管理層發言
Good morning, ladies and gentlemen, and welcome to the OR Royalties Q2 2026 Results Conference Call. Please note that this call is being recorded today, August 6, 2026, at 10:00 a.m. Eastern Time. I would now like to turn the meeting over to our host for today's call, Mr. Jason Attew.
Good morning, everybody, and thank you for joining us on a busy earnings day. Please note that the news release and regulatory filings are available on our website and on EDGAR and SEDAR+. If you are logging into the webcast, we will advance the slides for today's presentation, which is also available in the Investors section of our website. Please also note there are forward-looking statements in this presentation from which actual results may differ and that all amounts presented and discussed will be in U.S. dollars unless otherwise noted. I'm joined on the call this morning by Frédéric Ruel, the company's Chief Financial Officer and VP Finance, amongst others, as indicated on Slide 3. Fred will take you through the financial results in a few minutes. Three things to take away from the second quarter. First, our portfolio did its job. Revenues of $97.8 million and operating cash flow of $83.2 million were both up 62% over the second quarter of last year on a 5% increase in gold equivalent ounces. That spread, 5 points of GEO growth producing 62 points of cash flow growth is the whole argument for this business model. $0.968 of every revenue dollar converted to cash margin this quarter, which is the best in the sector. Also, net earnings were up 94% to $0.33 per share. Second, capital. We closed on the Gold Fields royalty portfolio and the Spring Valley acquisitions, $335 million in total, funded largely from our revolver, which stood at $215 million drawn at quarter end. In July, we closed the Murray Brook stream as well. The second half's job is straightforward: continue to seek accretive opportunities for our owners. Third, guidance. First half deliveries were 43,497 gold equivalent ounces, which were up 12% over the first half of 2025 and has us comfortably on track for our 80,000 to 90,000 GEO range for 2026. And I want to spend a minute on why that remains true after the news at Canadian Malartic. As most of you are aware, on July 1, a rock mass movement occurred along the north wall of the Barnat open pit at Canadian Malartic. Nobody was hurt, as Agnico described on its second quarter call last week; its monitoring systems were tracking the wall and mining in the area had already been suspended as a precaution. The systems worked exactly as designed. Here is the updated picture from that call. Roughly 1 million tonnes of moved material will remain in place. Agnico will spend the third quarter building safety berms and access roads with mining in the affected area expected to resume in the fourth quarter. In total, approximately 370,000 ounces of gold are now considered inaccessible over the next three years: 60,000 to 80,000 ounces in the second half of 2026 and roughly up to 150,000 ounces in each of 2027 and 2028. Agnico now expects full year production toward the lower end of its guidance range at Canadian Malartic, supplementing mill feed from low-grade stockpiles in the meantime. Most of you would have already updated your models for this event, but I will walk you through our math. Applying 5% to those figures means roughly 3,500 fewer GEOs to OR in 2026 and up to roughly 7,500 fewer GEOs in each of 2027 and 2028. So, call it 18,500 gold equivalent ounces over three years. This, of course, would be before any mitigation or recovery activities Agnico undertakes. Three things don't change because of this. Our 2026 guidance of 80,000 to 90,000 GEO stands. Our 2030 outlook of 120,000 to 135,000 GEOs is unaffected because Barnat was always scheduled to be mined out by 2028 or 2029. In Odyssey, the future of Canadian Malartic is untouched. It set a quarterly production record of 28,800 ounces. The first phase of shaft #1 sinking was completed in July at a depth of 1,586 meters and first shaft production remains on schedule for the second quarter of 2027. Agnico was clear on this call that its journey to 1 million ounces at Canadian Malartic by the early 2030s remains unchanged. I'd also note on a more sober subject that Canadian Malartic's second quarter included a six-day mill shutdown following a fatal accident in April. Our thoughts remain with the family and colleagues affected, and we fully support Agnico's position that nothing at the operation matters more than the safety of its people. Two smaller items also moved against us. At CSA, concentrate sat on site at quarter end because of transport logistics, deferring some silver and copper GEOs into the second half. Harmony expects inventories to normalize over the balance of the year. And Mantos Blancos delivered fewer GEOs than in the first quarter, which we had flagged last quarter as silver grades were front-end loaded this year. Net of all this, we now expect the second half to be modestly lighter than the first. Barnat takes ounces out and the ramp-ups at Namdini, San Gabriel, Dalgaranga, Seabee and CSA put some back. Scoring ourselves against what we previously committed to, the 2026 guidance is on track, the 2030 outlook intact, and it still excludes any GEOs from