Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q3 2017 Results Conference Call [Operator Instructions] Please note that this call is being recorded today, November 9, 2017 at 10 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 Ms. Elif Lévesque, Chief Financial Officer and Vice President of Finance. I would now like turn the meeting over to our host for today’s call, Mr. Sean Roosen, Chair of the Board of Directors and Chief Executive Officer of Osisko Gold.

Good morning, everybody, and welcome to the third quarter call. I find myself at the Zürich Airport this morning. So I apologize for any background noise that we may have, but quite proud to present the Q3 results for 2017. The results for the Osisko Gold Royalties have been quite spectacular over the evolution of the first three years. And I think that Q3 was an extremely transformative session of business that we conducted with over $1.1 billion of assets acquired from the Orion portfolio, consisting of 74 royalties, streams and precious metal off takes, including a 9.6% diamond stream on the Renard diamond mine and a 4% gold stream on the Brucejack gold project -- gold and silver mine. Both are new mines in Canada, in addition to 100% silver stream that we acquired on the Mantos Blancos copper mine in Chile. And just by way of formalities, we do are referring to the PowerPoint that is on our website. And Page two of that PowerPoint has a cautionary forward-looking statement clause that should be read, as we will be making some forward-looking statements as we get further into the presentation. We also declared a $0.05 per common share dividend payable on October 16, 2017 to shareholders of record, and I’m very happy to see that this represents a 25% increase in our previous quarter dividend. And we are very happy that as a young company, only -- that’s a little over three years in existence, we’ve been able to pay a dividend pretty much every quarter that we’ve existed. Subsequent to the end of Q3 in 2017, we’ve been very busy as well. As of November 3, we closed a bought deal offering on a convertible unsecured debenture for $300 million to reinforce our treasury and to allow…

All right, thank you very much, Elif, and we can have a more in-depth discussion on the Q&A period if there are some issues that are unclear. A lot of moving parts in this quarter; but on to Slide 14, we do want to highlight the fact that we are a North American-based-focused asset group, and we’ve had quite a few high-quality assets within our portfolio. We have been focused on building quality in the asset base. And now, with the addition of the Orion assets, we have some exposure on the international side on what I believe are quite significant and high-quality assets as well. I won’t go through them in all detail. But today, Malartic continues to be our flagstone there, our cornerstone asset with 5% top line royalty. And Canadian Malartic was still Canada’s largest gold producer. Most recently, the 9.6% stream from Renard and the 2.3% stream that we have on Éléonore continues to ramp up. And as we look forward, we see quite a bit of development in our favor also at Mantos, where I think the management team there is advancing that project in a way that’s going to be very valuable to Osisko Gold royalty shareholders. And on to the next slide on Slide 15. Our accelerator and near-term asset companies continue to deliver a lot of value to shareholders. We have over 870,000 meters of drilling ongoing on our royalty-held lands. And our royalties and streams as well as our equity position in our accelerated companies have had a very good year in 2017 so far to date, led by Windfall, where we own a 1.5% royalty already. We now sold 15% of the equity in the company, and that company has seen significant increase in value from $10 million to over…

[Operator Instructions] Your first question comes from the line of Cosmos Chiu from CIBC.

Sean and Elif, a few questions from me here. Maybe first off, the accounting is getting a bit complicated here, so maybe we’ll start there. In terms of these off take agreements, which ones were active in Q3? And how will we have been able to calculate the $40-million-odd sort of revenue based on those numbers? Elif Lévesque: Yes. So for this quarter, we have Brucejack that’s active, probably one of the major ones. Then we have Matilda in Australia, and we also have the Pararl offtakes. So these are kind of the three. The way they work, so we do receive the ounces from the producers on a weekly basis. And the ounces that we do receive are booked as a revenue. And that’s why you see the $40-million-plus level. And then we go back, and then we sell those ounces. And that’s what makes the cost of goods sold. So we’re actually taking physical delivery from the operator for their production, and then we’re the ones actually selling them. So I think in terms of the impact, and that’s why I mentioned it’s probably more meaningful to look at this on an earnings basis, because that’s possibly going to be more, in terms of modeling, what now is going to be more interesting. What we have for the quarter was about $20 per ounce, and you could probably model something between a $20 to $30 range comfortably.

Okay. So $20 an ounce for all 3 off takes? They’re currently active at this point in time? Elif Lévesque: Yes, exactly.

