Good morning. I'm your host, Joanne Jobin, and welcome to another Gold Royalty Townhall Forum hosted by VIDMedia. Before we start, I'd like to introduce CEO, David Garofalo; John Griffith, Chief Development Officer; and Andrew Gubbels CFO, who will provide an update on recent financial and operating results for the company. After their presentation, I'll be delighted to moderate submitted questions from our audience. Now a few words on the company. Gold Royalty Corp. is a precious metals-focused royalty and streaming company, offering creative financing solutions to the metals and mining industry. It currently has a diversified portfolio of over 190 royalties located in mining-friendly jurisdictions throughout the Americas. The company's business model includes acquiring royalties, streams and similar interests at varying stages of the mine life cycle to build a balanced portfolio offering near, medium and longer-term attractive returns for investors. Now before we get started, I would like to remind you that if you do have any questions for the company, please place them into the Q&A tab at the top of your chat sections. And please ensure that you fill in the short questionnaire at the end of the presentation, as this helps us and the company communicate more effectively with you for future events. And before I turn it over to the team, please note the forward-looking statement at the beginning of this presentation. Gentlemen, the stage is yours.

Thank you, Joanne. Good morning, everybody, and welcome to John and Andrew as well, who'll be presenting along with me, and Andrew will be providing a highlight on the financial results for the quarter and our forward-looking projections, and John will walk us through our portfolio, a very extensive portfolio. Actually, now 216 royalties across the portfolio, heavily concentrated in the Americas with even significant concentration in Nevada, Quebec and Ontario, the 3 best mining jurisdictions in the world and some of the best producing gold assets in the world. And we'll get into that in a bit more detail as we go through the presentation. But I thought I'd spend a minute talking about the rally in the gold price of late. And as we've said in the past, when we talked about the fundamentals for gold, we've always said it's more monetary instrument than our commodity. And really what drives gold price up and down as relative to interest rates. While gold as a monetary instrument has always yielded zero. Treasuries today, whether it's U.S. treasuries or whether we're looking at the European monetary instruments or in the Western world generally are really yielding negative on a real basis, even as nominal rates are starting to go up, we're seeing inflation accelerate. And inflation will continue to accelerate, because central banks are dealing with a quandary in that we're seeing the monetary system, particularly financial services system start to collapse underneath, because all the accesses that have been introduced into the system since the credit crisis of about 15 years ago, there's been a massive expansion of money supply and excess debt and as interest rates go up, servicing of debt has become a significant challenge, and we've seen the evidence of that in the financial sector as…

Thanks, Dave. You would have seen yesterday, we announced our financial results for the quarter ended December 31, 2022, with the change in our fiscal year-end from September 30 to December 31. This period will become the fourth quarter of what will be our 2022 fiscal year. In the December quarter, we continued to generate robust revenue from our portfolio, earning $1.1 million of total revenue and option proceeds for that 3-month period. Now that's an 11% increase from the same period in 2021. This is largely due to revenue -- higher revenue contribution from some core royalties such as Canadian Malartic and Borden. For fiscal 2023, we do expect total revenue and option proceeds to increase year-on-year, and we've put forward guidance of $5.5 million to $6.5 million in total revenue and option proceeds for a year. We end the calendar year with a strong financial position as well. We have cash and available liquidity of approximately $35 million, and we're well positioned to fund our business and continue to grow the company throughout the year with this liquidity position. Finally, in fiscal 2023, we also expect recurring cash operating costs to be between $7 million and $8 million for the year. Now this would represent a circa 30% decrease in recurring operating costs from the prior calendar year and reflects the evolution of our company after a fast start on the IPO, and 3 large strategic acquisitions in our initial growth phase. Now beyond our financial results, I do want to highlight the company's progress with respect to ESG and ESG disclosure. In 2023, we joined the UN Global Compact and will disclose our ESG performance in an inaugural sustainability study in and around our Investor and Analyst Day in May. Alongside the sustainability report, we also expect to publish our first asset handbook. This important document will provide investors with a detailed look into the assets that make up our market-leading growth portfolio. Now with that, I'll pass it over to John Griffith, our Chief Development Officer, to step through the assets.

