Q1 2018 Osisko gold royalties Ltd Earnings Call
May 04, 2018 PM UTC
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OR - Osisko gold royalties Ltd
Q1 2018 Osisko gold royalties Ltd Earnings Call
May 04, 2018 / 02:00PM GMT
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Corporate Participants
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* Elif Lévesque
Osisko Gold Royalties Ltd - CFO & VP of Finance
* Sean E. O. Roosen
Osisko Gold Royalties Ltd - Chair of the Board & CEO
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Conference Call Participants
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* Carey MacRury
Canaccord Genuity Limited, Research Division - Analyst of Metals and Mining
* Dan Rollins
RBC Capital Markets, LLC, Research Division - Head of Global Mining Research and Analyst
* Kerry Smith
Haywood Securities Inc., Research Division - VP & Senior Mining Analyst
* Michael Jalonen
BofA Merrill Lynch, Research Division - MD
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Presentation
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Operator [1]
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Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q1 2018 Results Conference Call. (Operator Instructions) Please note that this call is being recorded today, May 4, 2018, at 10:00 a.m. Eastern Time. Today, on the call, we have Mr. Sean Roosen, Chair of the Board of Directors and Chief Executive Officer of Osisko Gold Royalties; and Mr. Bryan Coates, President of Osisko Gold Royalties. I would now like to turn the meeting over to our host for today's call, Mr. Sean Roosen. (foreign language)
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [2]
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(foreign language) Welcome, everybody, to the first quarter conference call of our financial results for the first quarter of 2018. We're going to be following the PowerPoint that's found on our website called Q1 Results.
There is a disclaimer page on the front of this PowerPoint. We will be making forward-looking statements, and I would refer you to that statement to -- for the disclaimers required.
So we wanted to start the call today, a little bit different than usual. Given that our friends from Barkerville have published their main resource yesterday, the best question of the day will be receiving a pair of Barkerville gold cufflinks.
So on to the main event. For the first quarter of the year, we had 20,000 ounces of GEOs, gold equivalent ounces, which fits in with our annual guidance of 77,000 to 80,000 ounces of GEOs. Cash operating margins were at 91%, the highest in the Precious Metal sector. And we generated $29.5 million of additional cash operating, and we also had from our offtake agreements a $2.4 million delivered.
Record cash flows from operating at $23.3 million, a 94% increase over Q1 2017. We also executed the investment of $148 million in Victoria Gold's Eagle Project in the Yukon. $98 million of that purchase is 5% royalty, which will deliver 10,000 ounces per year of gold [thus] a very significant add to our asset base and a Canadian asset, fully permitted, under construction as we speak.
We were also able to convert the Matilda Gold offtake to a royalty of 1.65%. It's [a dream start] . And we monetized about $25.6 million of equities, realizing a -- a realized gain of $15.5 million. And one of the things that I do want to highlight today is that from the investment in our accelerator companies since we started at June 2014, we have harvested over $70 million in realized gains and our equity book still remains at just under $400 million. So we've had "expert" returns, at a very much appreciated increase in value in our -- within the asset-base of our accelerator companies. We've also earned several royalties through our accelerator model that adds about a $90 million cost base and probably has a market value of in excess of $200 million as we sit today. So the accelerator model has really, as -- on most of our traditional royalty and streaming opportunities, and we will be going through further highlights in that as we get further through the operating year 2018 as to the outlook, how the returns are working on that model.
We also repaid $32 million on our revolving credit facility in April. We distributed $7.8 million to our shareholders through our 15th -- sorry, our 14th consecutive dividend payment. And right now we've hit our 1.6% yield, which is near the top of all companies in the gold-mining space.
We repurchased 1.6 million shares at $12.65, and we continue to be believers in our own stock and as the market devalues our stock, we are buyers of our own stock, and we believe strongly that we are in a very low-valuation period. So on the theme of buy low and sell high, I would encourage everybody on the call today to have a serious review of the underpinning value within Osisko Gold Royalties, and maybe share our view on the value gap that exists in the marketplace today.
