Our peer-leading long-term growth outlook and fundamentals continue to improve, driven primarily by Agnico Eagle’s long-life large-scale Odyssey Mine, where underground development is ahead of expectations, Nevada Gold Mine’s REN deposit which continues to be advanced towards production later this decade, and at Aura’s Borborema gold project where production is expected by early next year.”
First Quarter 2024 Results Summary:
The following table sets forth selected financial information for the three months ended March 31, 2024 :
For the three months ended
March 31
2024
2023
(in thousands of dollars, except per share amounts)
($)
($)
Revenue
2,894
767
General, administrative and project evaluation costs
(2,875)
(3,424)
Net loss
(1,405)
(3,083)
Net loss per share, basic and diluted
(0.01)
(0.02)
Cash provided by (used in) operating activities
336
(2,061)
Non-IFRS and Other Measures
Total Revenue, Land Agreement Proceeds and Interest (1)
4,185
1,970
Cash Operating Expenses (1)
(2,260)
(2,523)
Adjusted Net Loss (1)
(930)
(1,318)
Adjusted Net Loss Per Share, basic and diluted (1)
(0.01)
(0.01)
Total Gold Equivalent Ounces (” GEOs “) (1)
2,019
1,043
(1)
Total Revenue, Land Agreement Proceeds and Interest, Cash Operating Expenses, Adjusted Net Loss, Adjusted Net Loss Per Share, basic and diluted and Total GEOs are each non-IFRS measures and do not have a standardized meaning under IFRS. See “Non-IFRS Measures” for further information.
First Quarter 2024 Highlights:
Portfolio Update
Odyssey Mine (3.0% NSR over the northern portion of the mine): Agnico Eagle Mines Limited (” Agnico Eagle “) owns and operates the Canadian Malartic Complex that is one of the world’s largest gold mining operations and is comprised of the open-pit Canadian Malartic mine and the underground Odyssey mine. The Canadian Malartic complex will progressively transition from open pit to underground mining between 2023 and 2028.
On April 25, 2024 , Agnico Eagle announced its first quarter 2024 results, including an update that construction at the Odyssey mine is progressing well. Ramp development continued to exceed Agnico Eagle’s target and shaft sinking improved during the quarter. The shaft is expected to provide hoisting capacity by mid-2025, six months earlier than previously planned and will provide added development and production flexibility. As at March 31, 2024 the shaft has reached a depth of approximately 452 meters and Agnico Eagle expects to complete excavation of the shaft in 2027.
Agnico Eagle further outlined a summary of its first quarter operating results at the Odyssey mine. At the Barnat pit, good equipment availability and productivity, drove solid operational performance despite challenging weather conditions. At Odyssey South, the mining rate and production were slightly below plan at approximately 3,300 tpd and 17,700 ounces of gold, respectively. The underground operations are expected to gain additional flexibility in the second quarter of 2024, with the start of a second mining front and the addition of four 65 tonnes haulage trucks. Stope reconciliation at Odyssey South remains positive, primarily from the contribution of the internal zones, which resulted in approximately 16% more gold ounces produced than anticipated.
Côté Gold Mine (0.75% NSR royalty over the southern portion of the mine): On March 31, 2024 , IAMGOLD Corporation (” IAMGOLD “) announced the first gold pour at the Côté Gold Mine. It stated that its next step is to focus on ramp-up towards commercial production in the third quarter of 2024, with the goal of achieving a 90% throughput rate at year end. IAMGOLD maintained its production guidance for the project for the year at 220,000 to 290,000 ounces of gold (100% basis), assuming the remaining milestones are achieved.
Ren Project (1.5% NSR royalty and 3.5% NPI): In its management’s discussion and analysis for the year ended December 31, 2023 , Barrick Gold Corporation (” Barrick “) highlighted continued exploration success at the Ren deposit. The step-out surface drilling program intercepted the targeted Corona dike at a depth of approximately 900 meters downhole and returned 4.7 meters at 24.90 g/t Au, which it stated confirmed the continuity of high-grade mineralization and paving the way for underground platform development in the future to convert more material to the west.
In its management’s discussion and analysis for the three months ended March 31, 2024 , Barrick included an update on growth and exploration projects. At Carlin, underground conversion drilling commenced across all sites in the first quarter, with step-out growth drilling expected to commence early in the second quarter at a few key project areas.
Granite Creek Mine Project (10.0% NPI): On February 7, 2024 , i-80 Gold Corp (” i-80 “) provided a summary of 2023 activities and 2024 exploration and development plans, including ongoing initiatives at the Granite Creek Mine Project. The South Pacific Zone (” SPZ “) is a priority area of development for i-80 and, and they have announced plans to advance a development plan that will include extending a decline in order to provide access to the SPZ allowing it to become part of Granite Creek mine plan in H1-2024. Ewan Downie , CEO of i-80 stated, “The results from our 2023 definition programs demonstrate the potential for the SPZ to be a significant deposit located on strike from one of North America’s largest gold mining operations. Mineralization remains open at depth and along strike to the north with the average intercept grade in the northern extension definition program of approximately 15 g/t gold with true widths ranging up to 15 metres.”
i-80 also announced on May 7, 2024 that the work being conducted in 2024 at Granite Creek is expected to include definition and expansion drilling, underground development and test mining of the South Pacific Zone, and a Feasibility Study.
