OR Royalties Inc. (OR) Q2 2022 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to Osisko Gold Royalties Q2 2022 Results Conference Call. [Operator Instructions] Please note that this call is being recorded today, August 10, 2022, at 10:00 a.m. Eastern Time. Today on the call, we have Mr. Sandeep Singh, President and Chief Executive Officer; and Mr. Frédéric Ruel, Chief Financial Officer and Vice President, Finance. I now would like to turn the meeting over to your host for today, Mr. Sandeep Singh. [Foreign Language]

Thank you so much, operator, and thanks to everyone listening in. Hopefully, you can hear me okay. Happy to be with you to update you on the quarter. It was an interesting quarter certainly from a market perspective, quite volatile, the swings were quite swift, notwithstanding that for $0.02 it's worth, I think the backdrop for gold that remained extremely strong even in the face of what's been a very strong U.S. dollar and rising rates. Regardless, even in that volatility and maybe as a result of that volatility, we still had a record quarter on a number of fronts. As I update you on that, I will be referring to the presentation that's now on the website, and I'll jump right into it after reminding people that I will be making forward-looking statements as shown on Slide 2. We can probably jump right to Slide 4 entitled Q2 2022 highlights. As I said, I won't read through all the bullets. I'm sure most of you, all of you have read the release and already commented on that, frankly. But a record in a number of fronts, first and foremost, which drives our business is the geo deliveries, the ounces that were delivered to us by our partners, gapping up nicely from Q1 to Q2 to 22,200 GEOs. That makes the first half of the year just roughly 40,500 GEOs delivered to us. And I'll talk about our guidance on maybe the next slide of 90% to 95%, but we do expect a significant uptick in the second half of the year, at least sequentially over the next couple of quarters. for reasons that I'll go through, but hopefully are relatively obvious when I do. So that bodes well, a record in terms of GEOs, a record in terms of cash margins and a strong bottom line in the quarter and a better, stronger second half for very obvious reasons in front of us. I will point out perhaps maybe just make one obvious point from those people. Our financials are still a little messy. Obviously, we consolidate with the Osisko development. Most of you know that. And we have tried to provide additional information for that on a segmented basis. We do still realize it's a work in progress, but I will say that we're close and we're closer than we ever have been. But ultimately, Osisko development is doing what they should be doing as a developer. They're spending money advancing their assets. NOR is doing what it does, which is racking up cash despite an inflationary market out there. So putting the two together, slapping two together, I think, can lead to some misleading statements. So hopefully, people were giving you the information that you need to differentiate. And if you look at one of those bullets, six or seven from the list, those adjusted earnings for the Royalty business for Osisko Royalties amounted to just almost CAD 26 million or CAD 0.14 a share that's the bottom line, that's the money that we accumulated over the quarter and hope to continue to grow as the year and the years progress. We also worth pointing out on this page repaid our credit facility in full. That credit facility is now completely undrawn and available for growth as we go forward. Hopefully, growth into a market that is kind of leaning our way as a financier with some of the other taps in the market that closed or significantly reduced. So I think that bodes well for us in terms of the types of opportunities that will come our way. Otherwise, a standard quarter, we also announced a binding letter, a binding deal on the Tintic's stream that we had already bought to you and commented on in Q1, those Is and Ts are getting dotted across, so that bodes well. And over the course of July or the handful of days that we weren't in blackout with our GEO prerelease and then our financials, we bought back 660,000 shares almost for $8.3 million. And we're quite happy as we were last year to take opportunities where the market is in our views, just not reflective of the value of the company, still isn't. But when it gets really, really wonky, we're happy to step in there and disproportionately take our cash flow to buy back, the best exposure to royalties that we think we can sign out there. So that's just my quick preamble, as we move through to Slide 5, you'll see the breakdown by assets as we usually provide in terms of where the ounces came from. Our core assets continue to deliver. Again, I think that bodes well for the second half of the year that we had a record in Q2 despite two of our meaningful assets or second and the third biggest asset not being at full stride. And at the risk of boarding people audience understand what that means, but I'm referring to Mantos and Eagle. At Eagle, I think most people know that the first half of the year is always a little bit more challenging than the second, for the three coldest months of the year for the time being. Victoria doesn't process as in the stack or I think that - those issues and the cold weather months drifted into Q2. I think that's obvious based on their numbers. So they had a first half that was similar to the first half in 2021. And just, if you just look back at how the ounces came in the second half of the year for them last year, I think there was roughly a 50% increase Q1 - sorry, H1 to H2 of the year and that was as they're still ramping up. So I do expect we'll see a strong second half from Eagle. That's one of the assets, which I expect to continue to do better for us as they go. And then Mantos is the other we received deliveries that are kind of akin to their typical deliveries for us. You'll probably know that they're going through a very meaningful expansion from 4.3 million tonnes per annum to 7.2 million, 7.3 million tonnes per annum, it's a big lift, and we're still expecting to see the benefits of that. I think we've already started to see the benefit of that post quarter. But if you follow a caps on copper, they're - they've made good progress, maybe a quarter behind, but in Q3, they intend on what they expect to stabilize in terms of the throughput and optimize and stabilize at the new throughput levels and the recovery levels as well. So that's another story that's only going to strengthen at the year goes by. Moving on to Slide 6, and we've got a number of updates here on our portfolio. I'll touch on things as I go. I do want to make sure we leave sufficient time for questions, and I realize there's a lot of companies reporting today. So I want to efficiently use your time, if we glance over something that deserves more attention, we can certainly come back to it in the Q&A. First and foremost, on Slide 6. With Malartic, that story is phenomenal for us. It's our flagship royalty. It's I think the gold sector's flagship royalty, and it continues to strengthen. The underground is advancing at case on schedule, definitely there'll be a trickle of underground ore into the mill in early 2023. That will increase, obviously, as the years progress to ultimately overtake the open pit component of it. The story there is one of infill and extension drilling this year as they do the methodical work towards the build and that infill and extension drill work is going extremely well. There's sort 20 rigs on the property. The good news, I think, will, frankly, intensify as they get more access from underground in the second half of the year. The exploration budgets are US$30-plus million for 150,000, 160,000 meters of infill drilling, but also a significant amount of extension work. And not only as we've talked about in the past is the ore body is seeming to grow down the extension of East Gouldie, but you look at this result that's highlighted here in large font, 1.8 grams over 63 meters in Western extension of East Gouldie, which previously does not have resources. So I think we couldn't be happier with what's going on at the underground at Malartic, the work that [indiscernible] are doing there. And in the fullness of time, I think this asset is only going to continue to grow, extend at the very least in terms of mine life. We already know that we have a mine life up to 2039 based on half of the resources, more will get infilled into a mine plan, more will get added. It's just a question of where that takes us, but it's obviously a very good place. On Slide 7, I think I've already kind of made the points I want to make with respect to the Mantos. At least, as I said, the focus is on optimization and sustaining throughputs. They've guided us to kind of getting there in terms of - in Q3, and we're already starting to see the benefits of that. On our side, with respect to Eagle, I mentioned why we're excited about the second half of the year beyond that, and obviously, they have to kind of get to the need to continue the methodical progress that they've been making and ultimately get to the first target. But beyond that, the work on Project 250 continues, that's their aim of getting to 250,000 ounces in their words in 2023. And they're also working on their project 2040, which is to the extent - to extend the mine life out till 2040 with good upside - sorry, good results both at depth and along strike in some of the satellite projects there. So that's all positive. Eleonore continues to kind of take a long steady state. Q2 was a little bit lower due to lower grade mill and throughput. It is a remote site. And I think we've seen in the first half of the year implications of that from COVID and quarantining and like perspective. But overall, it continues to tick along and do reasonably well. Hopefully, they'll start to get past some of these issues as well. On Slide 8, with respect to Island, Lamaque, Seabee, those are three phenomenal Canadian stories for us, run by three excellent companies. They're all core assets to them, individually Alamos, Eldorado and SSR are not ordered on the page. The Phase 3 or 3+ expansion study that Alamos provided several weeks ago was fantastic for us. It moved the expansion from 12,000 to 2,000 to 2,400 tonnes per day with a long mine life. They're still adding ounces. They're still doing significant drill work as you noticed 58,000 meters planned for this year. And not only are the ounces growing, but our piece of the ounces are also growing. Right now, we're getting an NSR that is, I think it's 1.38% exactly, and we expect that to be a blended rate of 2.25% over that new life of mine. So that's a great story unfolding. But so are Lamaque and Seabee, good levels of production, a lot of work that's going into the assets, Lamaque contemplating a significant expansion, Seabee, producing extremely well in the first half of the year and continuing to guide towards mine life extensions at the very least at that operation. So good news for us on those fronts. If you look at Slide 9, we've got on the Page 2 long-life base metal mines where we get the silver at Gibraltar and Sasa doing reasonably well, and we expect a strong second