Moving on to Page 4. We've gone from 10,000 ounces in Q1 2017 to 20,000 ounces in Q1 2018, a 100% increase year-on-year. Our guidance right now is for 77,000 to 82,000 ounces for the year of gold equivalent ounces, and is giving us one of the strongest growth profiles in the Precious Metal royalty and streaming space.
Page 5. To the evolution. We started out our first full year of business for 2015 at 30,000 ounces. We finished this year just a tick under 59,000 ounces and we're 77,000 to 82,000 ounces for 2018.
Page 6 basically gives you a breakdown of how our assets work. Obviously, we have some very big assets near Canadian Malartic, by far one of the most valuable assets in the royalty space in the world. And Canadian Malartic continues to strengthen with adding resources and reserves both in the Odyssey area and East Malartic pit . We see it as a growing asset and it continues to get stronger and stronger. Canadian Malartic is now ranked the 12th largest gold mine in the world, the largest gold mine by production in Canada. Last year it was 17th, and it's moved up the ranks by 5 this year.
Ãléonore, Seabee, Brucejack, Island Gold, Vezza and a combination of other producing assets has taken us from the 30,000 ounces to 59,000 ounces [the lower] bullet. As you can see on our spreads, we are at 69% gold, 16% silver and we have 11% in diamonds and just 4% in other minerals. So dominantly gold and silver business as we talk about how we fit into the royalty and streaming space.
Cash on hand. Our net cash flow from operating activities. For this year, we had $23.3 million. And adjusted earnings, we had $8.9 million for the quarter.
Page 8. I'm going to hand it over to Elif Lévesque, our CFO, and she's going to take you through the Q1 results from the financial space.
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Elif Lévesque, Osisko Gold Royalties Ltd - CFO & VP of Finance [3]
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Thank you, Sean. Like Sean mentioned, we had a very strong quarter and results maybe reflect the impact of the addition of the Orion portfolio and increased into cash margin. We did see a 94% increase compared to the same quarter last year and then a 23.3 net cash flow from operating activity, and that really reflects the increase in cash margin. And if you do look at the adjusted earnings, you do actually see the impact of the increase in gross profit, partially offset by higher finance costs, and also higher due to the reduced G&A. And in terms of the GEOs, you will see, again, we have almost doubled compared to same period last year. And (inaudible) we also see the increase of the effects that we aligned toward the full year. Our cash operating margin stands at 91% looking at royalties and streams, compared to $17 million same period last year. For the year we'll probably be looking at more of an average of 87%. And this means that the cash operating margin from the royalties and streams, we also get a 2.6% of the margin from the offtake. If we look at those agreements more on the financial settlement equivalent basis and they do add a little bit on top of what we would see from our royalties and streams. But the net earnings for the quarter stand at $2.3 million compared to a $4.1 million last year for the same period.
Looking at our financial position on Page 9. Our cash and cash equivalents was $333 million for the year at quarter ending March 31, 2018, and if we look at April 30, we were at $205 million, which reflects the payment of $32 million on our debt facility and [exchangements] of $9 million on the Victoria [DPO] . So our debt also shows the reduction in $32 million when looking at April 30's numbers. So our credit facility right now stands at about $170 million drawn and investments at $351 million as of the end of March 31 and $382 million as of April 30, with the addition of the investment made in Victoria Gold.
Back to Sean.
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [4]
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Thanks, Elif. So obviously balance sheet is in great shape, we have quite a bit of liquidity, quite a bit of firepower on our balance sheet. So we are able to continue on and look for valuable transactions in 2018. And we are in a position to execute, if we see fit, on any investment that looks like it meets our criteria.