Thank you very much, Andrew. And it's a pleasure to have you all join us today and thank you for your time. It's worth recalling that it was only 2 years ago that we went public with a portfolio of 18 royalties, and we now have over 200 royalties that are fully paid for in a portfolio poised to deliver multi-decade growth. Our portfolio places us in the top 5 in terms of the number of royalties behind the likes of Franco-Nevada, Sandstorm and Triple Flag. Our portfolio is organic in the sense that many of the assets are moving forward in the very capable hands of some of the world's leading well-capitalized and socially responsible gold producers as noted at the bottom of this page. As our key top-tier operating partners work to move these assets along the development pipeline, they become increasingly valuable without Gold Royalty having to raise any additional capital or incur any additional costs. Our 7 producing royalties are closely shadowed by 14 royalties on development assets, many of which will be in production over the next several years, delivering peer-leading revenue growth. Behind the pipeline of development royalties, we have another 38 advanced exploration royalties with resources, many of which present very large gold resource endowments, and the scope to rapidly move into the development trend such as Fenelon. And then we have over 150 exploration royalties, many of which are in the most prolific gold producing regions in the Americas. These royalties provide significant option value to provide meaningful future value accretion over time. Turning to Slide 9. As mentioned, the producing and development royalties in our portfolio will be the key drivers of our peer-leading growth over the next several years. Using research analyst consensus estimates, Gold Royalty is expected to deliver…

Thanks very much John, and thank you all for your attention today. And I think what's indisputable is that we are headed into what I think is unprecedented bull run for gold. The ingredients are there in terms of an accelerating inflationary environment, a likely pivot by the Federal Reserve and central banks globally to easing monetary condition, because they're changing -- they're faced with the conflicting challenges of high inflation, but also a financial contagion, and they're going to have to do increasing liquidity to stave off financial room within the financial services sector, not unlike we had in the great financial crisis just 15 years ago. So we're likely to enter into a period where gold will exceed all-time highs of $3,000 an ounce on a real basis. In that type of environment, we do expect gold equities to respond. And was also striking is that gold equities have not responded even though gold on a nominal basis is achieving all-time highs again, we've still seen gold equities discounted severely from where they were. The last time gold was above $2,000 an ounce, at least 30% below the all-time high. In the producer universe, I think that's factored by or influenced by the fact that producers are not immune from inflation that we're experiencing in the general economy and that certainly weighing on their valuations. That's why we believe that the royalty space is the best place to get optimum leverage to the gold price and optimum leverage exploration while protecting yourself from inflation in the underlying gold producer universe. And no company is better positioned for rising gold prices than Gold Royalty from a couple of respects, we have increasing production from our underlying royalty portfolio, and we have peer-leading growth in revenue. Admittedly, we're in a space in the equity markets where growth is being severely discounted as nominal rates go up, and that certainly led to underperformance. But we think that as monetary conditions ease, as the gold price goes up, we're uniquely positioned to provide the best growth from the best jurisdictions in the world, Nevada, Quebec and Ontario, where we have a heavy concentration in our portfolio. And as I said, we have optimum leveraged exploration. Last year -- our operating partners invested over $200 million or 700,000 meters of diamond drilling under underlying properties, growing the reserves and resources and exposing our shareholders to that exploration upside, and we expect a similar exploration focus from our operating partners over the course of 2023, which will lead to further exploration upside within our portfolio. So I think we're excellently positioned to not only grow our cash flow, but also grow our dividend over time, and also well positioned with strong liquidity on the balance sheet to participate in new opportunities as they come our way over the course of the next year or so. With that, we'd be delighted to take questions from our shareholders. Thank you so much for your attention today.

Thank you, gentlemen, for a fantastic update, and thank you for your time today. By the way, we had almost 120 participants on this call. So well done. I can see by their comments and the questions that many of your shareholders appreciate the opportunity to be able to interact directly with you. So with that, we'll start taking Questions. Just let me come into the portal. Here we go. Can you please outline the specific areas where cash operating expenses can be reduced to achieve the 2023 guidance level? And also, can you break out between the royalty revenue and the option proceeds to get to the 2023 guidance?

Sure. I can take that. So the recurring cash operating expense reductions through 2023 is likely to happen in a few areas. First off, I think everyone will be aware and understand that we, as a company, made 3 large acquisitions post IPO, we had a major subsidiary in Nevada and Val-d'Or, Quebec at the time. One of the things that we are in the process of doing and will do through 2023 is consolidate and reorganize those subsidiaries, such that there should be elimination in excess overheads in those areas, reduction in consulting costs, et cetera, as one thing. We do expect also as the company was established, the moderation in the office and IT setup costs through 2023, as the company stabilizes that sort of happens once. Also refocusing marketing and our costs through 2023 should be helpful to get to meet that guidance for costs. So those are the key areas that we'll focus on for cost reductions to meet that $7 million to $8 million recurring cash operating expense guidance. Now on the question about royalty and option proceeds for 2023. Approximately 40% of that will be from our royalties with the majority coming from the Canadian Malartic mine and approximately 60% will be options, AMR, et cetera.

