GOLD ROYALTY REPORTS 2023 FINANCIAL AND OPERATING RESULTS AND FORECASTS APPROXIMATE 100% GROWTH IN REVENUE IN 2024 DRIVEN BY CORNERSTONE ROYALTIES ENTERING PRODUCTION
- Revenue increased to $3.0 million in 2023.
- Net loss amounted to $26.8 million in 2023.
- Operating cash flow is expected to be positive in 2024.
- Forecasted 100% growth in gold equivalent ounces for 2024.
- Several acquisitions in 2023 to boost revenue.
- Core assets like Côté and Odyssey progressing well.
- Recurring cash operating expenses expected to remain stable in 2024.
- Net loss per share was $0.13 in Q4 2023.
- Non-cash impairment charge taken on select non-core assets.
- Adjusted net earnings for 2023 includes deferred tax recovery.
- Continued deferral of production at Canadian Malartic into 2024.
- Cash operating expenses were 36% lower than the prior year.
Insights
The recent financial and operating results from Gold Royalty Corp. reflect a mixed performance, with notable revenue growth from $582k to $1.016 million quarter-over-quarter but a significant net loss increase from $2.204 million to $19.36 million year-over-year. The net loss per share has also widened, suggesting that the company's profitability has not kept pace with its expansion. However, an important aspect to consider is the non-cash impairment charge on select non-core assets, which can be a strategic move to optimize the company's portfolio and may not reflect operational inefficiencies.
Gold Royalty's aggressive growth in the number of royalties from 18 to 240 and the organic growth from projects entering production, could signal a strong future revenue stream, especially with gold prices at all-time highs. However, the company's ability to manage its cash operating expenses, which have decreased by 36%, will be important in achieving positive operating cash flow as forecasted for 2024. The expected 100% growth in gold equivalent ounces (GEOs) is an ambitious target that, if met, could significantly enhance the company's financial health, but this projection should be treated with caution until further operational evidence supports it.
Gold Royalty Corp.'s rapid expansion in the number of royalties and its strategic acquisitions align with industry trends where companies seek to diversify their portfolios and leverage rising commodity prices. The streaming and royalty sector has become increasingly popular as a lower-risk investment compared to direct mining operations. The company's focus on projects like Côté and Odyssey, which are expected to commence and ramp up production, respectively, could position it well within the sector, given the long-life expectancy of these mines.
Furthermore, the company's revenue growth trajectory is particularly noteworthy in the context of the royalty and streaming sector, which often enjoys higher margins than traditional mining operations. The emphasis on growth projects and the transition of the Canadian Malartic complex from open pit to underground mining are indicative of a strategic long-term vision that could appeal to investors looking for stability and growth potential in the gold market.
Gold Royalty Corp.'s portfolio update, including the progress of the Odyssey and Côté projects, suggests that the company is on track with its development plans. The transition of the Canadian Malartic complex to underground mining is a significant development, as it is one of the world's largest gold mining operations. This could lead to sustained revenue generation for Gold Royalty, given the complex's size and production capacity.
The construction progress at the Borborema project and the expected commencement of production in early 2025 also highlight the company's forward-looking approach to revenue generation. However, the decrease in the NSR royalty after a certain production threshold at Borborema could impact long-term revenue. The Ren Project exploration success and the potential for future underground development could add further value to Gold Royalty's portfolio, although the longer timelines for pre-feasibility studies should be noted by stakeholders for their impact on near-term revenue.