On Page 10, we are on our 15th consecutive quarter of returning capital to shareholders. We believe that this brings a level of discipline to how we run our business. And we are very proud to be one of the companies that paid a dividend in the second quarter of existence when we started this company in June, 2014. One of our priorities was to be a top-end dividend payer within this space. And we are currently yielding 1.6% to the market, which is within the top 5 companies in this space in terms of dividend yield.
So not only do we have good underpinning asset value, we are also paying everybody to stay with us in a very aggressive fashion compared to the rest of the space.
Page 11. I want to go through the acquisition that we executed with Victoria Gold, our new partners. We currently own 15.5% of the company, and we have a 5% top line royalty on the asset. This is an asset that is fully permitted and currently under construction. John McConnell and his team are highly capable people. They've built lots of mines in the North before. I met Mr. McConnell when I worked at Nanisivik back in the '80s. And he was my manager then, which was on Baffin Island. Couldn't be a better GM to operate in the Yukon than John McConnell and his crew. We financed the company for up to -- for $148 million of a $500 million overall project financing. So the project is a 100% financed now. And it's located 85 kilometers now north of Mayo, which is a well-known mine district. It's a drive-to site, not a fly-in, fly-out. It has reserves of 123 million tons at 0.67 grams for a total in-situ resource of 2.7 million ounces. We see significant upside in the geological environment in which this deposit is found. There are several historic high-grade deposits in the area. And now that we have a beachhead in the area we think that this is a camp-style play, and we're going to be here for a good time, a long time and make a lot of money in this camp. And I'll be looking forward to developing it. We think the Yukon is the premium jurisdiction in the world right now to invest in, in terms of regulation, in terms of being mining friendly and in terms of geological potential, this is the best of the best.
Looking for 10,000 ounces a year average gold GEO production for us, which would make it a -- one of the cornerstone assets within the Osisko family of assets. It's a very simple project. It's essentially a pressure and a heat leach and yellow dump trucks. So not particularly challenging on the technical side, but lots to do in terms of upside.
On to Page 12, the real review of our geopolitical risk management system, we've stayed dominantly Canadian, dominantly in North America and in premium jurisdictions in South America. As you can see, most of our key assets, Renard, Ãléonore, Canadian Malartic, Brucejack, Bald Mountain, Parral, Island Gold, Gibraltar, Seabee and Vezza are all Canadian assets. And in South America, we're essentially -- the biggest asset we have there is Mantos. And again, in other premium jurisdictions. Other assets that we own right now, Sasa, Kwale, Matilda and Amulsar in Armenia, but all in all, pretty much a dominantly safe jurisdiction asset base.
Page 13 shows our near- and medium-term cash flow assets that we're seeing right now. We've -- as we talked about, Eagle is under construction now. And I'm very happy to announce today that Barkerville poured 44 kilos of gold last week, and we will be receiving our first gold shipment from an accelerator company. For the accelerator model has gone from conception to execution to production, and we are now receiving gold from one of the accelerator companies. And we have a 2.25% royalty on that. So we are actually -- have gone much faster than I had thought we would in the accelerator model. And that Barkerville is now in full-scale production and shipping gold to Osisko Gold Royalties from the Cariboo mine site.
We also have earned a 1% royalty on Hermosa, which Richard Warke and his team have done a most excellent job of advancing in Arizona, one of the best zinc discoveries in the world and are currently snaking ramps out. That 1% royalty that we purchased 2 years ago has gone up in value significantly as they derisk that project. We've also seen great progress from Osisko Mining at Windfall. We have a pending resource coming out at Windfall. Last year, we had 24 drills turning at Windfall and it was probably one of the most intense exploration campaigns in the world, if not the most intense. So we're going to see the product of that exploration result, coming out later in the month.