Thank you, Andrew. Next question, and we've had a lot of questions about this regarding the performance of the stock. Can you discuss why there is pressure on the stock? Or as I like to say, what is the market missing?

Look, I think as I alluded to a little earlier on, when I provided a summary of our presentation, growth has been severely discounted in this market. In a market where interest rates are rising, we're seeing our growth significantly discounted. Our growth stories are definitely not in both. Immediate cash flows getting a premium. And admittedly, our cash flow in the short term is not as significant as it is over the next 3 to 5 years as we crystallize that growth from an enviable portfolio in the Americas. And so as interest rates start to pivot downwards, and we firmly believe that the Federal Reserve and central banks globally are going to undertake and are undertaking a grand pivot to easing monetary conditions. And we start to see generalist equity start to participate in the gold market, and they've been largely absent up to this point, and we've seen that in the underperformance in mining equities generally. I think you're going to see a premium place on the kind of growth that we can offer, growth that's fully funded, I should add. As I said, we have 216 royalties, but they're all bought and paid for. We don't have to put another dime into our growth, nor do we have to put a dime into the significant exploration programs that our operating partners are undertaking. All of that growth really comes for free, because all of our royalties are bought in paid, but we just have to wait for that growth to crystallize. And the value accretion on a per share basis is immense, because our share count is static and our growth is immense. And that's the opportunity we see as we start to see capital reallocated back into the gold sector. Just to give you a sense of the upside potential within the gold sector generally, if you look at global asset allocation, it's only a small fraction of 1% of capital globally, it's allocated to the gold sector and physical gold. It would only require a small reallocation of capital, really a rounding error to significantly enhance not only the price for gold, but also significantly enhanced valuations in the gold sector. And as that capital gets reallocated into the gold sector, it's our firm view that investors, generalist investors, in particular, are not going to be looking to invest in shrinking businesses, so we'll be looking to invest in ones that are growing not only on an absolute basis, but on a per share basis. And again, because our growth is all fully paid for, that means the per share accretion, the per share growth in our value and our earnings and our cash flow is dramatic over the next coming years, and investors coming into the space will be looking for growth again, which has not been the case up to this point.

Thank you. So staying on the gold market, what is the impact for GROY when gold goes up by $100, for example?

Yes. Certainly, look, every $100 move in the gold price has millions of dollars of impact in our revenue, increasingly so as a more significant portion of revenue comes from production rather than options. If you look at our growth beyond the next couple of years, all of that growth is coming from royalty revenue, not option proceeds. In fact, our assumptions in our revenue projections and the consensus estimates that you've seen in our chart up to this point, is that our option proceeds fall off at effectively zero over the next 2 to 3 years. And all of our growth comes from royalty revenue. That means that every $100 move has an immense impact on our revenue growth over the coming number of years. We're using [ $1,650 ] gold long term for a consensus for estimates. That's the consensus gold price. So even at current gold prices, there's upside in those revenue projections that we showed you a little earlier in the presentation.

Dave, I might add that the other thing about a rising gold price environment, because we are in royalties, that incremental revenue just drops to the bottom line. There are no costs that come with it. So it's incredible leverage. And that's one of the beauties of the royalty business model.

Thank you, John. Can you comment on Marin Katusa and why you advised his subscribers to sell?

Yes. Marin, last year really turned bearish on gold, because the Federal Reserve was starting what was at that point and still is an unprecedented increase in interest rates. And he used the phrase, don't fight the Fed. And so he actually advised his investors, his subscribers to liquidate their gold positions. It wasn't just a Gold Royalty phenomenon and obviously, he was very heavily weighted to Gold Royalty as one of his preferred stories, but he decided to make a wholesale rotation out of gold. Interestingly, in the last couple of weeks, he's pivoted back into the gold sector and is actually advising as investors to look at gold and the potential for an unprecedented bull run in gold. So I think like many of us, he's starting to see the potential for a significant pivot by central banks from tightening monetary conditions to easing them dramatically because of the prospect of a financial contagion.

Thank you. I know we've talked a little bit about pressure on the stock, but is there an actual catalyst that will help to improve the share price in the coming year?

