Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q1 2023 Results Conference Call. After the presentation, we will conduct a question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. Please note that this call is being recorded today, May 11th, 2023 at 10:00 A.M. Eastern Time. Today on the call we have Mr. Sandeep Singh, President and Chief Executive Officer, and Mr. Frédéric Ruel, Chief Financial Officer and Vice President, Finance. I would like to turn the meeting over to your host for today's call, Mr. Sandeep Singh.
Merci beaucoup, Sylvie. Bonjour tout le monde. Good morning everybody. Thanks for being with us. It's myself and Frédéric Ruel, as you just heard, that are going to be walking you through the quarter.
An excellent start to the year for us. So happy to be giving you that update. The presentation is available on the website, as well as through the webcast, as of this quarter. So hopefully you have that in front of you, and we'll be referring to page numbers as we go through things. Starting perhaps with Slide 3. As I said, an excellent start to the year. On the left-hand side there, all those high-level metrics had already been released. As again, Frédéric will walk you through some of the more specifics in a second. Over the quarter, we continued to build up cash, and decided to share some of it by increasing our dividend by just over 9%.
We've said it over and over that we continue to prioritize returns to shareholders, and look for opportunities to do that, and find the right balance in doing that. Very happy to kind of hit the button on another increase, after a small hiatus where we were more active on the buyback. Very happy to add, forgive me, nominate Norman MacDonald to our board of directors. Phenomenal individual, phenomenal resource investor in the space for 25+ years, who many of you would have known through his prior prior work, although whether at Invesco or Teachers or Beutel Goodman, among other places.
A phenomenal addition when he joins in due course after the AGM and look forward to having him on the team. Also want to thank Charlie Page, who is reaching the tail end of his tenure based on our policies and has decided not to stand for election. He's been a great steward for the company since the creation of Osisko Royalties and the tail end of the Osisko One days. Thank him for his contributions and look forward to adding Norm to the team. Norm would make the seventh, yeah, seventh new board member in the last circa 3.5 years as part of our board renewal process. Again, strong addition to the team.
With that, I'll pass it on to Frédéric, for the first section to walk you through the quarter, and then I'll pick back up, a little bit later on. Frédéric, over to you, please.
Thank you, Sandeep. Bon matin. Merci de vous joindre à nous pour la présentation de nos excellents résultats du premier trimestre. Good morning. Thank you for joining us today. I'll be brief. The numbers speak by themselves. Let's start with some highlights on slide three of the presentation. Slightly above 23,000 GEOs in Q1 2023, an increase of 27% over the first quarter of 2022. Revenues of CAD 59.6 million compared to CAD 50.7 million in Q1 of last year, which translated into cash flows from operations of CAD 45.5 million, compared to CAD 40.5 million last year. Our cash margin was stable at 93%. We have repaid an amount of CAD 15 million on our revolving credit facility.
Despite that repayment, we ended the quarter with a cash balance of CAD 119 million, compared to CAD 91 million on December of last year. On slide four, we present our GEOs by asset and by commodity. Gold represented 65% of our GEOs in the first quarter, silver 22%, and diamonds and other commodities, 13%. On slide five, we present the growth in our revenues and our operating cash flows, mostly as a result of increased deliveries under our royalty and stream agreements. On slide six, net earnings were CAD 20.8 million, 11 cents per share, compared to CAD 16.8 million or 10 cents per share last year. Adjusted earnings were CAD 32.6 million or 18 cents per share, compared to CAD 24.8 million or 15 cents per share in Q1 of 2022.
On slide seven, we have a summary of our quarterly results in details, including 23,000 GEOs compared to 18,250 GEOs in Q1 of last year. Our gross profit amounted to CAD 42 million, compared to CAD 36 million in 2022. On slide eight, we have a breakdown of our cash margin. The cash margin from our royalties reached CAD 39 million. The cash margin from our streams amounted to CAD 16.5 million for a total in Q1 of CAD 55.5 million, compared to CAD 47.5 million last year. On slide nine, we have a summary of our balance sheet position. Our cash balance stood at CAD 119 million. We held equity investments valued at CAD 494 million.
