JOHANNESBURG (miningweekly.com) – TSX-listed Osisko Gold Royalties has declared first-quarter net earnings from continuing operations of $10.2-million, or $0.15 a share, for the first quarter of 2015. This was a marked improvement on the $3.5-million net loss, or $0.08 a share loss, in the corresponding period of 2014.
The company achieved revenues for the period under review of $10.6-million. This was owing to the sale of gold and silver from the 5% net smelter royalty (NSR) received from the Canadian Malartic mine, in Quebec, compared with nil in the first quarter of 2014. The mine produced 135 786 oz of gold during the period under review, as a result of higher than expected recovery rates, which were partially offset by lower than expected grades.
“We congratulate the mine's new owners Yamana Gold and Agnico Eagle Mines as they complete the optimisation of the mine and increase Canadian Malartic's production profile," said Osisko chairperson and CEO Sean Roosen in a statement on Friday.
The company had not started recording revenues from its Éléonore royalty, while Virginia had received advance royalty payments of US$5-million from 2009 to 2013.
Osisko advised that revenues would be recognised once the advance payment received was reduced to nil through royalty payment calculations, expected towards the end of the third quarter.
The company reported record quarterly gold ounces earned and sold for the quarter of 6 985 oz, and record quarterly silver ounces earned and sold of 7 825 oz.
Adjusted earnings of $8.2-million, or $0.12 a share, were also noted, as were net cash flows provided by operating activities of $5.6-million.
Further, cash and cash equivalents for the first quarter increased by $173.2-million to $348.4-million and working capital and marketable securities of $438.9-million were reported.
In the eleven months as a new company, Osisko had strengthened the balance sheet by adding over $242-million in cash raised through equity issues, acquired the Éléonore royalty through a friendly transaction with Virginia Mines, and had acquired a stake in Labrador Iron Ore Royalty Corporation (LIORC).
Since the beginning of 2015, Osisko had acquired, as of May 14, a 9.75% interest, including a 7.2% interest during the first quarter, in LIORC.
LIORC was entirely focused on the operations of Iron Ore Company of Canada (IOC) through a 7% gross royalty on the IOC iron-ore operations, a $0.10/t marketing fee on all products sold by IOC and a 15% direct interest in IOC.
IOC was currently a major Canadian iron-ore producer held by Rio Tinto (59%), Mitsubishi Corporation (26%) and LIORC.
The mine, in the Newfoundland-Labrador area in Canada, had been in operation for more than 53 years and had reserves to continue operations for 29 years at the current production rate.
“While our focus remains on precious metals, we will continue to seek out opportunities for the company where we believe Osisko will benefit from domestic, long-life assets with strong cash flow,” Roosen added.