Other assets that are performing for us, Pandora with Agnico Eagle, Lamaque with Eldorado, Marban that sells within Osisko Mining. And obviously, the one, the only, Canadian Malartic continues to deliver with new discoveries at Odyssey North and South at East Malartic. We also earned a royalty of 18.5% gold stream and a 75% silver stream on the Back Forty project owned by Aquila in Michigan. So we have a lot of growth assets that are already paid for. So as those assets move through the value chain, no further investment required for Osisko Gold Royalties, but we will be the benefactor of all that investment and all that production.
Summary slide on Page 14. As we said here, we're about to celebrate our fourth year in business in June. We started this company into an IPO after the sale of Canadian Malartic June 17, 2014. We now have a 130 royalties and streams, 5 cornerstone assets, 20 assets in cash flow, paying at an effector leading 1.6% dividend, Precious Metal-focused, Canada-focused, 20,000 GEOs delivered in Q1 of 2018. This is a company and a business that makes money 24 hours a day, 7 days a week, 365 days a year. And we have a growth pattern to go from 8,000 ounces now to over 150,000 ounces in 2023 without any additional investment. The balance sheet is in great shape. We have $382 million in our equity investment, which we're seeing a lot of derisking going on in terms of the resources being delivered, as Barkerville delivered 1.6 million ounces, as indicated yesterday, and 2.2 million ounces in preferred resources in our main resource [Cariboo] District, and we have many more things to come in the near term in terms of the accelerator companies as they build up. Over $200 million in cash and over $250 million of undrawn debt credit facility.
So we are in great shape going into 2018. A lot of the foundation work we've done last year. We executed the acquisition of the Orion portfolio for $1.1 billion, making it the largest royalty and streaming transaction since the IPO of Franco-Nevada in 2010. And we continue to blaze trails and create new business models within the royalty and streaming business. We are looking forward to a very innovative year. We have a lot of good things in the pipeline, and we are contributing to cash flow and we're seeing a strengthening and a maturity within our accelerator model, transitioning from concept into reality with the addition of resources and production within that group of companies.
On that note, I will open it up to any questions that we have for today. And I thank everybody for taking the time. I know this has been a busy couple of days for reporting. So I appreciate everybody's effort in terms of participating in today's call. And I'll now take any questions that anybody might have.
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Questions and Answers
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Operator [1]
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(Operator Instructions) Your first question (foreign language) comes from the line of Kerry Smith with Haywood Securities. (foreign language)
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Kerry Smith, Haywood Securities Inc., Research Division - VP & Senior Mining Analyst [2]
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Sean, just one thing, one question kind of on a more strategic level. With competition is pretty fierce for the [sort of claims in OR] royalties in the gold and silver space. Do you see much opportunity for you to find royalties, or creating royalties in, say, the cobalt, lithium, graphite space? They are kind of esoteric mine and [rattles], but it just seems like the competition is pretty stiff for the precious metals stream. I just wondered what the deal flow might be like in those other specialty metals.
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [3]
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Good question, Kerry. Obviously, we're the first one to print the deal and our royalty is 5%, top line royalty of Victoria this year. So competition being what it may, we've been in the front. In terms of alternative metals, we look at them from a strategic base quite often. We haven't executed anything in that space to date, but we are active and aware of it. And as you well know, a lot of the crew that works for Osisko Gold Royalties came from Cambior. They built (inaudible) and they have a fairly good view on specialty metals. So we are aware and [gainful] about operating within that space. And we will take them as they come, but we have not executed anything yet. But that doesn't mean that it won't happen in the future.