Well, from a macro standpoint, I would say the gold price would be a significant catalyst for not just our equity, but mining equities generally, but in particular, royalty companies in the face of increasing inflation. That's the best place you want to be parked to get optimum leverage to the gold price optimum leverage exploration while protecting yourself, as John correctly pointed out, from inflation. Every dollar increase in our revenue goes right to the bottom line, because our costs are stack and in fact, have been declining by 30% from the previous years is we've integrated all of this growth that we've executed on since our IPO just 2 years ago. We're still a relatively young company, and we continue to optimize our business and optimize our cost structure. And so I think we're very well positioned for a rising gold price environment.

Thank you. I know you've thoroughly discussed the First Majestic closing of Jerritt Canyon. But is there something else that you could sort of explain to your listeners, because we're getting a lot of questions on that?

Yes. Look, I think there's a couple of things that we should point out. By consensus estimate, Jerritt Canyon represents less than 2% of our underlying value of our business. And that's the power of diversification that you can realize in a royalty company that you can't hope to realize even in the most senior operators in the gold industry. Even the biggest have no more than a dozen to 15 mines within their portfolio. So there's a limit to the diversification you can you can undertake when you're a producer, it's impractical to run more than 12 or 15 mines even if you're a very big producer like Newmont or Barrick or Agnico Eagle for that matter. And so with 216 royalties, we could run a business 10x the size with the same human footprint. We have 8 full-time equivalent employees. There's no limit to the diversification we can achieve in our portfolio. That's another unique aspect and feature and attraction of this model. And while Jerry Canyon is not in production currently, and they're still assessing first Majestic going to restart operations there. We've completely removed that from our guidance. And that represents upside now. And the beautiful thing about royalties is they don't waste, they don't decay. They don't require capital. We can just be patiently waiting for those operations to restart for First Majestic continuous exploration program and benefit from the upside from our exploration efforts were actually having to contribute. So that provides a lot of optionality for our shareholders.

Thank you, David. And is the company looking to continue to grow through portfolio acquisitions? Or are you going to rely on organic growth for the next little while?

John?

Well, one of the beauties of our portfolio, as I mentioned, is we've got some of the largest and most prolific gold producers in the world, spending considerable amounts of money drilling and further advancing all of the underlying assets in our portfolio. So without us having to do anything, there's a natural migration of the assets within our pipeline towards production. So in addition to those are coming online, which we've already discussed, we've got this further impetus for growth. But that's all organic, and it's all paid for. We're certainly very active. In fact, I'd say we've probably never been quite as active in looking at different opportunities. And you might say, well, why haven't we transacted. And I'd say, largely because of our discipline in trying to find the right opportunity that's going to be a good fit with our portfolio, that's going to be additive to our strategic imperatives, that's going to add value to our net asset value per share. And so we're looking at opportunities that I would say would be across the spectrum. Consolidation opportunities, writing new royalties, providing fresh capital to operating companies, looking at portfolio assets, looking at single assets. And I'd say also that our organic royalty generation both in Nevada and Quebec have both been very, very prolific for us in generating new organic royalties. I think the one thing I would say though, I'd probably turned down the amount of consolidation that's going on. We've already seen a considerable number of companies that have either consolidated already or certainly changed in form -- so I think the opportunity for corporate consolidation is simply a narrower window, but we're busy in all aspects of the corporate development spectrum.

So to answer one of the questions that has been asked, so you are open to looking at any M&A possibilities in the near future given the consolidation we've seen in the space recently?

Absolutely. I mean, as I said, the one thing we do have to make sure is it's a good strategic fit, we have to be disciplined. And again, we look at a significant number of opportunities. I know David has said this before, we operate almost in a perpetual state of due diligence. And I'd love to be able to say definitively and handicap the possibility of those opportunities turning into live transactions, but there are so many factors that are at play that make it impossible to really give any confidence around that, suffice to say that we've never been as busy in the corporate development group here at Gold Royalty.

Thank you, John. What is the percent -- and we've had a lot of questions about this, by the way. What is the percentage of Eric Sprott's current GROY holding?

It's really hard for us to discern any individual share ownerships unless they're doing public filings. So hard to say. But we know that we've inherited some really high-caliber shareholders over the course of our existence since our IPO in consolidating Ely, Golden Valley and Abitibi and that included not just Eric Sprott, Rob McEwen, Jimmy Lee, -- these are -- have been good strategic shareholders. And I should add, we also have Nevada Gold Mines, which is the joint venture between Newmont and Barrick as a significant shareholder as a result of the acquisition of the Granite Creek royalty last year, they're, I think, sitting at around 6% based on public filings.