the additional Spring Valley coverage or the Murray Brook transactions, both of which now have closed. So that outlook has contingency built in. One more thing on Malartic because it frames how we think about everything we own. Agnico's update on the path to 1 million ounces is now expected in November. And their Chief Operating Officer has publicly said that even at an expanded production rate, the life of mine could still extend out to 2060. Before Jean Sernin climbed off the moon in 1972, who was the last man to walk on it, he wrote his daughter's initials in lunar dust. Because there's no atmosphere up there, they're still there today. A royalty on a great ore body works the same way. Mine plans get revised, pit walls get redesigned, operators may come and go, the ore body and our royalty on it doesn't move. The announcement of the wall movement changes our near-term GEOs, but it changes nothing about what we own and our shareholders as well. Briefly across the rest of the portfolio, we received the first royalty payment from Dalgaranga this quarter. And at Namdini, our increased 2% royalty is becoming a significant contributor as the ramp-up hits its stride. Our portfolio currently boasts 23 producing assets and the 24th producing asset should be Cariboo Gold's Coiyu project in Brazil, with commissioning still on schedule for the fourth quarter. Slide 8 lists the catalysts ahead on assets representing over half our NAV. The three I'd watch are Harmony's fiscal 2027 guidance expected this month with an updated mineral resource estimate and life of mine plan to follow later in the year; first gold at Amulsar in September, where our stream should begin accruing from first production ahead of its first payments expected in 2028, which is largely dependent on commodity price and the pace for which the operator, United Gold, pays back their loan; and finally, an update from Agnico on Canadian Malartic's future now expected, as I said earlier, to be coming in November. On new business, the pipeline is active and our criteria has not moved. No nondilutive deals. We can afford that selectivity because our growth through 2030 is already bought and paid for with zero contingent capital. Beyond that, we don't comment on transactions until they're signed. I'd like to hand it over to Fred to talk about our financial results.
Thank you, Jason, and good morning, everyone. Revenues for the quarter were $97.8 million, up from $60.4 million a year ago, a 62% growth on 5% more GEOs driven by realized prices of $4,504 per ounce of gold and $17 per ounce of silver. Cash margin was $94.7 million or 96.8% of revenues, up from $57.8 million or 95.8% last year. Royalties, which carry essentially no cost, contributed $62.8 million of revenue, streams contributed $35 million. Net earnings were $61.4 million or $0.33 per basic share against $0.17 a year ago. Adjusted earnings were $60.5 million or $0.32 per share, up 78%. Cash flow from operations was $83.2 million, up 62%, $0.44 per share against $0.27 last year. And that per share line is the one we manage the business to. Turning to the balance sheet. We ended June with $75.6 million of cash and $215 million drawn on the credit facility for a net debt position of $139 million. The draw funded the Gold Fields and Spring Valley closings, and we also repaid $18 million on the credit facility during the quarter. On returns to shareholders, the Board raised the quarterly dividend by 18.2% to $0.065 per share in May, first paid on July 15. Our 47th consecutive quarterly dividend with approximately $300 million returned to shareholders through dividends today and a further $0.065 dividend has been declared payable October 15. Under the normal course issuer bid, we repurchased over 225,000 shares for $8 million during the quarter and a further approximately 1 million shares for $29.1 million in July, a total of roughly 1.6 million shares repurchased and canceled year-to-date. Subsequent to quarter end, we also closed the $28 million Murray Brook Precious Metals stream with Hennadton Copper together with a $4 million equity subscription. The initial $9 million was funded from cash on hand. And also in the third quarter, we expect to close the $15 million extension of our royalty coverage at Chile's Costa Fuego to include the new LaRonde discovery. Our capital allocation framework is unchanged: returns to shareholders through the dividend and buybacks as well as investment into precious metals royalties and streams with ongoing debt repayment being considered normal course, all prioritized in whatever order creates the most net asset value per share. In the first half, that meant new acquisitions; the second half, it could mean more opportunistic share repurchases. And as Jason mentioned, if we don't find and announce any accretive deals for our shareholders over this period, we'll look to reduce the debt drawn on our credit facility. And on this point, I'd like to flag that earlier this week, OR Royalties, along with the syndicate of supporting banks, officially amended its revolving credit facility to increase the amount available from $650 million to $850 million and the accordion from $200 million to $350 million. We also extended the maturity date from May 2029 to August 2030. Back to you, Jason.