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Kerry Smith, Haywood Securities Inc., Research Division - VP & Senior Mining Analyst [4]
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Okay. And just a second question. Can you remind me the timing of -- how the buyback works on the Pretium stream and the offtake? Just remind me of the timing on that if it's going to happen (inaudible)
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [5]
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No. The Pretium offtake, they have several conditions on the offtake that are important to remember. They can't execute the offtake until December 31, 2018, at which point they would be paying us USD 116 million. Once again there, they have to retire all of the debt held by Orion. So until the debt deal is done, they can't execute the buyback. Then there is a second date, December 31, 2019, at which point in time they pay us in excess of USD 130 million, same conditions apply. Two things noteworthy, we also own an offtake agreement for 50% of the gold that's produced by the mine that we market. We have a 6-day look-back window on those gold purchases. And if you look at our offtake win, we had about $2.4 million of gain to the offtake agreement. A lot of that came from the Pretium offtake. Another note on the Pretium buyback is that should the company be sold before those buybacks are executed, we would split a, I think it's just over 13% of the gross sale value of the company between ourselves and the other offtake agreement. So we have many ways to get recurrence on Pretium between here and now. If those offtakes do not get executed and the company does not get sold, we would start to receive -- we would try to receive our stream in 2020. Quite happy to fill you in on more detail on that. If anybody wants to send in a note, we're -- all the information is public. But we'll give you a summary of how the deal works if that helps. But we think that Pretium, it's always been a question of the stability of the resource. We think that Pretium is going to have quarter-by-quarter sort of up and down because of the way the ore body works, but in the overall basis, this is a world-class asset. It's going to perform. And on whether the [buy-to-back] gets executed or not, we're strongly rooted to the Pretium project. We think that there's lots of upside in the Valley of the Kings and in the Golden Triangle in general. And we think that, that is -- this is the very beginning of the redevelopment of the Golden Triangle. So we're quite keen on the asset, quite keen on the overall camp play there.
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Operator [6]
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Your next question (foreign language) comes from the line of Carey MacRury with Canaccord Genuity. (foreign language)
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Carey MacRury, Canaccord Genuity Limited, Research Division - Analyst of Metals and Mining [7]
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You mentioned 150,000 ounces by 2023, I'm just wondering if you can give a bit of color on which assets do you see coming into production to drive that.
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [8]
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Sure. Obviously, we have landed in the shoot right now, we have the ramp up at Amulsar that is scheduled to happen in the fourth quarter of this year as they finish their construction. We have Pretium, we have Back Forty in there and we have Eagle, which is under construction as we speak. So all these projects are fully financed and underway for the most part. And we expect to see those assets in the food chain between now and 2023.
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Carey MacRury, Canaccord Genuity Limited, Research Division - Analyst of Metals and Mining [9]
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And then secondly on Victoria. We've seen a lot of the transactions that involve streams. I'm just wondering was there something particular about why you used the NSR model there rather than a stream?
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [10]
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I think at each company has their preferred model. For us, royalties are more tax-efficient. And we prefer them for their simplicity. And I think from a management standpoint, the royalty is quite straight forward, and the Yukon asset. So most of these deals are tailored around the jurisdictional regulations that makes the most advantage. So in terms of where it fits for us, it's a 100% margin gold. So it's obviously very good for us and for the company. It's the most efficient way to get to capital as they require to build this asset. And we partnered up with Caterpillar Finance. Orion and ourselves delivered a full package of $500 million here. So that, I think, in terms of how you look at project financing at the end of the day, it's about the asset, and all of the financing is related to the asset. And this was the combination that worked the best for this situation.
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Operator [11]
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Your next question (foreign language) comes from the line of Dan Rollins with RBC Capital Markets. (foreign language)
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Dan Rollins, RBC Capital Markets, LLC, Research Division - Head of Global Mining Research and Analyst [12]
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Sean, just on that last question, when you speak about Brucejack, are you including the stream or you assuming that's been bought back and it's just the offtake in that 150 sort of number?
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [13]
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If you look at our presentation Dan, we've always shown it assuming that the Brucejack buyback has occurred, which represents about 20,000 ounces a year by the time we get to 2023. If it doesn't happen, then we would add 20,000 ounces to our assumptions.
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Dan Rollins, RBC Capital Markets, LLC, Research Division - Head of Global Mining Research and Analyst [14]
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Okay. Perfect. And then just with respect to the deal flow going forward, if we look at more a precious metal-focused opportunities, what do you see out there in the pipeline? I guess, 3 to 6 months ago, it would have been more development-stage opportunities. Obviously, you've pulled the trigger on Victoria there. But do you see the pipeline still pretty good right now? Or are you starting to see a bit of a wane in the opportunities?