I think I'll also add that Eric Sprott was a big believer in Ely assets, and they still remain within Golden Royalty Corp. So investors still get exposure to those assets through our shares, certainly.

Thank you, Andrew. There were a lot of questions regarding, I'm going to say perceived dilution of the stock. Can you comment, please?

I'm not sure what you're referring to. We haven't had any major share issuances other than for share-based compensation, restricted share units to our Board of Management forms actually the majority of our compensation is share-based compensation. But the last big significant share issuance was as a result of the M&A we've done. And we haven't issued any stock for cash of any significance really since our IPO when we raised $90 million.

Thank you, David. On average, how much time will the development projects take to generate income, 1 to 2 years, 2 to 3?

I'll take that -- maybe if we could turn back to -- I'm going to turn back to our growth slide here. So basically, as I mentioned in my prepared remarks, we're looking at 60% growth from 2023 to 2025 based on analyst consensus estimates. So that hopefully gives the person asking that question, an indication that our revenue is going to grow significantly over the next couple of years. And beyond that, it takes an entire next step, leap as Odyssey underground and production from the shaft comes online. Obviously, we've got the royalty on the southern portion of the Côté when that comes online in 2024, we -- our royalty basically sits right over the near-surface mineralization. So we expect significant revenue from Côté in its -- certainly in its early years of production. And I think Granite Creek is another asset that's going to be a massive contributor to our relatively near-term revenue appreciation. And I think beyond that, as I mentioned, we have 14 assets that are in that development pipeline pushing towards production. And for that reason, we haven't obviously provided guidance specifically out to 2027. But you'll see here that we anticipate our revenue will be, depending on whatever commodity prices you want to assume, at least at the $50 million to $60 million level, again, without us spending a single cent without us issuing a single share.

To add to that, to answer your question in terms of years, we've got some coming on in less than a year to 1 year, some in 2, some in 3, and we've got over 200 -- 216 royalties. So over the course of the life cycle if a lot of those are developed or even a handful of those, we're going to see that trajectory increase year-over-year. So it is really a mix of depending on the assets. But we do have some coming in, in a year, 2 years, 3 years to underpin this profile.

Thank you, gentlemen. How much exposure does GROY have to silver production, given the push to EVs and renewables, theoretically, that should be improving those prices for that commodity?

John, do you want to tackle that one?

Yes. I think we have a modest amount of silver exposure. I don't think it's going to be the key driver of our bottom line revenue growth. It's nice to have that exposure. We also have some exposure to copper, which I think, has a very similar investment thesis. So quite frankly, I think it's copper really that will be the commodity that really links up with the greening and the decarbonization of the global economy more than silver within our portfolio.

Thank you. How many assets we'll be producing by 2024?

John?

Gosh, I don't know if you have that one, Andrew. I think it's going to be ...

Well, '24, Côté comes on next year. That's probably the most significant addition and that's going to be quite a significant step change in cash flow. But that would be probably the most -- in 2024, that will be the most significant addition to our cash flowing portfolio. And Côté, I would just remind everybody at 0.5 million ounces a year of production is approaching the second largest in Canada production, second or third largest in Canada. And as you just add, again, to the quality proposition, we have a royalty on what's now Canada's first or second biggest producing gold mine Canadian Malartic, depending whether you look at Detour is #1 or #2. We have a royalty on Côté, which will be #2 or 3. We have a royalty on the underground extension of Goldstrike, which is the biggest producing gold mine in U.S. So John's point earlier on, Franco-Nevada being built on 1 of those assets of that quality. We have 3 of them in our portfolio, which is unprecedented for a company of our size and certainly in -- the [ MV ] of any of our immediate peers in the smaller cap universe.

Yes. No, I think we -- throughout the year, we'll go from about 7 to maybe 12 in total, 11 or 12. It should come some later on in 2024. But Dave, sorry, Côté is really one of the major contributors in 2024.

Okay, gentlemen, and we are at the top of the hour here. So I'm just going to ask one more question and that is, are any of your royalties subject to buybacks?

We have a limited number of royalties that are subject to partial buybacks. There are none that have full buyback options. So it's -- we're quite pleased to have the majority of our royalties being NSR royalties. And again, very little in the form of buydowns and none that have total buydowns.

Okay. Thank you. Thank you, David, Andrew and John, and thank you to everyone, who joined us today. If you have further questions for the company, you may e-mail them at info@goldroyalty.com. Thanks, everyone, for tuning in. It's been a pleasure to host you. We will see you soon on the next VID Town Hall Forum.