Thank you, Fred. And with that, I'd like to thank everyone for listening. We'll now open up the line for questions as well as questions posted on the webcast. If we don't get to all the questions on the line, we'll make sure we respond offline. Back to you, Joelle.
分析師問答
Your first question comes from Cosmos Chiu with CIBC.
Maybe my first question is on Agnico Eagle and the Barnat pit. And thanks, Jason, for giving us a very detailed description of potential impact to OR Royalties. I guess my question is, as you pointed out, issues at the pit caused Agnico Eagle's share price to come down and OR's share price also came down in sympathy. Any concerns about concentration risk? Canadian Malartic continues to be one of the largest, or the largest, royalty for your company, and it's going to grow in size and importance as it channels towards 1 million ounces a year production. How should we look at it in the context of OR Royalties? And as time progresses, any concerns about concentration risk?
Thank you, Cosmos. It's a very good question and something our Board and management discussed this week. A few weeks back we would not have expected this rock mass movement at a mine operated by Agnico Eagle, which has an exceptional reputation as an operator. They've really put on a master class at Canadian Malartic, including the underground expansion. Odyssey is the future of our company and the journey to 1 million ounces for Agnico. We fully support that operating group, their operational and technical acumen, and the fact this asset is in Quebec. The short answer is no, we don't have issues or concerns around concentration risk. In terms of our net asset value, Canadian Malartic is around 25% to 30% of NAV in most models, so it's not 50% or 60%. We're very comfortable with the asset's location in Quebec, the regulatory environment, the experienced workforce, and Agnico's technical team. What happened was unfortunate, but their monitoring systems detected the movement and they took precautionary steps; nobody was hurt. As I said and Agnico said last week, they'll focus on building berms and access roads and ensuring safety before re-accessing the pit. So short answer: no major concerns about concentration risk. This is a crown jewel in our portfolio and as Agnico makes the journey to 1 million ounces, it is incrementally positive for our company. Thanks for the question, Cosmos.
Switching gears a bit. You touched on your longer-term guidance, your 2030 guidance of 120,000 to 135,000 ounces. As you mentioned, that does not yet include Spring Valley, Murray Brook and some of the more recent acquisitions. Could you qualitatively describe how that could potentially change your 5-year or 2030 outlook? And in terms of actual numbers coming out, do we have to wait until February 2027 before we get your updated longer-term outlook?
Another excellent question. Our process is to update the market once a year in February with our five-year outlook. Between updates, our corporate development team has added accretive assets not reflected in the current 2030 outlook. Coverage to increase to 6% NSR at Spring Valley will be incremental to that outlook. Murray Brook is also accretive and we're seeing positive momentum across the portfolio. Namdini is becoming a strong cornerstone royalty for us; we increased a sister royalty from 1% to 2% there. So yes, the portfolio is growing. When we provide our 2027–2031 outlook in February, it will include corporate development activity and recent accretive deals.
One last question. You made an incremental acquisition in Chile, extending your 1% copper and 3% gold royalties to the La Verde project. Could you quickly explain how the La Verde project compares to the main deposit and what's the potential upside? If you can quantify it, that would be great.
I'm going to hand this to Guy, who advocated for this from a geology and prospectivity perspective. Guy, over to you.
Cosmos, thanks for asking that question. The public currently doesn't have a complete view of La Verde because it doesn't yet have a fulsome resource estimate, whereas the rest of the project has a PFS. They are actively drilling to prove up resources on La Verde and plan to quickly follow the initial resource with economic studies to provide a more complete picture of the three deposits that will feed the central processing unit. If you look at the best drill holes at La Verde, they are quite similar to the best drill holes at Cordillera. In terms of scale, it's hard to map out without a full resource, but it will be a significant contributor and there is a chance La Verde could be the first of the three deposits to go into production. They are very active and the most recent drill holes are pretty impressive. I suggest you review their disclosures as they release further results.
