it as [Indiscernible] I mean, I think the stockpile is kind of currently starting to percolate, talked about first Gold [Indiscernible] in Q1, early Q2. So we'll see what the ounces are there. It's not going to be a major contributor to us, but there will certainly be nice to get from that stockpile. Sean, I don't know if you -- obviously on, but what was the number? I think it was kind of --

That was 16 times ounces of gold out. Seeing 16,000 ounces recoverable in that stockpile and present. Hopefully, we'll be able to get that done. And then, if we can get some early contribution from [Indiscernible], the main debt, we've got an option to maybe put a little more on the pad, but that's where we are right now until we have a permit on [Indiscernible]

So it's a nice contributor. Just the stockpile alone. And obviously, the bigger milestone there is the permit that will survive the timing of that will drop when the [Indiscernible] ounces can start to contribute, which are obviously [Indiscernible].

And then on the Trixy acquisition or stream funding, there was a range that was provided, which I'm assuming. What's contingent dollar with the funding. Was it Odev would raise with Odev's funding having better visibility now, is there any third perspectives you have on what ours contribution would be towards that stream?

Well look, I won't I won't put Sean on the spot, I think from our perspective, we were quite happy with as much as we can get, but even on the lower bound, I think it's a great result for us that they were able to go out there and raise as much as they did. We thought the asset once people started to understand it, would resonate, it certainly happened a little bit quicker than I think any of us expected, so regardless of where it is, obviously you're right. Bill was more equity raise, so it wouldn't be a shock to be on the lower end of that. But regardless of where it is, we're very happy to have that contribution to us, which we think will contribute for a lot of years, once the picture gets filled in. And then obviously the bigger impact for us is on our equity ownership, in our dev which we're also quite pleased without. That will come into focus as the transaction gets closer to close. But you're thinking along the great lines I would suspect. Josh.

Okay. Thank you very much.

No problem.

Josh, for my side. I think any royalty on this property is going to be important.

Our next [Indiscernible]. Our next question comes from Don Vice from Paradigm Capital Markets. Please go ahead. Your line is open.

Hi, Sandeep, and apologies if I have something that you covered. I joined a few minutes late. But with the cost consolidation of ODB end-year results, it currently, obviously, drags down your performance of the royalty business. Now that this financing has diluted, do you under 50% --will you be reviewing whether or not to unconsolidate ODB in your financials?

Hi. Don. No, we didn't in fact cover that, so new ground. Look, I think first things first, we are not diluted today. It's a lapping but disappointed out, we still own 75%. The transactions are closing, are leaning for third closing in late March, maybe drifting into April, but that order of magnitude. And there after will be down as you point out, the 45% level. So this is kind of what we had always said is we were going to let the market finance ODB obviously quite happy to get scream on the new acquisition that's our business model. But overall, let the market finance ODB and Sean has been very prolific at that in his history and certainly with with Odev. So with that, we are miles -- we will be miles ahead of where we were, if you will. At 75% it was tough to talk about that, although we talked about it internally. At 45%, I think we're a lot closer. I've been clear, I think, with everybody as well, that there's no bright line at 50 -- there's no bright line at 50, nor is there a bright line anywhere, so it's a combination of things. We talked about with our auditors and amongst ourselves. But a lot closer. So I think that's something that we'll continue to talk about internally, and when the right time is, we'll come back and tell you. But certainly we know that that's a hiccup. To say the least, it does provide a bit of noise. At the end of the day, we've done our best to segment that information, but I fully realized on that until we can we cut that Tether off of financials perspective, it's going to be finished. And certainly, you can expect that all of us on the OR and Odev side are conversant and motivated about it.

Okay. Excellent. But you have definitely being doing what you said you were going to do in terms of letting Odev finance itself, become a separate entity. And so, definitely good to see that, and heading in the right direction. Thanks.

Maybe a couple of pieces of color on that one, guys, at the financings that are underway close, plus the cash and the equity book. ODB should be sitting at about $320 million plus between the proceeds. The the financing cash on hand, and the equity book. And my goal, Don, will be determined ODB under our dividend bank company. Hopefully, we can turn that viewpoint around over the short term to near-term.

Yes, and no, the Equity could be a pretty important component for sure.

Thanks, Don.

Thanks.

Our next question comes from Trevor Turnbull from Scotiabank. Please go ahead. Your line is open.

Yes. Hi. Sorry about that. I wanted to ask about one of the projects that's in the five-year guidance and one that isn't. I guess the first is Back Forty. I was -- I could probably dig into it, but I haven't had a chance to see what Gold Resource Corp. has been saying, but are they pretty confident that they will be up and running within that five-year window? Or maybe just give us some color, Sandeep, on why you're putting it in the five-year window; why you feel confident in that project?