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [15]
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Well, obviously, the performance of current equity markets that set the stage for royalty and streaming. I don't think anybody's going to achieve much project financing through equity offerings at this point in time. As you would be well aware, Dan, the amount of equity deals that have been executed in 2018 are close to 0. So the only thing that's getting done right now, I believe, are equities associated with stream or royalty deals, debt deals and [require] or take back loans is really the only sort of financing for development projects right now. So we see it very much as a development market, until the equity market opens back up. But we know that there is probably 100 companies that need to do equity deals right now and they haven't been able to get any traction on equity at the [office]. So we've focused on combining with our partners to do full financing offers, where we're providing everything that we need to do. We're seeing an awful lot of discussion about M&A that often requires the injection of cash in the transaction to make it work. So we see both M&A and project financing being the business of 2018. And I don't think there is any shortage of opportunity. If I had a dollar for every call that I got to be in an equity deal this quarter, I'd probably be golfing with you, Dan.
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Dan Rollins, RBC Capital Markets, LLC, Research Division - Head of Global Mining Research and Analyst [16]
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And then just with the -- you mentioned your partners and the full financing package. Before, the royalty stream would have been there with equity, with the debt component, the equity component is not there. Do see yourselves working with Caterpillar in the future, potentially, Orion in the future and maybe other parties to offer this full-fledged financing package? And how would you compare your ability to do that relative to your peers right now?
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [17]
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I think we're in pretty good shape, Dan. The -- our traditional relationship has been with [SCSQ] , [KSCFO] , CPPIB and, obviously, Orion is now a big shareholder of Osisko. And then we've had good partners in terms of everything we've done with BlackRock Fidelty, [Kevin Gee], Tocqueville, especially has been a great supporter. And also Franklin out of California. So we think that, on a debt provisional basis, we have several partners we can work with. We want to be part of a full solution because there is no use in having a royalty on a partially financed project. You need 100% financing so the royalty can have value. And as you know, we also -- we like to partner up with groups in technical support. And our technical team is still very much intact and very active to the accelerator companies. We've been able to preserve all of our technical capacity. [Yenipazar] is leading the charge over at Falco, but we have mine building, and we operated the largest exploration program in the world last year with 41 rigs turning. So we have quite a bit of depth on the bench in terms of drillers and exploration transitional to develop a staged project. As you saw, we just drilled out at Barkerville and we are currently -- Windfall has been drilled out. And we're getting ready to announce the resource there. We delivered the feasibility study on Falco. So you know, we're active on a lot of fronts, and we've kept our technical integrity alive. And I think that we're a catalyst investor that debt lenders and people who are maybe not as technical as us would like to have in the mix for project financing. So that's where we see our niche, is that we can be an elite on a project financing. We can provide technical oversight for the group as the lead financier in these segments. And for the companies that we're investing in, it gives them some peer review as the depth on the bench for any technical services that they may as a single-asset company not have available to them. So I think we're pretty happy with how our business is set up, Dan. It's taken a little bit of while for the market to adjust to it, but I don't think there is any doubt at this point in time that the potency of our model is coming to bear, especially the downtick market like we're in right now.
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Operator [18]
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Your next question is from the line of Mike Jalonen with Bank of America.
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Michael Jalonen, BofA Merrill Lynch, Research Division - MD [19]
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Sean, but I just -- a lot of my questions were answered, but actually one that's kind of struck me on Page 12, 13, your geographic diversification. Obviously, you have a couple of assets. Few in South America, 1 in Armenia, but you are obviously very North American-centric. Is there any thought process to go in afar and like some of your -- like Franco's quite into Australia now. So just -- and Wheaton is into LatAm, all along with Franco. Just wonder what your thought process is there.
