VANCOUVER, BC, Aug. 10,
2023 /CNW/ - Gold Royalty Corp. ("Gold
Royalty" or the "Company") (NYSE American: GROY) is
pleased to announce the filing of its operating and financial
results for the three months and six months ended June 30, 2023. The Company will be hosting an
Investor Webcast to discuss these results and update on
Friday, August 11 at 10:00 AM EDT. All amounts are expressed in U.S.
dollars unless otherwise noted.
David Garofalo, Chairman and CEO
of Gold Royalty, commented: "We have maintained our 2023 financial
guidance and are encouraged by the expected near-term organic cash
flow growth of our portfolio with assets such as Cote and Odyssey
on the cusp of entering and ramping up production. Our team has
continued to execute our growth strategy in a disciplined manner,
having recently announced the agreement to acquire the Cozamin
royalty while simultaneously achieving a 30% decrease in quarterly
cash operating expenses year over year. We expect a strong second
half of 2023 with increased production from Canadian Malartic,
initial revenues from Cozamin, and Cote nearing completion of
construction."
Highlights for the three and six months ended June 30, 2023, include:
- Adjusted Net Loss Per Share* for the second quarter of 2023 was
unchanged at $0.02 per share compared
to the comparative period as lower Total Revenue and Land Agreement
Proceeds in the second quarter 2023 were partially offset by an
over 30% decrease in Cash Operating Expenses.
- Total Revenue and Land Agreement Proceeds* in the second
quarter were lower than expected primarily due to resequencing of
production at the Barnat Pit at Canadian Malartic. Full year Total
Revenue and Land Agreement Proceeds* guidance of $5.5 million to $6.5
million is maintained as the shortfall in revenue from
Canadian Malartic is expected to be substantially recovered in the
second half of the year.
- On July 31, 2023, the Company
announced it has entered into an agreement to acquire a 1% royalty
on portions of the' producing Cozamin copper-silver mine in
Mexico operated by Capstone Copper
Corp. Completion of the transaction is subject to customary closing
conditions.
- The Company generated two new royalties through the royalty
generator model and has now created 37 royalties through the
royalty generator model since 2021.
*Adjusted Net Loss Per
Share, Total Revenue and Land Agreement Proceeds and Cash Operating
Expenses are non-IFRS measures and should not be considered in
isolation or as a substitute for analysis of the Company's results
under IFRS. See "Non-IFRS Measures" below for further
information.
|
The following table sets forth selected financial information for
the three and six months ended June 30,
2023:
|
|
For the three
months
ended
June 30
|
|
For the six months
ended
June 30
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(in thousands of
dollars, except per share amounts)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
Revenue
|
|
468
|
|
1,907
|
|
1,235
|
|
2,545
|
Net loss
|
|
(2,496)
|
|
(3,438)
|
|
(5,579)
|
|
(5,826)
|
Net loss per share,
basic and diluted
|
|
(0.02)
|
|
(0.03)
|
|
(0.04)
|
|
(0.05)
|
Dividends declared per
share
|
|
0.01
|
|
0.01
|
|
0.02
|
|
0.01
|
Cash used in operating
activities
|
|
(1,337)
|
|
(4,205)
|
|
(3,398)
|
|
(11,821)
|
Non-IFRS and Other
Measures
|
|
|
|
|
|
|
|
|
Total Revenue and Land
Agreement Proceeds*
|
|
557
|
|
2,024
|
|
2,527
|
|
3,783
|
Cash Operating
Expenses*
|
|
(1,822)
|
|
(2,618)
|
|
(4,345)
|
|
(6,383)
|
Adjusted Net
Loss*
|
|
(2,487)
|
|
(2,036)
|
|
(3,805)
|
|
(4,184)
|
Adjusted Net Loss Per
Share, basic and diluted*
|
|
(0.02)
|
|
(0.02)
|
|
(0.03)
|
|
(0.03)
|
Total gold equivalent
ounces ("GEOs")*
|
|
237
|
|
1,031
|
|
639
|
|
1,376
|
* See Non-IFRS
Measures below.
|
For further detailed information, please refer to the Company's
unaudited condensed interim consolidated financial statements and
management's discussion and analysis, for the three and six months
ended June 30, 2023, copies of which
are available under the Company's profile at www.sedar.com and
www.sec.gov.