half from Gibraltar as they get access to some higher-grade ore and the Sasa mine continues to do exceptionally well. And then as you all know or most of you probably know, Q2 was the first quarter where we added Renard back when our stream back into the fold. We had taken the conservative approach of not including it in our GEOs and the like, whilst we weren't rightly so while we weren't benefiting from the cash flow. The mine has been benefiting from higher diamond prices, on average, $124 a carat in Q2. You might remember that prior to COVID, it was lucky to get up to 70%. So there's been a real step change in the diamond market and their cost structure is also going to come down or at least been managed even in an inflationary environment. So they're making money, they're paying the stream, they're paying the debt. All of that is good news for us at Renard. It's very nice to get that asset back on track. On Slide 10 and 11, if you will. We've talked to you about the producing assets on 10. The nice thing about our uptick in ounces from 2021 to 2022 for me is a lot of those ounces, again, are coming from existing operations, just being expanded or ramped up. So lower risk growth, never no risk growth. So we are seeing some delays. And if they amount to a quarter here and there, a couple of months here and there in the grand scheme of things, that matters a lot less for us, but that's the best growth you can hope for. And then beyond that, when you look at the next bar, when you look at the aero in terms of optionality past that. And when you look at Slide 11, a lot of good assets being moved in many of these cases into the late stages of feasibility study work. That's true for Cariboo, that's true of Windfall. It's true also Back Forty and they are in well-funded businesses were, again, moving them forward in a difficult market for developers certainly, but moving them forward in a straight line as you can get in the mining sector. These are names I think most of you know well, we can certainly talk about them in the Q&A for us. Upper Beaver/AK, I would point out, those are interesting assets that we're looking forward to getting some news from Agnico, in terms of how they fit into the new Kirkland Lake camp that they own, but I think that all bodes well with AK specifically. They're already drifting into it, they're drilling to expand it, and then Upper Beaver is the next one we're looking to hear some positive news flow. That's kind of the story in terms of organic growth, if you will, when you flip the side to the next slide, or at least the near-term growth story, when you flip to the next two pages, what we've done on Slides 12 and 13 is just highlight a snapshot of, it's not the full list. We could keep adding pages of further optionality that people tend to forget when they think about us. But there are a lot of good assets on these pages. As I mentioned, there are others we could have added run by some pretty good operators undergoing some pretty important catalysts. When you - I'll touch on a couple, but not all. When you think about something like Akasaba West, can we go recently by recently, I just mean a week or two ago, approved the development of that. It's essentially an ore body that gets sent to the Goldex mill. And that will start producing in 2024. Full year basis, that's an additional 750-or-so ounces per year to us that I don't think most people had accounted for. So that's worth getting out of bed for, I would argue. Altar, again, we have a 1% royalty there in an asset in San Antonio, their only brand run copper export. Happy to see South32 step in for about 10% of the company for a $10 million investment. They've raised money subsequently. They put out some really exciting holes. They already had a pretty decent starter pack. But the last hole I saw with 700 meters of 0.5% copper equivalent. So nice to see activity there. Clearly, a casino, which is a big asset for us, the work they've been doing, the investment by Rio Tinto, their involvement in some of the tech work has all been a good shot in the arm, and we look forward to seeing the conclusion of how that their studies and their advancement turn out. I said I was going to talk about all of them, and I mean it, I'll talk about a few more but we are excited about the names on this page. FCI is another really interesting one that maybe you haven't heard us talk about. It's in the James Bay region of Quebec. It's being advanced by a company called Patriot Battery Metals. We have a significant NSR there. and they're well-funded to drill 20,000 meters today. They continue to drill long runs of plus 1% lithium oxide. So that's the story that's definitely gotten legs in the last, I'd say, six to nine months and we look forward to seeing it continue to develop. Hermosa, obviously, you know about that story, Sout32 positive, pre-peak year working towards or I guess is Q1, working towards the feasibility by middle of next year. That's a big ticket, a big contribution for us once they finally make a go-ahead decision. And others on Slide 13, I won't - I said a couple of times, so I won't talk about that. But if you look at the page, there's some pretty exciting catalysts there. And we expect that to continue to intensify partly because of Slide 14, we are seeing an immense amount of drilling and activity done by our partners on our ground. You've heard that from me before in 2021, 1.4 million meters just over that. I argue the rate is higher now, but if you factor $350 a meter, that's $0.5 billion almost of work done on our properties that we're not paying for, our shareholders are not paying for. And on the right-hand