Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q2 2023 Results Conference Call. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] Please note that this call is being recorded today, August 10, 2023 at 10:00 am Eastern Time. Today, on the call, we have Mr. Paul Martin, Interim Chief Executive Officer; Mr. Frédéric Ruel, Chief Financial Officer and Vice President, Finance and Mr. Iain Farmer, Vice President of Corporate Development. I would now like to turn the conference over to our host today, Mr. Paul Martin. [Foreign Language]

Good morning, everybody. And thanks for being with us. I’m Paul Martin, the interim CEO of Osisko Gold Royalties. I’ll run through the presentation and then we’ll open up the line for questions. And I have Fred and Ian in the room for, anything that I can’t answer. For the participants on the line, you can submit your questions in advance through the webpage. The presentation is available on the website as well as through the webcast. And as stated, I am the interim CEO having committed to assist the Board in leading the Company during the transition period. I have also made the commitment to remain in the CEO chair until the Board has completed its process and announced a permanent successor. Please note, there are forward-looking statements in this presentation and that all amounts are in Canadian dollars unless otherwise noted. We’re pleased with the performance in the second quarter, both from a GEOs earned perspective and from a transactional basis. 24,645 GEOs earned in the second quarter, a nearly 11% increase over the comparative quarter, with 47,756 GEOs for the first half, which is nearly a 15% increase over the comparative period, puts Osisko in a good position from an annual guidance perspective. Gross cash margins of 93% were maintained in the quarter and for the year-to-date. The Company had $70 million in cash at the end of the quarter and declared and paid its quarterly dividend of $0.06 per share during the quarter after increasing it by 9% from $0.055. Increases in revenues and operating cash flows followed the increased performance in GEOs earned and represents a 35% increase quarter-over-quarter, and on an annualized basis represents operating cash flows of approximately $200 million. Net earnings of $0.10 per basic common share were essentially flat compared to…

[Operator Instructions] Your first question comes from Ralph Profiti with Eight Capital.

I wanted to ask a question starting off with CSA and sort of the methodology on how you are thinking about attaching a valuation to the stream and the equity position as well, sort of the total investment context. And in this, in your eyes, is this really just sort of an optimization story on the part of the new operator or are you thinking there’s optionality for step changes in throughput production or exploration?

I think what we see is that that was probably an underappreciated asset in the Glencore portfolio. And knowing what Mick has done in the past, we see significant improvement to come through on it. And with the addition of our backstop copper royalty, this is one we’re very excited about.

Got you. Thanks for that context. And just a second question on liquidity currently sitting in terms of availability of $500 million, if you include the accordion, can you put that in the context of sort of the market portfolio of transaction opportunities out there in the pipeline that is potentially sort of sizes of $50 million to $100 million or some transactions a little bit higher than that. I’m just trying to get a sense of liquidity versus opportunities.

Yes, that’s a fair question. I think even without the accordion we’re sitting in -- we have a strong liquidity with respect to what we’re seeing in the marketplace right now, is how I would answer that.

Your next question comes from John Tumazos with John Tumazos Very Independent Research. Please go ahead.

I have a detailed question first. I apologize if I didn’t read everything. I got the note 5 and 10. What was the $19.9 million credit loss, which loan to which company? And could you just say what the $6.7 million impairment was related to?

Yes, sure. John, those are both very fair questions. So the first one, there was a -- we had three items, I would say in the accounts for the quarter, one being, a gain on the Osisko Mining joint venture transaction. So, we did reflect a gain of almost $20 million in respect of that. That’s a non-cash item, obviously. We did have a reduction in our accounts receivable or loan receivable from Renard. This was a balance that was created from the past restructuring at the operation where we deferred our GEOs, and that those amounts were set up as a debt payable. Given the decrease in the diamond prices, we felt it prudent to trim that number, which is essentially what we’ve done in the quarter. Obviously, if diamond prices return, that full value returns to us. And then, the asset impairment was a very small project where the operator has come up dry and has essentially walked from the project. So, we’ve written that down to zero.

What was the name of the project?

It was called Hidden Valley.

In PNG?

Yes.

Second question, 15%, 20% of the asset base are the stock holdings of affiliated companies, ODC, Osisko Mining, et cetera. Those don’t generate the current return that the royalty streaming assets do. And I would imagine over time you’d rather apply that capital to generate the income. Is it a reasonable expectation that circa 2026 when the projects of ODC and Osisko Mining are in production, that would be a target time to monetize those stock holdings?

I think I did answer that in my presentation saying that we continue to monitor those investments all the time and vis-à-vis what our capital needs are. And yes, we will look to make a decision at the appropriate time as to whether we would decrease those positions or not. As you well know, Osisko Development as an example is a company that requires additional funding to realize the value of those underlying assets. And I think at the moment, we are comfortable to sit and be diluted in our position whilst the funding is used to increase the value of those assets.

[Operator Instructions]

Operator, it looks like we might be done.

Over to you, Mr. Martin, for closing remarks.

Okay. Thanks everyone for taking the time. And as you know, we’re available for follow-up questions as and when required. Have a great day. Bye, bye.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.