David Garofalo, Chairman and CEO of Gold Royalty, commented: "In just three years, we have grown rapidly from 18 development stage royalties to 240 royalties, including 5 producing projects. We feel our portfolio is poised to deliver one of the strongest revenue growth trajectories in the royalty and streaming sector. We executed several important acquisitions in 2023, including the Borborema and Cozamin royalties, which supplement our organic revenue growth from key assets entering and ramping up production, such as Côté and Odyssey. 2024 is expected to be a pivotal year, with approximately
The following table sets forth selected financial information for the three and full year ended December 31, 2023:
For three months | For the year ended | |||||||
December | December | December | December | |||||
(in thousands of dollars, except per share and GEO amounts) | ($) | ($) | ($) | ($) | ||||
Revenue | 1,016 | 582 | 3,048 | 3,993 | ||||
Net loss | (19,360) | (2,204) | (26,756) | (12,709) | ||||
Net loss per share, basic and diluted | (0.13) | (0.02) | (0.18) | (0.10) | ||||
Operating cash flows before movements in working capital | (995) | (2,315) | (5,049) | (9,604) | ||||
Non-IFRS and Other Measures | ||||||||
Total Revenue, Land Agreement Proceeds and Interest* | 1,319 | 1,131 | 5,216 | 5,837 | ||||
Cash Operating Expenses* | (2,017) | (2,940) | (8,004) | (12,580) | ||||
Adjusted Net Earnings/(Loss)*(1) | 935 | (2,824) | (3,965) | (11,254) | ||||
Adjusted Net Earnings/(Loss) Per Share, basic and diluted* | 0.01 | (0.02) | (0.03) | (0.08) | ||||
Total Gold Equivalent Ounces ("GEOs") | 667 | 653 | 2,703 | 3,204 | ||||
(1) Adjusted Net Earnings for the year and quarter ended December 31, 2023, includes |
* See Non-IFRS Measures below.
For further detailed information, please refer to the Company's consolidated financial statements and Annual Report on Form 20-F for the year ended December 31, 2023, copies of which are available under the Company's profile at www.sedarplus.ca and www.sec.gov.
*Adjusted Net Earnings/(Loss) Per Share, Total Revenue, Land Agreement Proceeds and Interest, GEOs, 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. |
2023 Highlights and 2024 Outlook:
- The Company currently forecasts between approximately 5,000 and 5,600 GEOs* in 2024, based upon the current disclosed plans of the underlying operators, which equates to approximately
$10.0 million $11.2 million $2,000 100% compared to 2023. Cash Operating Expenses are expected to remain essentially unchanged in 2024. Taken together, this would lead to positive operating cash flow in 2024. - Revenue was
$3.0 million $5.2 million $8.0 million 36% lower than the prior year and within the guidance range on a total and recurring basis. - Net loss per share for the fourth quarter ended December 31, 2023 was
$0.13 $0.01 $0.02 - All of the Company's core assets have demonstrated considerable progress in 2023 contributing to what we believe is industry-leading revenue growth through the end of this decade. Côté is expected to commence production imminently; Odyssey continues to ramp up and we will benefit from a full year of revenue in 2024 from our most recent acquisitions, Borborema and Cozamin.
The Company currently forecasts between approximately 5,000 and 5,600 GEOs in 2024 which equates to approximately
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. Cash Operating Expenses is a non-IFRS financial measure. See "Non-IFRS Measures".
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.
Odyssey Project (
On February 15, 2024, Agnico Eagle announced its full year 2023 results as well as providing an update on 2023 exploration results and 2024 exploration plans. Exploration drilling at the Odyssey mine in 2023 amounted to a total of 131,565 meters which exceeded the budget of 101,500 meters due to a supplemental 25,000 meters of additional drilling. Agnico Eagle reported conversion of mineral resources into inaugural reserves at Odyssey and have stated that with additional exploration they believe mineralization will continue to be added into the existing 20-year mine life with good potential to grow yearly gold production and extend mine life. Specifically, Agnico Eagle stated that continued positive results from the Odyssey internal zones show the potential to add mineral resources with further drilling at shallow depth near existing underground mine infrastructure.
For further information see Agnico Eagle's news release dated February 15, 2024, available under its profile on www.sedarplus.ca
Côté Gold Project (
For further information see IAMGOLD's news release dated February 15, 2024, available under its profile on www.sedarplus.ca.
Borborema Gold Project (
The Borborema royalty decreases to a
For further information see Aura's news release dated February 20, 2024, available under its profile on www.sedarplus.ca.
Ren Project (
For further information see Barrick's news releases dated September 12, 2023, and management's discussion and analysis for the year ended December 31, 2023, available under its profile on www.sedarplus.ca.
Granite Creek Mine Project (
For further information see i80's news release dated February 7, 2024, available under its profile on www.sedarplus.ca.