The revolving credit facility was drawn by CAD 124 million for a net debt position of CAD 15 million at the end of Q1, compared to CAD 57 million at the beginning of this quarter. Our available credit under the revolving credit facility was approximately CAD 615 million, including the accordion. Finally, as a result of our strong margins and cash flows, we increased our quarterly dividend by 9% to CAD 0.06 per share, starting this quarter. I will now turn the call back to Sandeep for a company review of our assets and the near-term catalysts.
Thanks very much, Frédéric. Look, I will be brief, not going through all these slides. I realize today is a busy day for most people. Some of these slides you're used to seeing from us. I will pick out a few things that happened during the quarter that I think are relevant to talk about and then make way for questions as soon as possible. In doing so, I'll skip past slides 11 and 12 if you're following on the deck, and pause on slide 13 for a second to talk about Canadian Malartic. Overall in the quarter, I would say a little bit lighter in terms of our deliveries from sorry, from Malartic in Q1.
Certainly made up by other assets overall, that great quarter that Frédéric just walked you through. I think some of that has to do with just, you know, the underground, the first stopes in the underground being later in the quarter than expected. The first production blast at Odyssey South was in late March. Agnico, our partner, is expecting 50,000 ounces of underground contribution this year. Other progress includes the shaft sinking, which has now commenced. Good progress there overall. We expect good news over the course of the year.
I would remind people that from a global perspective, throughput has been reduced down from circa 60,000 tons to 51,000-51,500 tons per day by Agnico intentionally to kinda optimize the transition now that the last truck of ore has come out of the Canadian Malartic pit and mining has transitioned completely to the Barnat pit and the underground. You know, we hope that transition back to full run rate is in the near term. I think they last talked about it being 2024, early 2024. We'll see how that progresses. Overall, still a phenomenal asset doing phenomenal things for us. That's on the day-to-day side. More in terms of the future of the asset, you've heard us talk about it.
You're hearing some of those same updates, which are phenomenally important for us in terms of filling the mill, growing the resource, looking at new mine plans. In terms of the rest of this year, and it's amazing that we're already in May, but looking forward to that update, a site visit by Agnico that's being run, which many of you probably will be on in June. Looking for the exploration update and kind of broader update that accompanies that event. Then later in the year, the new study, which will hopefully start to fill in some of the puzzle pieces with respect to how exactly that mill and that complex are going to be optimized and maximized. A lot of good news, a lot of news.
We expect that news to be good, to flow throughout the course of the year. Excuse me. Jumping to slide 15, touching on some of the other core assets, starting with Mantos. You know, a good quarter, overall I'd say at Mantos. We saw Capstone, our partner, talk about some preventative maintenance that they took, that they undertook in Q1 to increase, excuse me, reliability. Over the quarter, throughput averaged just over 16,000 tons a day versus just over 15,000 tons a day in Q4. Importantly, there was good signs of that progress in February where the average was 19,000 tons a day. I think we're getting there, our partner's getting there.
Importantly in our last discussions and in their last public disclosure, they talked about expectations to get to that steady state consistently in, you know, I'm quoting now, "In the very near future." Hopefully that maintenance that was undertaken in Q1 sets them up for a strong three quarters ahead. At Eagle, it was a good quarter, a good Q1. Just shy of 38,000 ounces produced versus 24,000 ounces in the same period last year. This is the first quarter where they ramped up to stacking year-round. I think they showed that they can do that successfully. That's a big step forward for the asset in terms of reaching steady state. With a good Q1 behind us, that bodes well at Eagle.
That bodes well for the rest of the year. Kudos to the team there. Similarly at Eleonore, a good Q1. 66,000 ounces produced there in Q1 versus 46 last year. Really, I think the upshot of that is increased, not focus, but increased success rate, I guess, in terms of recruiting, and less absenteeism resulting in just higher mill throughput. I think that was an operation, a fly in and fly out operation that was significantly more challenged than perhaps others throughout the COVID period and the, and the overall flux of people in the mining sector from an employment perspective. Good to see them get a handle on that and hopefully continue to drive forward.
I will jump now to slide 18 to touch on a handful of the positive developments in the development portion of the portfolio or the new assets perspective as well. Maybe starting with CSA. Good progress on that transaction closing over the course of the last couple months in particular. If you're following the Metals Acquisition story, they've now filed their F4 statement, which I believe is fully blessed by the SEC or will be imminently. They've announced their PIPE financing, which they can continue to grow, but at least has the basics of what they need to get a transaction done. Our understanding is we'll be announcing a shareholder vote date in the extreme near term.
Everything they're driving towards a successful outcome for them and obviously then for us. We look forward to that transaction taking shape here still over the course of Q2 is our expectation. Excuse me. At Windfall, you know, a very successful transaction with the joint venture that was announced with Gold Fields. You know, a huge endorsement of the project by a senior company. A significant de-risking of what is a very important asset in our development portfolio. We've said, I've said for a long time that Windfall is an asset that matters in the sector. You know, there has at times have been, you know, doubters or question marks about that, but the size, the grade, the upside in Canada, as I said, all that matters.
It's good to see others see things the same way and good to see a fully financed asset in our portfolio moving forward. I think as well, the combination of skill sets there to build, operate, explore, permit, bodes well given that they're still very underexplored, excuse me, underexplored camp. It was positive to see Gold Fields seeing it the same way, talking about a lot of upside on the immediate deposit, but also, you know, on strike and at depth, but also on the broader land package. Overall, a win-win-win. We look forward to seeing that partnership develop and hopefully intensify their work there on the asset. Maybe next, touching on Hermosa a little bit. We're still driving towards an FID point this year on Taylor.
Hermosa is made up of Taylor and Clark. Worth noting that Hermosa was added to the FAST-41 List by the DOE, the Department of Energy. FAST stands for Fixing America's Surface Transportation Act. Essentially an expedited review. Worth noting that Taylor is largely permitted. It has, you know, its water use permits, its aquifer protection permits. It needs other minor permits along the way, but it's largely advanced in that process. What we see there as a positive is obviously in relation to things like Clark, which is the battery-grade manganese, separate portion of the deposit.
Also in time, I think just the expedited review potential for all of Hermosa, you know, in time, I think leads to a better pathway forward to the Forest Service ground, which is another layer of upside there on the broader land package. All that is good news, as I said, the biggest catalyst point there would be the FID point, a significant amount of investment being made by South32 there even prior to that this year. Maybe, jumping to slide 19 to touch on Casino a little bit. If you hadn't been following that story, in early April, Western Copper and Gold announced a circa $20 million investment by Mitsubishi Materials for about 5% of the company.
Rio Tinto maintained their pro rata with a small top up to keep them at 8%. Good news there in terms of the broader collective that is supporting that asset and that company. This is a very good copper gold porphyry that can be built, and in my opinion, should and will be built. you know, these investments don't tick that box fully in terms of a shovel in the ground or anything close, but certainly it's very promising to see that collective forming around Western Copper hopefully in time a coalition of the willing. That's an important asset for us that's moving forward in the background. I guess with that, I will just highlight slide 21, which you've seen versions of in the past.
We've updated this slide more recently, I'm not sure everyone's seen the updated version to take into account another 1.1 million meters of drilling in 2022. 6th year in a row, if you squint and round where we've been on average over one million meters or at one million meters, depending on how you wanna look at it. Obviously, I touched on some of the highlights that are coming out of that work, but there are many, many others. If you look at slide 21, you see a story of, you know, a year ago it was significant additions to the resource base. This year it was significant movement in the quality of those resources with a lot of ounces, moving from M&I into a significant PMP increase.
We'll continue to see that ebb and flow, but just a lot of good work being done by our partners that we are, and our shareholders are benefiting from. On slide 22, just a recap of where we're trading. We've had a good start to the year, not one we're satisfied with, but we've had a good start to the year. We've outperformed, really, we're still just making up ground in our minds. Importantly, the underlying NAV keeps growing based on our partners' efforts, some of which I just highlighted, as our asset base continues to improve, as our assets are hugely important to most, if not many or all of our partners, who are advancing them.
That's the end of what I wanted to touch on, at least formally. Certainly, operator, happy to take questions. This time around, we do have some questions on the webcast. If it's all the same, you can put your questions through the call. If you put them through the webcast, you have to type them in. We do see them. We'll probably get to those after those that are on the phone live. Operator, over to you to see if there are any questions on the line, live call.
Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw from the question queue, please press star followed by two. If you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and press star one now if you do have any questions. Your first question will be from Ralph Profiti at Eight Capital. Please go ahead.
Thanks, operator. