Osisko Gold Royalties raises $85 million

Osisko Gold Royalties Ltd. [OR-TSX, NYSE] said Wednesday April 1 that it has raised $85 million from a non-brokered private placement of 7.72 million common shares priced at $11 per share.

Osisko shares declined slightly on the news, falling 1.6% or 17 cents to $10.33.  The shares are currently trading in a 52-week range of $6.35 and $17.47.

On March 30, 2020, Osisko said it had entered into an agreement with Investissement Quebec for a non-brokered private placement of 7.72 million shares. Upon closing, the company said Investissement Quebec would hold 5.04% of the issued and outstanding shares of Osisko.

Net proceeds of the private placement will be used for general working capital purposes, the company said.

Osisko Gold Royalties is an intermediate precious metal royalty company with a focus on the Americas. It holds a portfolio of over 135 royalties, streams and precious metal offtakes. Its portfolio is anchored by a 5% NSR royalty on the Canadian Malartic Mine in Quebec, which ranks as the largest gold mine in Canada. Osisko also owns the Cariboo gold project in Canada as well as a portfolio of publicly held resource companies, including a 15.9% interest in Osisko Mining Inc. [OSK-TSX], a 17.9% interest in Osisko Metals Inc. [OM-TSXV, BWMXF-OTC] and an 18.3% interest in Falco Resources Ltd. [FPC-TSXV].

The company generated cash flows from operating activities of $17.2 million in the fourth quarter of 2019 as well as a record $91.6 million in 2019, marking an 11% increase from the previous year.

Osisko also posted record revenues from royalties and streams of $38.9 million for the fourth quarter of 2019, bringing total revenues in 2019 to a record $140.1 million.

The company met its guidance by earning 78,006 gold equivalent ounces in 2019. However, it reported a net loss of $155.2 million in the fourth quarter of 2019 or $1.04 per share, bringing the net loss for 2019 to $234.2 million or $1.55 per share.

Speaking about the financing, Osisko Chair and CEO Sean Roosen said he is pleased that Investissement Quebec has shown significant confidence in the company’s business model during exceptionally volatile times. “The management and board of directors of Osisko felt it was prudent, in the wake of the COVID-19 disruptions, to bolster our balance sheet to weather whatever volatility may still come,” he said.

“The private placement also provides the company with added flexibility for acquisitions of new royalties and streams. Going forward, we see the number of, and the quality of, possible royalty and streaming transactions improving significantly.”

Osisko has previously said it expected to earn between 82,000 and 88,000 gold equivalent ounces this year from its portfolio of royalty, stream and offtake interests. For its 2020 guidance, the company said silver, diamonds, and cash royalties have been converted to gold equivalent ounces using commodity prices of US$1,450 per ounce of gold, US$17 per ounce for silver, and US$70 per carat for diamonds.