Yeah. [Indiscernible] Trevor. And good morning. I'd say look, that is obviously one that is going to be a bit trickier, but we think we've built in enough conservatism there on the permitting and that's the major item there, Gold Resource and ourselves see the asset in the same way and we were very happy to see them come in as our new partner last year. They've got a very similar asset in Mexico that they're currently mining and they want this to be their growth assets for a longer life kind of views as what's our currently Mining without the market cap cash, access to capital to build it. That's why we felt comfortable that they are the right group to do this with, clearly the permit is the hurdle. There's a feasibility study that's on track for this year. And that will form the basis to go to that permitting exchange again. Obviously, there were set back in 2021, frankly, with the plan that we always disagreed with. But ultimately it has to be running the ground with a large The drill open pit and smaller underground. I think the view was that we're too far down the track, the change that's why pencils have erasers. So we're happy with the new track. Smaller open pit, less underground, no need for a wetland permit, which is where they got bogged down last time. And without in place, we think we've added enough buffer that they can certainly build it within that timeframe. So that'll be one that you can continue to test us on as the permit picture unfolds over the course of next year. But we felt that was especially given that it's earmarked, it's all like we didn't highlight it. And all of us, I think we'll be tracking that progress over the coming year, 18 months.

Yes, it certainly helps that they're side-stepping the wetland issue if they can. My other question was really with Falco and the Horne 5? That's potentially a very material project when it does come to fruition. And just wondered if you could maybe talk a little, or maybe Sean can talk a little bit about some of the next steps and what we're really watching for to feel better about putting a pin on the timeline on that.

Yes. No, Trevor, that's a good point that I think frankly, both Horne 5 and Pine Point, which are assets that we quite like in our group of family, in our group of companies. We put them out for the time being. With respect to Horne 5 specifically -- and this is what I said earlier, is -- including in our family of companies and others when there was permitting risks we tried to account for, and obviously, all these assets and development space have permitting timelines, we tried to factor those in. But what we didn't want to do is overlay permitting risks with financing risks. So that's kind of what I was getting to, whether it's back 40 or certainly whether it's Osisko Development [Indiscernible]. As those chunky assets move forward, we see the line of sight to how financing comes together. When there's companies that have a financing hurdle that's a multiple of their market caps. We didn't think it was reasonable for us to factor them in until there's more clarity. So we do have in that optionality category, companies that are guiding production within the next five years. And certainly we hope they will. But we wanted to wait until we had that visibility before putting out inaugural. All guidance sort of not guidance but outlook on that five-year basis. So that would that would fall into that category. Pine point would be another there's several, frankly. So as there's more clarity, we're happy -- we will be very happy to ship those ounces forward, but we just thought we should wait specifically with your question of progress on product, I think they're making meaningful progress. Certainly on one of their two issues, which is the governing relationship with them and growing core who have the smelter on surface. They're working through what they call Onlia, which is an operating license, predict the [Indiscernible] agreement. And there's maybe progress on that, but it's a pretty intensive document, so it's gone from term sheets to final documentation, taking a little bit longer, but that's one key hurdle. And I think everyone is driving towards the same goal there. So eventually, that will get cleared. And then they'll move forward to looking to crack to financing that. But frankly, nine million ounces of gold equivalent is important. In Quebec, it's important. It's even more so important. And you're right, it's a chunky contributor to us. Again, perhaps such a chunky contributor, whether them or casino, 25,000-ounce year contributors, assets that I believe deserve to be built, which is a question of when so when you have those types of things in your back pocket, meeting only one of them to work. And we have a list of them that's a pre -humble (ph) position to be in.

No, I can appreciate that. And I guess you should kind of touch on what I was getting now with horn and that is you're still felt goes out the table trying to kind of hammer out the final arrangements with Glencore. I know it's always hard to talk for other companies, but do you have a sense of -- is this something that Glencore seems focus on or do you feel like this processes at all back - burnered by them or how would you characterize their intentions at this point?

I think it is the former, this is important to the health and future of one it is a very important asset for them at the warns smelter, which is what leads to delays and long timelines, but it also I think leads to an ultimate positive results. And even in my limited interaction there, I would tell you that I do believe they are focused on it, and it's important to them. Same token is a very large organization and they have a lot of other things to do. Many in most of them take precedence. But I would say despite that, I've been very pleasantly surprised at the how much effort goes into this file. And I would assure you that it is important for them and for us.

Good. Yeah, it's better to get it right than to be rushed on it. I appreciate it. Thanks.

No problem ever pretty complicated piece of business and you're right, you want to do it, right the first time.

Great. Thank you.

We have no further questions in queue. I'd like to turn the call back over to the presenters for any closing remarks.

Well, thank you, operator. And thanks for taking an hour with us on again, was a pretty busy day, but a great kind of day for us. A great kind of phase for us. One where there's an important amount of growth in the company and some of the best development assets in the business. So whether it's a growth on our core existing mines, our growth from the development pipeline. I think the cash flow generation and the diversification that will come with it in this company is going to be pretty special over the course of decades. Every year in between. So thanks for your time and be well. Thank you, operator.

This concludes today's conference call and you may now disconnect.