side, what you see that lead to is not only a replacement of the ounces that came out of the ground, last year, 80,000 ounces for us replaced by 114,000 ounces in reserves. But if you factor all the categories, our ounces are being - our ounces that are getting out of the ground are being replaced by orders of magnitude. So that's we talked a little bit more on the previous pages about organic growth. This is really a depiction of, in my mind, of the sustainability of the business, the longevity of the business and further upside or blue sky, however you want to describe it. We've talked about the recent transactions that we've announced, mainly in Q1 on Slide 15. As I mentioned, we're really excited to have Tintic closed. It says they're expected in Q3, but it's kind of imminent any day now, as I said, just dotting Is crossing Ts, but closed in the same matter we announced it. The deal between Osisko development and the private sellers closed in late May, I think it was the last day of May. So it was kind of a quiet period for the Osisko development in terms of talking about that asset for most of the first half of the year. But now that it's in the fold, we look for some positive news flow there and the ramp has already started to make progress to get to a larger throughput operation. In terms of CSA as well, we continue to advance those discussions with the SPAC Metals Acquisition Corp who are looking to consummate that transaction with Glencore. Obviously, a lot of change in the copper market since that deal was announced. It's a little funny that we've swung from a world that couldn't get enough copper, and now apparently, that was a false alarm, the world doesn't need any. I think the truth is in between, and what we see there is a very motivated buyer and seller and hopefully a pathway to getting a transaction done that we're still quite keen to participate in under the right circumstances. So that's the update that I want to provide. I will pass it on now to Fred to just walk you through a few more of the particulars from the quarter, and then happy to be come back and field questions afterwards. So Fred, over to you. Frédéric Ruel: Thank you, Sandeep. [Foreign Language] Good morning, everyone. Thank you for joining us today. Let's start with Page 17 of the presentation. We recorded revenues of $51.5 million this quarter from royalties and streams compared to $50.7 million in Q1 and $49.9 million in Q2 of 2021. Cash flows from operating activities were negative on a consolidated basis as a result of the consolidation of the activities or Osisko development. But for the royalties and stream segment alone, cash flows from operations amounted to $35 million compared to $37.3 million in Q2 of last year. The slight decrease was mostly the result of timing and the payments from the operators, these payments were received actually in early July. On Page 18, we present a summary of our net earnings and adjusted earnings. Consolidated net earnings to Osisko shareholders was $17.2 million or $0.09 per share compared to a net loss of $14.8 million or $0.09 per share in Q2 of 2021. In 2021 impairment charges from a Osisko development at generated dollars at the time. On a consolidated basis, the adjusted loss was $4.7 million or $0.03 per share, which is comprised of adjusted earnings of $25.7 million or $0.14 per share from the royalties and streams segment, and an adjusted loss of $30 million from Osisko Development or $0.16 per share. On Page 19, we have a summary of our quarterly results with additional details for the royalties and stream segment including 22,000 GEOs in Q2 of this year compared to 20,000 in Q2 of last year, a gross profit of $35.9 million in 2022 compared to $35.7 million in 2021 and operating cash flows of $35 million were generated in Q2 by the royalty and streaming business, mostly as a result of the record quarterly cash margin or - of $47.8 million. If we move to Page 20, we present a breakdown of our cash margin. So the cash margin from our royalties reached $34.4 million, and the cash margin from our streams amounted to $13.4 million for a quarterly record of $47.8 million or 93%. On Slide 21, we present the progression of the dividends, paid to our shareholders since the creation of Osisko Gold Royalties in 2014. The dividend yield is approximately 1.7% as of this morning and over $204 million have been returned to our shareholders at the end of Q2. In addition to $95 million that was used to be purchased a total of 7.4 million shares under our NCIB program. And finally, on Page 22, you'll find a summary of our financial position. The consolidated cash balance was $449 million at the end of Q2, which include $313 million for Osisko Gold Royalties and $136 million for Osisko Development. Osisko Gold royalties held investments having a value of $195 million at the end of June, in addition to our investment in a Osisko development, which is valued at approximately $200 million. Our long-term debt stood at $300 million at the end of June, following the repayment in full of the crib facility in April. We currently have $650 million available under our credit facility, including the accordion of $100 million. We have also acquired, during the quarter, a total of 247,000 shares under our NCIB program for $4.9 million, and we've acquired 659,000 shares in July for $8.3 million. So we have continued to benefit from strong commodity prices in Q2, which allowed us to generate strong cash margins and operating cash flows from our royalty and stream interests, and we are very optimistic for the second half of the year. I will now turn the call back to Sandeep for questions.

Thanks, Fred. Just over to the operator, please.

[Operator Instructions] And your first question will be from Ralph Profiti at Eight Capital. Please go ahead.

Good morning. Thanks for taking my questions Sandy. I have two of them, if I may. Firstly, I'd like to get your thoughts on the drivers behind the $20 million investment at Tintic. There was an option to go higher. And just wondering, was that a function of sort of economics or was there a strategic rationale to hitting the lower bound of that original range?

Sure. Ralph, I can answer that question first, and then we'll allow you a second, but no more. Look, the driver was pretty simple. We had provided basically a range of US$20 million to US$40 million available to Osisko development when they announced the deal. Obviously, when they announced the deal, they didn't know how much equity they be able to go raise. Off the back of it, they were very successful in doing that, which was a good outcome for them and for us in terms of having the back of that, using that catalyst that high-grade catalyst to go raise funding and being able to raise funding off for all the assets. So - and I forgot how much they raised exactly, but circa CAD 230 million-or-so is the number in my head. So just led them to need a little bit less. We would have been happy for them to take more. We really like that asset. We're really excited about it, but very happy also with the $20 million investment. So it was their choice. And given the financing success they had, they need less from us. I would have wished we would have got the whole US$40 million, but we'll certainly settle for the US$20 million.

Got you. Understood. Maybe as a follow-up, Sandeep, there's been quite an active transaction market. Just recently, some competitors of yours have announced sort of deals that, I guess, could be perceived as sort of more on the full valuation side with respect to resources implied and sort of conversion rates. And I'm just wondering, is that something that you're seeing in your particular deal pipeline sort of a more competitive streaming pipeline with respect to valuations themselves? And are you still confident that we can get these IRRs in the high single digits and low double digits, given perhaps more competitive tension in the space?

Yes. Look, I mean, Ralph, it's a fair assessment. I think. I think people are doing what they think is right for their businesses, and I'm not in a position to say whether that is or isn't. But it is competitive. It has been, honestly, the entire time I've been in my seat, I would say, we have seen some deals that have been lofty, but ultimately, they made sense to both sides. For us, I've been clear that we don't need to stretch for growth. We have double-digit CAGR growth for the next five years. And I hope beyond that based on the assets we already own that we can be discipline as frankly we need to because we don't have the same multiple. So for us to stretch and pay those types of prices would be dilutive to what we already have. And we're only interested in adding growth if it's accretive, if it's additive, if it's overall beneficial quantitatively and qualitatively. So the idea of diluting our exposure to our assets for shareholders at 0.9 or 0.8 or wherever we trade times that today based on the Street consensus basis is not something I'm interested in doing. So it's a competitive market. It stayed hot. The truth is despite some of the things we've seen right now. I mean I think the pipeline is getting better, I alluded to it earlier in the market like this where equity is not available to everybody, we're certainly happy to be catched up. And we're seeing conversations that were - that had stalled six, nine months ago, getting reengaged, some of those bilateral to us. So I think that's a good sign. And I think, frankly, the longer there's pain in the system of the more inflation there is, as the CapEx numbers get bigger, I think the more need there'll be for our capital and others in our sector. So I think the good news for us, you're right, I think, overall, I think it's hard to argue with your assessment. But the good news for us is we have a lot of organic growth. We can pick our spots. We always have said we would. And even in - I would say Q3 is better than Q1 was from a - or should be at least in terms of a deal flow perspective based on how the equity markets have completely closed. But even in Q1, we were able to do some pretty smart things and good returns off the beaten path and our focus will continue to be on getting value for our existing portfolio as well as adding to it smartly when we can.