Cozamin Mine (
For further information see Capstone's news release dated January 24, 2024, available under its profile on www.sedarplus.ca.
Our Royalty Generator Model continues to generate positive results with six new royalties added in the year ended December 31, 2023. We have generated 39 royalties since the acquisition of Ely Gold Royalties Inc. in 2021 through this model.
We currently have 29 properties subject to land agreements and 7 properties under lease generating land agreement proceeds. The model continues to incur low operating costs with only
An investor webcast will be held on Thursday, March 28, 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 2023 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 use the following link: https://www.bigmarker.com/vid-conferences/Gold-Royalty-Corp-Town-Hall-Forum-Q4
A replay of the webcast will be available on the Gold Royalty website following the presentation.
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
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.
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 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 Canadian National Instrument 43-101, which differs significantly from the requirements of the
Certain of the information contained in this news release constitutes "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and
We have included, in this document, certain performance measures, including: (i) Adjusted Net Earnings/(Loss) and Adjusted Net Earnings/(Loss) Per Share; (ii) 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 Earnings/(Loss) and Adjusted Net Earnings/(Loss) Per Share
Adjusted Net Earnings/(Loss) is calculated by adding land agreement proceeds credited against mineral properties, adding the pre-acquisition royalty revenue received as credited against the Cozamin purchase price and deducting the following from net income: transaction related and non-recurring general administrative expenses(2), share of (income)/loss and dilution income in associate, impairment, changes in fair value of derivative liabilities, short-term investments and gold-linked loan, loss on loan modification, foreign exchange gain/(loss), other income/(expense) and land agreement proceeds credited against mineral properties. Adjusted Net Earnings/(Loss) includes recognized deferred tax recovery. Adjusted Net Earnings/(Loss) Per Share, basic and diluted have been determined by dividing the Adjusted Net Earnings/(Loss) by the weighted average number of common shares for the applicable period. We 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 Earnings/(Loss) and Adjusted Net Earnings/(Loss) Per Share, basic and diluted for the periods indicated:
(2) 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 year ended December 31, 2023, transaction related and non-recurring administrative expenses related primarily to professional fees related to changing our 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. |
For three months ended | For the year ended | |||||||
December | December | December | December | |||||
(in thousands of dollars, except per share amounts) | ($) | ($) | ($) | ($) | ||||
Net loss | (19,360) | (2,204) | (26,756) | (12,709) | ||||
Land Agreement Proceeds credited against mineral properties | 270 | 549 | 1,909 | 1,844 | ||||
Pre-acquisition royalty revenue credited against Cozamin purchase price | — | — | 226 | — | ||||
Loan interest | 33 | — | 33 | — | ||||
Transaction related and non-recurring administrative expenses | 268 | 115 | 967 | 1,650 | ||||
Share of (gain)/loss in associate | 72 | (1) | (172) | 152 | ||||
Dilution gain in associate | — | — | (12) | (100) | ||||
Impairment of royalties, net of taxes | 19,760 | — | 19,760 | 3,018 | ||||
Change in fair value of derivative liabilities | — | (278) | (242) | (4,776) | ||||
Change in fair value of gold-linked loan | (172) | — | (172) | — | ||||
Change in fair value of short-term investments | 45 | (1,060) | 264 | 51 | ||||
Change in fair value of embedded derivatives | (30) | — | (30) | — | ||||
Gain on loan modification | — | — | 249 | (316) | ||||
Foreign exchange (gain)/loss | 55 | 42 | 132 | 11 | ||||
Other income | (6) | 13 | (121) | (79) | ||||
