TORONTO (miningweekly.com) – Precious metals firm Osisko Gold Royalties has increased its quarterly dividend by a third to C$0.04 a share, on the back of rising gold and silver output in the three months ended September 30.
During the period, Osisko’s net earnings from continuing operations rose nearly 70% year-on-year to C$9.8-million, or C$0.10 a share, compared with C$5.8-million, or C$0.12 a share, in the comparable period a year earlier.
Excluding special items, the adjusted net profit came to C$15-million, or C$0.16 a share, much higher than average analyst projections of C$0.06 a share.
Revenue of C$11.7-million was earned from selling gold and silver from the 5% net smelter return (NSR) royalty on Agnico Eagle Mines and Yamana Gold’s Canadian Malartic mine, in Quebec. This was compared with revenue of C$9.6-million earned in the third quarter of 2014.
The Canadian Malartic had reported a strong operational performance in the third quarter, producing 153 206 oz of gold. On September 22, the mine poured its two-millionth ounce of gold since mining started in April 2011. This provided Osisko with record attributable output of 8 264 oz, of which 7 795 oz was sold, and record attributable silver output of 7 780 oz, of which 7 280 oz was sold.
Osisko expected to start earning revenues from its 2% to 3.5% NSR on Goldcorp’s Éléonore mine, located in the James Bay region of Quebec, which it acquired through its Virginia Mines takeover. Virginia had received advance royalty payments of C$5-million between 2009 to 2013, with a balance of C$900 000 as at September 30. Revenues would be recognised once the advance payment received was reduced to nil through royalty payment calculations, which was expected in November.
Osisko expected attributable royalty output for 2015 of 28 000 oz for the Canadian Malartic mine and between 1 500 oz to 1 900 oz of gold ounces for the Éléonore mine. The operation had suffered some start-up issues earlier this year and, in September, Goldcorp revised its full-year output down to between 250 000 oz and 270 000 oz of gold, from 290 000 oz to 330 000 oz of gold previously. The company also expected to continue its exploration programmes in the James Bay area.
Meanwhile, Osisko had, in October, acquired a portfolio of Canadian royalties held by Teck Resources, which were expected to strengthen its Canadian asset base and add to the growth profile.
As at the end of the quarter, Osisko had cash and cash equivalents of C$304.1-million and net working capital stood at C$298.9-million. The company was debt-free, unhedged and, with the closing of its revolving C$100-million credit facility in November last year, which could be increased by C$50-million, the company had the financial flexibility to enhance its royalty portfolio, it advised.