I appreciate those answers. Thanks Sandy.

Next question will be from Trevor Turnbull at Scotia Bank. Please go ahead.

Just want to ask a little bit about tax bills going forward. You had a pretty sizable tax bill this quarter. And just wondered how we should think about that going into the subsequent periods?

Sure. I could do my best tax from first nation. But Fred, why don't you start and then I can pick up maybe. Frédéric Ruel: Sure. So most of the taxes for 2022 are deferred taxes. So they're not cash taxes. We pay some cash taxes in foreign jurisdictions, for example, in the U.S. or in Mexico. We're expecting to start paying cash taxes by the end of 2023 and more significantly in 2024. But the impact for this quarter was mostly related to deferred taxes, which may be as a result, usually of different noncash or nontaxable or nondeductible transactions that we may have, which are mostly accounting-driven.

Yes. And even that assessment - sorry, I would say, look, that's right. Some of that will depend on commodity prices. Commodity prices are softening again. So perhaps our cash taxes will get pushed out again. And as we add to the portfolio, we continue to create new tax attributes, which will hopefully continue to shelter us. So that's just the deal caveat I would add to that, Trevor. It sounded like you had a follow-on.

Yes. And maybe I can talk a bit more about it offline. And I apologize, I've been kind of juggling a couple of different calls. I don't know if you mentioned it, but with respect to consolidation with ODV. Is that something that now that you've got to reduce holding you see being able to stop doing? Or is that something you're going to probably live with for a bit longer?

Well, I think it's certainly something we're focused on getting out of it. I don't think it helps the company to have that kind of noise in accounting. And it does, I think, lead to some flaws conclusions. Both companies are doing exactly what they should be doing. We brought them together. I don't think it's the right interpretation. So - but it is an issue we're working towards with the drop in ownership recently, it just happened at the end of May from 75%, low 70s to 44%. We're very close to driver, I would guess. And we're having those discussions with our auditors as we speak. So our hope is that very soon, we will be able to consolidate. I think that will provide a lot clearer of a picture for investors and analysts and anybody that follows us. So yes, the answer is we're close, and I think we've got ways to get there. So hopefully, we'll ask you guys to bear with us a little bit longer, but hopefully, it's not very much longer.

Okay. And then my final question is just with respect to San Antonio. I saw that you had a lot of updates with a lot of different projects. But San Antonio, I'm still having a hard time getting my head around exactly when we should think about production starting down there?

Yes. Look, and apologies for that if we didn't have a proper update, there's a lot of assets to talk about on a usual basis, but the update there is, there should start to be or there has been a trickle of also starting to come out of the stockpile, which is the starter project, if you will, is just reprocessing and an existing stockpile, obviously, that was sitting at surface. So that's under leach now. So a little bit of delays, but that - those ounces are coming out now, and we'll hopefully continue to grow over the course of the second half of the year. But again, that's not the price. The price there is the new heap leach project at [indiscernible] and the gating item there, I would say, the first gating item is permitting. So they've been working on that, that they be in Osisko Development and our understanding is that things are going well, still - Mexico is still permitting. So until they have it, they don't have it. But our hope is that we'll come together also in the second half of this year and then that is in terms that question of getting the go button on the larger oxide project. So short answer, a trickle coming out of the stockpile and then subject to permitting and getting the construction done, hopefully, more meaningful production from the [indiscernible] oxide coming thereafter in the near-ish to medium term.

Okay. I appreciate all that. Thank you, Sandy.

Next question will be from John Tumazos at John Tumazos Independent Research LLC. Please go ahead.

Thank you, Sandeep. Sandeep I'm kind of patient and maybe I invest with a 10- or 20-year time horizon and don't have too many pressures to keep my costs low, try to be laid back. But some of the institutional money managers have a shorter time horizon. And if they don't enter clients for them, we're getting up to almost two years since the ODC restructuring and the benefits are not as obvious as they should be. I'm thinking back in history, wire highs are sold their white paper to Domtar and took back stock and they sold their home builder to try point homes and took back stock. And they issued Domtar and TRI Pointe stock to Wareheiser shareholders to retire Wareheiser shares. That's, for example, a mechanic where you could issue analogously, ODC shares to retire OR shares to help force the market to recognize value. But for these institutional managers, you know that get fired and sometimes they have to fold their firm when they have withdrawals. Could you do something to help make the market recognize the great underlying values a little faster, sell an asset, buy back even more stock, you know some people's clients are not as easygoing as you and me, Sandeep.