Adjusted Net Earnings/(Loss) | 935 | (2,824) | (3,965) | (11,254) | ||||
Weighted average number of common shares | 145,086,763 | 143,913,069 | 144,729,662 | 136,803,625 | ||||
Adjusted Net Earnings/(Loss) Per Share, basic and diluted | 0.01 | (0.02) | (0.03) | (0.08) | ||||
- 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 | Total | GEOs | |||
For three months ended March 31, 2022 | 1,877 | 1,759 | 937 | |||
For three months ended June 30, 2022 | 1,874 | 2,024 | 1,080 | |||
For three months ended September 30, 2022 | 1,729 | 923 | 534 | |||
For three months ended December 31, 2022 | 1,731 | 1,131 | 653 | |||
For year ended December 31, 2022 | 1,822 | 5,837 | 3,204 | |||
For three months ended March 31, 2023 | 1,889 | 1,970 | 1,043 | |||
For three months ended June 30, 2023 | 1,978 | 557 | 282 | |||
For three months ended September 30, 2023 | 1,927 | 1,370 | 711 | |||
For three months ended December 31, 2023 | 1,977 | 1,318 | 667 | |||
For year ended December 31, 2023 | 1,929 | 5,215 | 2,703 |
- Total Revenue, Land Agreement Proceeds and Interest
Total Revenue, Land Agreement Proceeds and Interest are determined by adding land agreement proceeds credited against mineral properties, the pre-acquisition royalty revenue credited against Cozamin purchase price to total revenue and the gold-linked loan interest. We have 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. Below is a reconciliation of our Total Revenue, Land Agreement Proceeds and Interest to total revenue for the three and year ended December 31, 2023 and 2022, respectively:
For three months ended | For the year ended | |||||||
December | December | December | December | |||||
(in thousands of dollars) | ($) | ($) | ($) | ($) | ||||
Royalty | 758 | 435 | 1,964 | 3,037 | ||||
Pre-acquisition royalty revenue credited against Cozamin purchase price | — | — | 226 | — | ||||
Advance minimum royalty and pre-production royalty | 137 | 48 | 646 | 492 | ||||
Land agreement proceeds | 391 | 648 | 2,347 | 2,308 | ||||
Loan interest | 33 | — | 33 | — | ||||
Total revenue and land agreement proceeds | 1,319 | 1,131 | 5,216 | 5,837 | ||||
Land agreement proceeds credited against mineral properties | (270) | (549) | (1,909) | (1,844) | ||||
Pre-acquisition royalty revenue credited against Cozamin purchase price | — | — | (226) | — | ||||
Loan interest | (33) | — | (33) | — | ||||
Revenue | 1,016 | 582 | 3,048 | 3,993 | ||||
- Cash Operating Expenses
Cash Operating Expenses are determined by adding the impact of non-cash expenses, revenue, other income and tax expenses or recovery to net loss. We have included this information as management believes certain investors use this information to evaluate our performance in comparison to other gold royalty companies in the precious metal mining industry. The table below provides a reconciliation of net loss to Cash Operating Expenses.
For three months ended | For the year ended | |||||||
December | December | December | December | |||||
(in thousands of dollars) | ($) | ($) | ($) | ($) | ||||
Net loss | (19,360) | (2,204) | (26,756) | (12,709) | ||||
Revenue | (1,016) | (582) | (3,048) | (3,993) | ||||
Other income | (6) | 13 | (121) | (79) | ||||
Depletion | 249 | 216 | 943 | 1,685 | ||||
Depreciation | 20 | 29 | 70 | 92 | ||||
Share-based compensation | 536 | 1,078 | 2,806 | 3,323 | ||||
Share of (gain)/loss in associate | 72 | (1) | (172) | 152 | ||||
Dilution gain in associate | — | — | (12) | (100) | ||||
Impairment of royalties | 22,379 | — | 22,379 | 3,821 | ||||
Change in fair value of derivative liabilities | — | (278) | (242) | (4,776) | ||||
Change in fair value of gold-linked loan | (172) | (172) | 51 | |||||
Change in fair value of short-term investments | 45 | (1,060) | 264 | — | ||||
Change in fair value of embedded derivatives | (30) | — | (30) | — | ||||
Loss on loan modification | — | — | 249 | (316) | ||||
Foreign exchange (gain)/loss | 55 | (1) | 132 | (32) | ||||
Interest expense | 814 | 285 | 1,839 | 918 | ||||
Tax recovery (expenses) | (5,603) | (435) | (6,133) | (617) | ||||
Cash Operating Expenses | (2,017) | (2,940) | (8,004) | (12,580) | ||||
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SOURCE Gold Royalty Corp.
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