Your next question comes from Tanya Jakusconek with Scotiabank.
Starting on guidance: thank you for sharing that the second half is expected to be weaker than the first. Originally, the quarters were expected to be evenly distributed. With the removal of ounces from the Canadian Malartic open pit, should I still be thinking that Q3 and Q4 will be similar?
Excellent question. We don't give quarterly guidance, but prior to the rock mass fall at Barnat, our H1-to-H2 distribution was approximately even. Given Barnat's contribution, Q3 will be focused on building berms and access roads and getting the site safe before re-accessing for mining in Q4. So expect Q3 to be modestly lower and Q4 to be modestly stronger than Q3. Overall, we were tracking roughly evenly H1 to H2 and you should subtract roughly the 3,500 GEOs we don't expect to receive in 2026. I hope that provides clarity.
I wanted to circle back on the debt. How should we think about balancing debt reduction and returns to shareholders assuming no other deals? Beyond paying the dividend and some opportunistic buybacks, would the priority be to reduce debt in 2027?
Good question. From a capital allocation perspective, our priority is to invest in accretive assets for shareholders. We generate strong cash flow—at current commodity prices we're generating a good run rate—so paying down debt is normal course. Our model is to dip into the revolver for accretive deals and repay over time with cash flow. We will continue to reduce the $215 million drawn as cash flow allows. We also increased our facility because we see a robust pipeline of opportunities. We can also be opportunistic with buybacks if we see significant mispricing relative to NAV per share. So normal course will be debt reduction, but we will prioritize accretive acquisitions when they are available and create the most net asset value per share. Fred, anything to add? No.
On the transaction front: has the Canadian Malartic open pit event changed your focus for transactions? Are you now looking more for transactions that add immediate production, or has anything changed?
Our criteria haven't changed. We primarily target producing assets; our second filter is development or expansion assets that provide GEOs within our five-year outlook. Those remain the two main focuses and take up most of our corporate development effort. Value and accretion for shareholders remain the deciding factors.
Are you still seeing typical transaction sizes in the $50 million to $300 million range you discussed earlier? And are you focused on Tier 1 jurisdictions?
Yes, our primary focus is Tier 1 jurisdictions—Canada, the U.S., and Australia. The ticket size we're seeing in the flow has increased; there are some very large transactions coming to market that all of the major royalty and streaming companies are assessing. We're seeing transactions in the $500 million to $1 billion range as well as the $500 million to $700 million range. And yes, they are precious metals transactions.
Your next question comes from Derick Ma with TD Cowen.
Thanks for the update on Amulsar. It's been a long road for that asset. Could you provide an update on how construction is progressing there and how United Gold has addressed some of those historic social and environmental concerns?
I'm going to ask Brendan Pidcock, who's our technical services expert and visited the site about 12 months ago, to give an update. Brendan?
Yes. I visited the site about 12 months ago along with a colleague. The United Gold team has done an exceptional job and they are tracking on budget more or less in terms of time and cost. Their latest messaging is first production mid-September and ramping up to full production probably in the first half of next year. Given the project's history with social challenges and geopolitics, the United team has put in multiple redundancies and managed those risks well. As they begin producing gold ounces, those ounces will accrue for us. The $150 million loan they received from the Armenian government must be repaid first before we see realized GEOs or payments hitting our financial statements. That accrual will be spread and paid back over a maximum five-year period as they ramp up. We are pleased with their progress and are confident the project will be a significant contributor to us in 2028 and 2029.
That would be a great contributor. Just clarifying on the accrued ounces: you have a five-year period where those accumulated ounces result in elevated deliveries? Is that correct?
Yes. The accrued ounces are spread out over five years. They accrue until the $150 million loan is repaid, and then those accrued ounces are paid over a five-year period. Our loan gets repaid at that point in time as well.
There are no further questions at this time. I will now turn the call over to management for closing remarks.
Great. Thank you very much, Joelle. I really appreciate everybody's time and energy. I do understand that it's a very busy day in terms of earnings. Thank you for your time, and we look forward to doing this again in November. In the interim, enjoy the summer. Thank you very much.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.