No worries, John. I appreciate the question. It's fair. And sadly, I think most people would have a shorter time horizon than the one you described, which is fair, too. And frankly, so do we in terms of seeing the value uplift that we're expecting and we intend on getting to. So I'd say, it's - the spinout, I think, has been the right move for everybody, including for the assets. They've gotten a lot more spending than they would have with Osisko royalties. That spending is out of business Osisko Royalties. We cleaned up the company. The consolidation kind of one more step that we're working towards, the reduction in the ownership, all that's kind of in progress. I describe it as being half done. But frankly, John, I think we did the hard half and we have the easier half to do. The last two years, I guess it's been 18 months since that spin-out have been essentially a downdraft in the market. We've outperformed. It's obviously not a satisfying to outperform your peers in a down market, but we have. The reason the multiples, the NAV multiple in particular, has not bridge the gap, frankly, though, is the underlying assets have gotten stronger - as strong, frankly, in the interim. And that's by virtue of things like the Malartic on the ground and other things in Mantos expansion, et cetera, et cetera. So all that bodes well. The fact that we still trade where we do, where we are most of the way through the cleanup that we had to do and we still have all that value to unlock. I think that's good news. And frankly, when I look and talk to our institutional shareholders, the same people you mentioned, they see that same value, and thankfully, they're somewhere in between in terms of patient levels that you described, and happy to see us continue to blocking and tackling that it takes to get there. The point is the asset value is - or the portfolio is just too valuable. For it to continue to trade the way it does, we're going to continue to do all the right things that we can we're hopefully more right things and wrong things until we unlock that value. But when you see back to the point, I guess, it was Ralph was making earlier, when you see the prices that are being paid for certain assets, some of them very good assets, some of them exceptional assets. But when you see the prices that are being paid, and you look back at our portfolio, the replacement value of what we have is tremendous. And we'll just keep doing the right things to improve the company little by little. It doesn't require any overhauls. We just have to do everything a little bit better. And I think there's a much better outcome for us and our shareholders. So I appreciate the patience. I understand the point. And...

Sandeep, as far as I've had in my own office, I've had 19 funds that used to pay me US$700,000 collectively, shut their doors, not just fire me, but like close down and liquidate. So it's the customer of my customer that isn't laid back and anything you can do to make the market recognize value faster is doing God's good work.

Yes. No, I totally understand, John, it is a tough market out there for everybody, not just us. I think we're coming into our own. And I would say this, I mean, back to points we touched on, I do think maybe the first point I made, I do think the backdrop for gold is exceptional. I think when money comes back to the gold sector, which it's gone completely the other way right now. But when it does, which I think it will, I think most people on this call think it will, I think the royalty sector will disproportionately benefit for all the reasons it always does, especially in this inflationary environment. And when people do look for that exposure, I think, they're going to see value in us that is significant. So that's what we're focused on. And we don't need it. We don't need a better gold price. We don't need a better market to continue to have a strong company, issuing records upon records, but it certainly wouldn't hurt but understood the point, John, and we'll keep working. Trust me, we're working hard, and we're as impatient as they are.

Thank you.

Thank you. Next question will be from Carey MacRury at Canaccord Genuity. Please go ahead.

Good morning, Sandeep. And maybe with Renard back in the mix here, could you give us a - what should we be expecting from a mine life perspective? I think the last mine plan I saw goes out to 2029, 2030, but that's pre-dated at this point?

Yes. No, it's a good question, and that is a bit dated. I think what you should expect from Renard, and it's a bit early to say, but you should certainly expect the carats and the GEOs, obviously, commodity prices depending to continue to be akin to what they are now. So I think that's kind of the steady state that they're at. What we see there is a shorter mine life, good ounces that bridge us to some of our growth projects in the middle of the decade. There are also exploration opportunities - or not exploration development opportunities to see them invest in the next leg of the underground and push out mine life to the types of dates that you've mentioned. So I think that's still a possibility. We'll have to wait and see right now. We just got to see the ounces back on, the carats back on and the more time they spend on it, the more cash they accumulate, which they are accumulating then some of those development scenarios make more and more sense. But I would reserve judgment on that, really just reinitiated it in Q2, so we'll let it run for a little bit and see what the future looks like. We'll certainly come back to you and describe that when we understand it. Hopefully, it would answer your questions.