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [20]
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Well, Mike as you know, we've had quite a bit of success in Canada. And I think that we -- 2 of our accelerator companies have generated significant opportunity within Canada. Our accelerator companies collectively control over 10,000 square kilometers of mineral licenses in Canada. So that's the best, where we start. Every investment outside of that is really about the operator. I know -- I'm not too concerned about the jurisdiction, but if we're with the right partner who understands and can manage that jurisdiction, we are quite willing to go with them. And in terms of, you know, are there major or mid-tier companies that are operating in those jurisdictions who are quite willing to participate financially as long as the corporate has the integrity for the jurisdictions that they are in. So we'll be looking more at that. But as you know, we just did another Canadian deal in Q1. We led the charge. I don't think there's been another significant royalty deal done so far this year. So we're first out of the gate, again. We did the biggest deal in the sector last year. And we got a good start on 2018, and again, with Canadian assets. So we will stay on the Canadian team, but once we leave Canada, it's really about the operator.
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Michael Jalonen, BofA Merrill Lynch, Research Division - MD [21]
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Okay. Maybe just one follow-up. How many more companies would you add to your accelerator line-up there? I think you have around 10, if I'm counting right. What's the optimum number, because you said you get a call every day now?
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Sean E. O. Roosen, Osisko Gold Royalties Ltd - Chair of the Board & CEO [22]
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I think where we are, Mike, is that as long as we see value and we can contribute -- we don't do these incubator or accelerator companies unless we have market participation alongside of us. So we'll follow, a bit, the market, what they want us to do. As you saw, we created Osisko Metals last year to participate in the zinc plays. We are -- we've also added Minera Alamos in Mexico to our portfolio. And now, we've added Victoria, where we own 15.5%. As long as there are good companies with good management teams, with good ideas, we're going to be there all day, every day. And I don't think there is a limit to how many we would do, but there is a limit to how much our equity book would be. I don't think that we want to see our equity book expand much further in terms of dollar value than what it is now. So what I would say to you is that we're probably at a sell something to buy something stage with our equity book at this point. And we want to recirculate that cash. So just to reiterate, if you look at our equity book right now, we have $382 million invested. But in the last 3 years, we've already have realized gains of $70 million. And the royalties that we earned in that we invested $90 million in side-car royalties, because generally speaking, the only time we own an equity is if we've got a royalty or streaming opportunity. And the value of that $90 million investment into royalties and streams that we've earned on the way into this is well in excess of $200 million. So in -- the way we look at it, Mike, is that our accelerator model has almost paid for itself already. We see it -- in our minds, we see about $170 million, $200 million of returns from the accelerator model the way we think about it. And we've already earned, which is far superior to any royalty and streaming project that has been out there. So it's been a potent part of the business. And now that a lot of these accelerator companies are moving from concept to resource onto [PA] feasibility, we see the gel of the value in that. And I think you will see throughout 2018 the potency of the accelerator companies. And the capital at risk, the way I think about it, if I take away the value of the royalties and the value of the realized gain of the current equity book, we don't have that much capital at risk to execute this strategy. Shareholders need to understand how close this thing has been. We've been very fortunate in terms of our equity return. Not many people have realized $70 million gain on a $300 million equity book in the last 3 years. We've been able to do that. Those are tangible assets. I can tell you the numbers because we've sold the stock and we've harvested the position. So that's where we are. 2018 will be a lot of us explaining to people how many -- what the significant returns have been on the accelerator and incubator model for us. And we think that we have a lot less cash exposed in the accelerator model than the market is actually perceiving right now. So that's one of our main themes as we go forward into the rest of 2018.
All right. That's our last question for today. Thank you, everybody, for calling in today. And we will be working on the cufflinks answer today.
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Operator [23]
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Ladies and gentlemen, this concludes today's conference call. You may now disconnect. (foreign language)
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