Okay, cool. And then maybe switching gears a little bit. I think, Sean, as you had mentioned, the Renard, there’s been some issues since start-up. I don’t know that asset as well. So based on your knowledge, what’s happening there? I guess, in your MD&A, you talked about breakage being an issue. I would have think that diamonds are pretty hard to break. But what’s sort of happening here?

Obviously, it’s better that the management of Stornoway address that issue technically, but I’ll give you my takeaway on it, is that there is some harder material within the kimberlite that is re-circulating within the crushing and grinding circuit that needs to be removed before it comes in contact with the diamond processing. And they’re looking at introducing an ore sorting technology that’s being refined and installed now. And we’re hoping that sometime in Q1 or Q2 that, that will resolve the issue of the re-circulating harder material that’s in the source of the breakage.

Great. So I guess -- so you think that ore-sorting material or a machine blasting off some of that harder rock, kimberlite rock, and then just using that to resolve the issue?

That’s my understanding of it. That’s why I can’t really speak on behalf of the company, but that is our best understanding of it. And we think that the problem gets resolved. As you well know, our group was involved in an advisory role throughout the construction of this mine and, in particular, the mill. So we think that our guys have a pretty good understanding of the processing facility, and we think that the solution is technical.

And then maybe one last question for me here in terms of the Bermuda subsidiary that was acquired as part of Orion. It looks like you’re going to be using it more often on a go-forward basis based on what we saw with the Aquila acquisition today. Is that the plan, to run through or structure off future sort of streaming deals through that subsidiary? Elif Lévesque: Yes. I think going forward -- sorry, go ahead, Sean.

No, go ahead, Elif. Obviously, this is a tax question, so I’ll let Elif answer it. Elif Lévesque: So at the end of the day, yes, like most of the streams and the offtake agreements that we purchased from the Orion transaction are under that structure. And we inherited it, so it’s not a new structure that we actually made. And the only stream that was actually through Canada was the Renard stream. So going forward, of course, anything that’s related to those assets will go through that entity because they are actually that entity’s asset, and we’ll probably be looking at international deals out of that subsidiary as well.

Your next question comes from Tony Lesiak from Canaccord Genuity. Your line is open.

I was hoping you could provide some longer-term guidance for Mantos given the mine plan changes we’ve seen there and the expansion potential for the concentrator.

Yes. I don’t think that I’m really in a position to give you too much insight right now, Tony, and I apologize for that. But it is a private company, and they are working on several progress issues there. I think that they’ve made, obviously, quite a bit of progress in terms of establishing a new management structure under the new corporate structure. We have met with management last week and are extremely encouraged with the changes that are made. But I don’t think that I can go forward with too much guidance on that other than to say that the status quo is good, and any improvements will be better. So that’s where I’ll have to leave it today.

I mean, you mentioned the 70% concentrator expansion number. I mean, is that kind of directly associated with attributable silver production?

Joseph, do you want to jump in here? You’re more up to speed in terms of what we can discuss on this one, given that it’s a private company.

That’s correct. So they’re currently in the devolve making process at the concentrator, which is yielding good results on things as a direct correlation in that increase to the silver production.

A strategy question for you, Sean. Is the offtake business really worth the effort? I mean, a small part of your NAV, low margin, it’s volatile, you’ve got some accounting challenges there. What do you think of that?

I think it’s a pretty solid part of our business. We are already set up to handle precious metal trading. And we have really no extra cost to being in that business, though I do realize it makes some noise when you’re trying to do your quarterly. But it’s delivering significant returns to us. And the only time that we actually -- we would be in a zero-revenue position on a stream would be at stable commodity prices. So as long as we have a little bit of volatility in commodity prices, this is a pretty good source of revenue with relatively little low risk. So it’s not going to be a huge part of our business, but it is going to be, what I believe, a nice, consistent delivery of a little spice in the soup.

Okay. Just on the revenue number that you’re showing for the quarter, the 1,296, does that include the gains on the offtake side? Elif Lévesque: The revenues on the income statement does include the offtakes, yes.

So the 1,296 realized price that you’re quoting includes the sum, $20 an ounce, that you were mentioning? Elif Lévesque: Exactly.

Okay. And then finally, just on the Aquila transaction. In your minds, like what are the key issues revolving around that final issuance of that final permit? And any comments on timing?

I’m going to refer this one back to Joe. There’s quite a bit of background noise here in Zürich. So Joseph, over to you.