Cozamin Mine (1.0% NSR over a portion of the mine): On January 24, 2024 , Capstone Copper Corp. (” Capstone “) reported 2023 production and 2024 guidance. Production from Cozamin in 2024 is anticipated by Capstone to be similar to 2023 at 22,000 to 24,000 tonnes of copper on a 100% basis. Operating costs in 2024 are forecasted by Capstone to be higher than those in 2023 driven by a higher proportion of cut-and-fill mining methods compared to longhole stoping, along with a stronger Mexican peso.
On May 2, 2024 , Capstone announced its first quarter 2024 results which outlined that first quarter 2024 production was 15% higher than the first quarter 2023 due to higher grades consistent with the mine plan.
Royalty Generator Model Update
Our Royalty Generator Model continues to generate positive results with one new royalty added in the three months ended March 31, 2024 . We have generated 40 royalties since the acquisition of Ely Gold Royalties Inc. in 2021 through this model.
We currently have 31 properties subject to land agreements and 6 properties under lease generating land agreement proceeds. The model continues to incur low operating costs with only $0.002 million spent on maintaining the mineral interests in the first quarter of 2024.
2024 Outlook
The Company remains on track to meet its previously disclosed forecast of between approximately 5,000 and 5,600 GEOs in 2024 which equates to approximately $10.0 million to $11.2 million in Total Revenue, Land Agreement Proceeds and Interest at a gold price of $2,000 per ounce. This would represent a midpoint increase in GEOs of approximately 100% relative to 2023.
The Company’s recurring Cash Operating Expenses are currently expected to be consistent with 2023 and the Company expects to achieve positive operating cash flow in 2024 when a number of its growth projects ramp up in production, including the long-life cornerstone mines at Côté and Odyssey and a full year of cash inflows from the recently acquired Cozamin and Borborema royalties.
The 2024 outlook regarding total GEOs is based on public forecasts, expected development timelines and other disclosure by the owners and operators of the properties underlying our interests and our assessment thereof .
Investor Webcast
An investor webcast will be held on Tuesday, May 14, 2024 starting at 11:00 am ET ( 8:00 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.
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
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 Canadian National Instrument 43-101, which differs significantly from the requirements of the U.S. Securities and Exchange Commission (” SEC “) 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:
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) total GEOs; (iii) Total Revenue, Land Agreement Proceeds and Interest; 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 back land agreement proceeds credited against mineral properties, loan interest earned on the gold-linked loan, convertible debentures-accretion, transaction related and non-recurring general administrative expenses* and share of loss and deducting the following from net loss: dilution income in associate, changes in fair value of derivative liabilities, embedded derivatives, short-term investments and gold-linked loan, gain on loan modification, foreign exchange gain (loss) and other income (expense). 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. 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 following is a reconciliation of net loss to Adjusted Net Loss, Per Share, basic and diluted for the periods indicated:
For the three months ended
March 31
2024
2023
(in thousands of dollars, except per share amounts)
($)
($)
Net loss
(1,405)
(3,083)
Land agreement proceeds credited against mineral properties
1,050
1,203
Loan interest
241
—
Convertible debentures – accretion
395
—
Transaction related and non-recurring expenses
95
459
Share of loss in associate
52
128
Dilution gain in associate
(9)
—
Change in fair value of derivative liabilities
—
(230)
Change in fair value of gold-linked loan
(639)
—
Change in fair value of short-term investments
(101)
(58)
Change in fair value of embedded derivatives
(191)
—
Foreign exchange (gain) loss
(87)
48
Loan modification (gain) loss
(310)
249
Other income
(21)
(34)
Adjusted Net Loss
(930)
(1,318)
Weighted average number of common shares
145,778,698
144,289,573
Adjusted Net Loss per Share, basic and diluted
(0.01)
(0.01)
* Transaction related, and non-recurring general administrative expenses comprised of operating expenses that are not expected to be incurred on an ongoing basis. During the quarter ended March 31, 2024, transaction related and non-recurring professional fees related to select project evaluation costs and post- closing activities relating the issuance of the Company’s outstanding convertible debentures.
Total GEOs
Total GEOs are determined by dividing Total Revenue, Land Agreement Proceeds and Interest by the average gold prices for the applicable period:
(in thousands of dollars, except Average Gold Price/oz and GEOs)
Average
Gold Price/oz
Total Revenue, Land Agreement
Proceeds and Interest
GEOs
For three months ended March 31, 2023
1,889
1,970
1,043
For three months ended March 31, 2024
2,072
4,185
2,019
Total Revenue, Land Agreement Proceeds and Interest
For the three months ended
March 31
2024
2023
(in thousands of dollars)
($)
($)
Royalty
1,062
234
Advance minimum royalty and pre-production royalty
830
331
Land agreement proceeds
2,052
1,405
Loan interest
241
—
Total Revenue, Land Agreement Proceeds and Interest
4,185
1,970
Land agreement proceeds credited against mineral properties
(1,050)
(1,203)
Loan interest
(241)
—
Revenue
2,894
767
Cash Operating Expenses
For the three months ended
March 31
2024
2023
(in thousands of dollars)
($)
($)
General and administrative costs
(2,856)
(3,251)
Project evaluation costs
(19)
(173)
General, administrative and project evaluation costs
(2,875)
(3,424)
Depreciation
20
21
Share-based compensation
595
880
Cash Operating Expenses
(2,260)
(2,523)
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