Outlook
Management currently believes the Company is on track to meet
its previously disclosed forecast of $5.5
million and $6.5 million in
total revenues and land agreement proceeds in 2023 based on the
production guidance published to date by the operators of the
properties underlying the 'Company's interests, a forecasted gold
price ranging from $1,700 to
$2,000 per ounce and expected
payments from land agreements. The Company expects to incur
$7.0 to $8.0
million in recurring cash operating expenses in 2023
(forecasted operating expenses, excluding transaction-related and
other non-recurring expenses) which remains unchanged as well. The
Company currently expects that it will generate positive net
operating cash flow in 2024 (forecasted operating cash flow before
movement in non-cash working capital adjusted for land agreement
proceed credited against mineral properties) when select key growth
projects are expected to ramp up in production, including the
long-life cornerstone mines at Côté and Odyssey.
The foregoing projected outlook constitutes "forward-looking
information" and "forward-looking statements" within the meaning of
applicable Canadian and U.S. securities laws and is intended to
provide information about management's current expectations for the
Company's 2023 fiscal year. Although considered reasonable as of
the date hereof, such outlook and the underlying assumptions may
prove to be inaccurate. Accordingly, actual results could differ
materially from the Company's expectations as set forth
herein.
In preparing the above outlook, management assumed, among other
things, that the operators of the projects underlying the Company's
royalties will meet expected production milestones and forecasts
for the applicable period and that operators of land agreements
will elect to make all expected payments over the period. See
"Forward-Looking Statements".
Portfolio Update
- Odyssey Project (3.0% NSR over the northern portion of
the project): On June 20, 2023,
Agnico Eagle Mines Limited ("Agnico Eagle") provided
an update on the Canadian Malartic
Complex including the details of an updated internal study.
The updated internal study outlined an improved production profile
and opportunities to add production in years 2025 to 2028. Recent
positive drill results in the Odyssey internal zones indicate the
potential for further increases in production during the 2023-2028
transition period.
- Côté Gold Project (0.75% NSR royalty over the southern
portion of the project): On May 11,
2023, IAMGOLD Corporation ("IAMGOLD") disclosed that,
as of March 31, 2022, the Côté Gold
Project was estimated to be approximately 80% complete.
Additionally, on May 16, 2023,
IAMGOLD disclosed a $400 million loan
term financing deal with Oaktree Capital Management and outlined
that construction of the large-scale, long life Côté Gold Project
was on-track and on-budget to commence production in early
2024.
- Ren Project (1.5% NSR royalty and 3.5% NPI): On
May 3, 2023, Barrick Gold Corporation
("Barrick") reported their first quarter results and
mentioned significant financial investments in equipment and
development including portals at Ren that will boost productivity
and mineralization development, alongside a new paste plant at
Goldstrike. On August 8, 2023,
Barrick reported their second quarter results and outlined that
exploration had progressed at significant brownfields opportunities
at Carlin. Barrick further outlined that drilling continues to
confirm potential discoveries across the exploration pipeline in
the Nevada Complex.
- Fenelon Gold Project (2.0% NSR royalty over the majority
of the project): On June 26, 2023
Wallbridge Mining Company Limited ("Wallbridge") delivered a
positive Preliminary Economic Assessment ("PEA") for the
Fenelon Gold Project. The PEA outlined a 12.3 year mine life with
average annual gold production of 212,000 ounces. For further
information regarding the PEA, please refer to Wallbridge's news
release dated June 26, 2023.
- Granite Creek Mine Project (10.0% NPI): On July 11, 2023, i-80 Gold Corp ("i-80")
provided a comprehensive update on its operations including
development and exploration activities at Granite Creek. i-80's
disclosed that its focus has shifted to the Ogee Zone at Granite
Creek with positive grade reconciliation, increased mining rates
and increasing production. i-80 is also accelerating infrastructure
development to access the high-grade South Pacific Zone as Granite
Creek progresses towards full commercial production.
- Whistler Gold-Copper Project (1.0% NSR): On May 30, 2023, U.S. GoldMining Inc. ("US
GoldMining") announced that following the successful completion
of its initial public offering in April
2023 which raised gross proceeds of US$20 million, US GoldMining has approved its
2023 exploration program and budget for the Whistler gold-copper
project. It further disclosed that Phase 1 of its inaugural
exploration program has commenced with field crews undertaking
rehabilitation work on the existing camp which will enable the
commencement of core drilling, mine engineering and environmental
baseline studies later in the 2023 summer field season.