Yes. That's great. Maybe also a bit too soon, but obviously, diamond prices have improved a lot. Have you had any discussions with your partners on what the strategic future plan is there?

Well we have, we've always. And I think the genesis of that, first and foremost, was the - just the reinitiation of the stream at a required - our partners on the lending side to come up with a plan that works for everybody. I think it does. So that was a rework that led to the reinitiation of the stream. And those conversations continue, obviously, and that with step 1, you've got to walk before you run. But those conversations continue to carry in terms of what is the long-term future of that mine, where does it reside, what kind of capital infusions kind of benefit from, from external sources. So that was really the point that safeguarding that asset, getting it turned back on is very positive. Ultimately, if we can find a better home for it, all the partners are very much aligned in doing that.

Good. Thanks Sandeep.

Thank you. [Operator Instructions] And your next question is from Adrian Day at Adrian Day Asset Management. Please go ahead.

Yes, Good morning, Sandeep. I had two quick questions, if I may. On your investments, a tad under $400 million, I guess, ODV is about well, a little less than $250 million. So how much do you have in other various Osisko spin-offs? And where is the bulk of the rest of that?

Sure. And you're right, that's about right. We own - post consolidation, we own 33.3, I guess it is, million shares of Osisko development. So that's the lion's share. We also own 50 million shares of Osisko Mining, if that's pretty much exact. So that would be the other big component. I think it's 14% of the Osisko Mining shares outstanding. And then there's a small position in Osisko Metals, a small position in some of the earlier stage accelerator companies like Sable and Talisker. But that really rounds out the rest of it pretty quickly.

Okay. Okay. And if you look ahead, maybe to the end of the decade or the next five or six years or whatever, is there - based on the existing plans, is there a particular period when you're expecting largest year-to-year growth?

Yes, that's it. That's a tougher one. Look, I would say the fact that we are going from 80,000 ounces last year to a projection that sees us growing by double-digit CAGR growth all the way to 130,000 to 140,000 ounces in '26. Those are big leaps. Even getting to the low end of our guidance this year is a 12.5%, 13% increase. Those are big leaps for a company our size. And then when you look back, I'm looking at Page 10 now, and you look at the things that aren't included in there, obviously, or external growth, anything we buy is not included in there. But when you look at that arrow and you see things sticking out at you like casino, like Hammond Reef, which Agnico has put reserves on for the first time and is working on studies Hermosa, Spring Valley, Upper Beaver, those are big contributors. Casino itself can be as big as Malartic once built. We're talking about multiple assets in that list that could contribute 5,000 to 6,000 to 7,000 ounces a year. So in terms of when they come along, that's the crystal ball kind of question, I would say a lot of them are important, important to their operators, they're being advanced and what years they pile up on, I think old reserve judgment. But I certainly think there's a lot of those assets that are going to matter in this decade and matter in very significant ways. So I'd say we're in good stead. What year we have the best growth or what period we have the best growth? I don't know exactly, but I believe when you're looking at this page, we have the ability to sustain, which is more important than one kind of big blip. To me, at least in any given year, but the ability to sustain this level of production - or growth for a company our size for such an extended period of time, I don't know of anybody else that can replicate it, especially without any investment.

All right. Okay. Thank you so much.

And at this time, Mr. Singh, we have no further questions. Please proceed with closing remarks.

Okay. Thank you, operator, and thank you, everybody. I think I won't really say anything else about the company because I think we've covered a lot of ground. This might not be my place, but I can't help myself. I will quickly say something about Ned Goodman, who unfortunately passed away as most of you probably know, on the weekend, a giant in the mining business and in the Canadian business and very integral and to the Osisko story, his backing of Sean in Osisko ONE and Malartic and help build that company. I don't think that story plays out the exact same way without Ned and his support, and he played in a very important part of my career with the move to his shop having altered the trajectory of my career. So sad and our condolences as a group to the Goodman family is quite sad to lose people like Ned and Lucas in such a short period of time. But it's my two cents on a sad event. I'm sure I touched a lot of people on this call as well. So thanks for your time and - for bearing with me and all the best.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.