Sure. So as you know, the company just hanged three of the four major permits that they need to put the mine into production. The last permit they need is a wetlands permit. So there’s a very small wetlands on the property. They’re in the process now of applying for that permit. And our understanding is that on the current time line, they expect to receive the permit sometime in Q1. At which point, they would also likely issue their final feasibility on the project.

Well, thanks, Tony, and let us know if there’s anything else that comes up in your review.

[Operator Instructions] Your next question comes from Mike Jalonen from Bank of America. Your line is open.

Sean, just a strategy question. When Osisko started out, you really made a big statement about being Canada-focused. And now with your Bermuda office, you mentioned going global. So I’m just wondering if this is a natural evolution or buying an Orion, you just kindly stumbled into this. I’m just wondering what your thinking is.

Well, obviously, Mike, I think we’ve done a pretty good job of being involved in some of the best and most strategic assets in the precious metal space in Canada. It is, obviously, our backyard on where we operate and where we know things well. And we’ve continued to make investments in Canada. The most recent press release that we announced today was in Michigan, just across the border. The acquisition of the Orion platform did afford us to come up with a competitive platform that we can use to invest on the international side. But I still believe that being dominantly invested in Canada, having the Canadian dollar as a natural hedge in terms of protecting margins on the gold price is still a pretty valid asset to us and to our shareholders. So you can rely on us to stick pretty close to the poutine and maple syrup, as we have in the past. And we’ll take our international business to the next level. But as you know, a lot of the people in the team have quite a bit of an international experience. So we want to leverage that a bit now that we feel that we’ve set the stage for our Canadian business. And we’ll moderate ourselves on the international side, but we do want to be opportunistic and provide capital to good projects in a competitive environment on the international side. So it is part of the Orion deal that set the stage for that, but it’s not that far out of our natural habitat.

Okay. Maybe one more question. If I move to Murdock Avenue, Falco, I guess, it’s not Osisko Gold Royalties, so maybe you can answer it. But I’m just wondering are they looking for a stream for the finance farm?

Yes. We would think that there’s a stream there as you look at our agreements. We actually have a right to propose a stream on that project. And we think that -- as we’ve said earlier, Mike, the accelerator companies like Falco provide us the opportunity to invest further capital on behalf of Osisko Gold Royalties’ shareholders in an environment where we’re very familiar with the assets. And we can -- we think that we can be a pretty competitive provider of capital. And obviously, this project is a new one around in Québec. It’s our backyard. It’s one -- we believe it’s one of the great Canadian mines that will be built. It has a 15-year mine life with the reserves that are identified in the current mine plan, with another 5 to 10 years of upside. So we think it is a great Canadian asset. It is in Québec, and we are looking forward to being a provider of capital on that project in the neighborhood of the kind of financing that can be done there. We could see Osisko Royalties as one of the potential providers of capital on a stream that could be worth somewhere between $100 million and $200 million. So there’s a significant opportunity that is the direct outcome of our accelerator company program.

There are no further questions at this time. I’ll turn the call back over to the presenters.

All right. Well, thank you, everybody. And please feel free to reach in. Just by way of general news, we just went through the Zürich Precious Metals Summit. I think that Osisko had quite a few shareholders here in Europe. And we’ve updated them, and we continue to develop our business. And I’m quite happy and very pleased with the evolution. 2017 has been one of the busiest years ever for the Osisko Group, and we look forward to finishing up the fourth quarter strongly and competitively as we move forward, just continue to establish ourselves as the fourth-largest precious metal streaming company in the business and also to see the strength of our accelerator group come forward, and the proof of that business model continue to deliver results. Just as a reminder, our equity positions have a value -- market value of $420 million right now. And our base cost is about $277 million. So we’ve had a pretty extraordinary outcome with our accelerator companies. And we continue to look at providing about 75% of our investments going to traditional royalty and streaming. And off take agreements of about 25% going into are somewhat unique to us, accelerator model, as we go forward. Currently, we enjoy the benefit of over 40 drills turning on our royalty-held lands, and we expect to see great drill results and forward-motion on a lot of the assets that we are involved with, with our Osisko global royalty shareholders. And I thank everybody for their support, especially in this last deal, where we raised $300 million through the convertible on that note. Thank you very much, and we will talk to you next quarter.

This concludes today’s conference call. You may now disconnect.