Royalty Generation Model Update
The Company's Royalty Generator Model had a productive quarter
with two new royalties during the quarter. The Company has now
generated 37 royalties since the acquisition of Ely Gold Royalties
in 2021 through this model. Details of the new royalties generated
during the quarter are as follows:
- The Quarter Horse property was sold to First Majestic with Gold
Royalty retaining a 0.75% NSR royalty over the property.
- The Goldfield West property was sold to Centerra Gold Inc with
Gold Royalty retaining a 2.0% NSR royalty over the property.
The Company currently has 31 properties for land agreements and
7 properties under lease and expects to generate $3.2 million in land agreement proceeds in 2023
assuming all land option agreements are exercised. The model
continues to be a low-cost portion of the business with only
$81,000 spent on mineral interests
maintenance expense during the first half of 2023.
Investor Webcast
An investor webcast will be held on Friday, August 11, 2023 starting at 10:00 am ET (7:00 am
PT) to discuss these results. Management will be providing
an update to interested stakeholders on the Company's quarterly
results including key recent catalysts that have been announced on
the assets underlying the Company's royalties. The presentation
will be followed by a question-and-answer session where
participants will be able to ask any questions they may have of
management.
To register for the investor webcast, please click the link
below:
https://www.bigmarker.com/vid-conferences/GoldRoyaltyCorp-TownHallForum-Q2Results
A replay of the webcast will be available on the Gold Royalty
website following the presentation.
About Gold Royalty Corp.
Gold Royalty Corp. is a gold-focused royalty company offering
creative financing solutions to the metals and mining industry. Its
mission is to invest in high-quality, sustainable, and responsible
mining operations to build a diversified portfolio of precious
metals royalty and streaming interests that generate superior
long-term returns for our shareholders. Gold Royalty's diversified
portfolio currently consists primarily of net smelter return
royalties on gold properties located in the Americas.
Qualified Person
Alastair Still, P.Geo., Director
of Technical Services of the Company, is a "qualified person" as
such term is defined under Canadian National Instrument 43-101
("NI 43-101") and has reviewed and approved the technical
information disclosed in this news release.
Notice to Investors
For further information regarding the project updates regarding
properties underlying the Company's interests, please refer to the
disclosures of the operators thereof, including the news releases
and reports referenced herein. Disclosure relating to properties in
which Gold Royalty holds royalty or other interests is based on
information publicly disclosed by the owners or operators of such
properties. The Company generally has limited or no access to the
properties underlying its interests and is largely dependent on the
disclosure of the operators of its interests and other publicly
available information. The Company generally has limited or no
ability to verify such information. Although the Company does not
have any knowledge that such information may not be accurate, there
can be no assurance that such third-party information is complete
or accurate.
Unless otherwise indicated, the technical and scientific
disclosure contained or referenced in this news release, including
any references to mineral resources or mineral reserves, was
prepared by the project operators in accordance with NI 43-101,
which differs significantly from the requirements of the U.S.
Securities and Exchange Commission applicable to domestic issuers.
Accordingly, the scientific and technical information contained or
referenced in this news release may not be comparable to similar
information made public by U.S. companies subject to the reporting
and disclosure requirements of the SEC.
Forward-Looking Statements:
Certain of the information contained in this news release
constitutes "forward-looking information" and "forward-looking
statements" within the meaning of applicable Canadian and U.S.
securities laws (collectively, "forward-looking statements"),
including but not limited to statements regarding: estimated
future Total Revenues and Land Agreement Proceeds and expected
future cash flows; the proposed acquisition on a royalty on
portions of the Cozamin mine; expectations regarding the
development of the projects underlying the Company's royalty
interests, including the estimates of the operators thereof their
timing and ability to achieve production; and expectations
regarding the Company's growth and statements regarding the
Company's plans and strategies. Such statements can be generally
identified by the use of terms such as "may", "will", "expect",
"intend", "believe", "plans", "anticipate" or similar terms.
Forward-looking statements are based upon certain assumptions and
other important factors, including assumptions of management
regarding the accuracy of the disclosure of the operators of the
projects underlying the Company's projects, their ability to
achieve disclosed plans and targets, macroeconomic conditions,
commodity prices, the ability of the parties to the Cozamin
transaction to satisfy the conditions to completion of such
transaction and the Company's ability to finance future growth and
acquisitions. Forward-looking statements are subject to a number of
risks, uncertainties and other factors which may cause the actual
results to be materially different from those expressed or implied
by such forward-looking statements including, among others, any
inability to any inability of the operators of the properties
underlying the Company's royalty interests to execute proposed
plans for such properties or to achieved planned development and
production estimates and goals, risks related to the operators of
the projects in which the Company holds interests, including the
successful continuation of operations at such projects by those
operators, risks related to exploration, development, permitting,
infrastructure, operating or technical difficulties on any such
projects, any inability to satisfy the conditions to the completion
of the proposed Cozamin transaction, the influence of macroeconomic
developments, the ability of the Company to carry out its
growth plans and other factors set forth in the Company's Annual
Report on Form 20-F for the year ended September 30, 2022 and its other publicly filed
documents under its profiles at www.sedar.com and www.sec.gov.
Although the Company has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. The Company does not undertake to update any
forward-looking statements, except in accordance with applicable
securities laws.
Non-IFRS Measures
The Company has included, in this document, certain performance
measures, including: (i) Adjusted Net Loss and Adjusted Net Loss
Per Share; (ii) GEOs; (iii) Total Revenue and Land Agreement
Proceeds; and (iv) Cash Operating Expenses which are each non-IFRS
measures. The presentation of such non-IFRS measures is intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS. These non-IFRS measures do not have any
standardized meaning prescribed by IFRS, and other companies may
calculate these measures differently.
- Adjusted Net Loss and Adjusted Net Loss Per Share
Adjusted Net Loss is calculated by adding land
agreement proceeds credited against mineral properties and
deducting the following from net income: Transaction related and
non-recurring general administrative expenses1, share of
(gain)/loss and dilution gain in associate, impairment, changes in
fair value of derivative liabilities and short-term investments,
gain on disposition of short-term investments, gain on loan
modification, foreign exchange gain/(loss), other income/(expense)
and land agreement proceeds credited against mineral properties.
Adjusted Net Loss Per Share, basic and diluted have been determined
by dividing the Adjusted Net Loss by the weighted average number of
common shares for the applicable period. The Company included this
information as management believes that they are useful measures of
performance as they adjust for items which are not always
reflective of the underlying operating performance of our business
and/or are not necessarily indicative of future operating results.
The table below provides a reconciliation of net loss to Adjusted
Net Loss and Adjusted Net Loss Per Share, basic and diluted for the
periods indicated:
|
|
For the three
months
ended
June 30
|
|
For the six months
ended
June 30
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(in thousands of
dollars, except per share amounts)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
Net loss
|
|
(2,496)
|
|
(3,438)
|
|
(5,579)
|
|
(5,826)
|
Land agreement proceeds
credited against mineral properties
|
|
89
|
|
117
|
|
1,292
|
|
1,238
|
Transaction related and
non-recurring administrative expenses
|
|
176
|
|
575
|
|
635
|
|
1,535
|
Share of (income)/loss
in associate
|
|
(350)
|
|
47
|
|
(222)
|
|
155
|
Dilution income in
associate
|
|
(12)
|
|
(20)
|
|
(12)
|
|
(100)
|
Impairment of
royalty
|
|
—
|
|
—
|
|
—
|
|
3,821
|
Change in fair value of
derivative liabilities
|
|
(9)
|
|
(2,836)
|
|
(239)
|
|
(4,634)
|
Change in fair value of
short-term investments
|
|
135
|
|
3,627
|
|
77
|
|
(248)
|
Loss on Loan
modification
|
|
—
|
|
—
|
|
249
|
|
—
|
Foreign exchange
(gain)/loss
|
|
59
|
|
3
|
|
107
|
|
(10)
|
Other income
|
|
(79)
|
|
(111)
|
|
(113)
|
|
(115)
|
Adjusted Net
Loss
|
|
(2,487)
|
|
(2,036)
|
|
(3,805)
|
|
(4,184)
|
Weighted average number
of common shares
|
|
144,560,621
|
|
134,372,502
|
|
144,425,846
|
|
134,196,906
|
Adjusted Net Loss
Per Share, basic and diluted
|
|
(0.02)
|
|
(0.02)
|
|
(0.03)
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Transaction related and non-recurring general administrative
expenses are a supplementary financial measure comprised of
operating expenses that are not expected to be incurred on an
ongoing basis. During the three and six months ended June 30, 2023,
transaction related and non-recurring administrative expenses
related primarily to professional fees related to changing the
Company's fiscal year-end, tax restructuring following the
completion of corporate transactions, establishing a dividend
reinvestment and finance programs and select corporate development
activities and in the same periods of 2022, related primarily to
consulting fees and professional fees associated with corporate
transactions.
|
Total GEOs are determined by dividing revenue by
the following average gold prices:
|
|
Units
|
|
Average
Gold Price
|
Three months ended June
30, 2022
|
|
(US$/oz)
|
|
1,850
|
Three months ended June
30, 2023
|
|
(US$/oz)
|
|
1,978
|
Six months ended June
30, 2022
|
|
(US$/oz)
|
|
1,850
|
Six months ended June
30, 2023
|
|
(US$/oz)
|
|
1,933
|
- Total Revenue and Land Agreement Proceeds
reconciliation
Total Revenue and Land Agreement Proceeds are
determined by adding land agreement proceeds credited against
mineral properties to total revenue. The Company has included this
information as management believes certain investors use this
information to evaluate the Company's performance in comparison to
other gold royalty companies in the precious metal mining industry.
Below is a reconciliation of our Total Revenue and Land Agreement
Proceeds to total revenue for the three and six months ended
June 30, 2023 and 2022, respectively:
|
|
For the three
months
ended
June 30
|
|
For the six months
ended
June 30
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(in thousands of
dollars)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
Royalty
|
|
399
|
|
1,727
|
|
633
|
|
1,986
|
Advance minimum
royalty
|
|
25
|
|
25
|
|
356
|
|
313
|
Land agreement
proceeds
|
|
133
|
|
272
|
|
1,538
|
|
1,484
|
Total Revenue and Land
Agreement Proceeds
|
|
557
|
|
2,024
|
|
2,527
|
|
3,783
|
Land agreement proceeds
credited against mineral properties
|
|
(89)
|
|
(117)
|
|
(1,292)
|
|
(1,238)
|
Revenue
|
|
468
|
|
1,907
|
|
1,235
|
|
2,545
|
Cash Operating Expenses is determined by
excluding the impact of non-cash expenses, revenue, other income
and tax recovery. The Company has included this information as
management believes certain investors use this information to
evaluate our performance in comparison to other gold royalty
companies in the precious metal mining industry. The table below
provides a reconciliation of net loss to Cash Operating
Expenses.
|
|
For the three
months
ended
June 30
|
|
For the six months
ended
June 30
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(in thousands of
dollars)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
Net loss
|
|
(2,496)
|
|
(3,438)
|
|
(5,579)
|
|
(5,826)
|
Non-cash expenses,
revenue, other income and tax recovery:
|
|
|
|
|
|
|
|
|
Revenue
|
|
(468)
|
|
(1,907)
|
|
(1,235)
|
|
(2,545)
|
Other income
|
|
(79)
|
|
(111)
|
|
(113)
|
|
(115)
|
Depletion
|
|
204
|
|
1,037
|
|
321
|
|
1,525
|
Depreciation
|
|
16
|
|
21
|
|
37
|
|
36
|
Share-based
compensation
|
|
828
|
|
705
|
|
1,708
|
|
1,851
|
Share of (income)/loss
in associate
|
|
(350)
|
|
47
|
|
(222)
|
|
155
|
Dilution income in
associate
|
|
(12)
|
|
(20)
|
|
(12)
|
|
(100)
|
Impairment of
royalty
|
|
—
|
|
—
|
|
—
|
|
3,821
|
Change in fair value of
derivative liabilities
|
|
(9)
|
|
(2,836)
|
|
(239)
|
|
(4,634)
|
Change in fair value of
short-term investments
|
|
135
|
|
3,627
|
|
77
|
|
(248)
|
Loss on Loan
modification
|
|
—
|
|
—
|
|
249
|
|
—
|
Foreign exchange
(gain)/loss
|
|
59
|
|
3
|
|
107
|
|
(10)
|
Interest
expense
|
|
328
|
|
269
|
|
622
|
|
374
|
Tax
recovery/(expense)
|
|
22
|
|
(15)
|
|
(66)
|
|
(667)
|
Cash Operating
Expenses
|
|
(1,822)
|
|
(2,618)
|
|
(4,345)
|
|
(6,383)
|
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SOURCE Gold Royalty Corp.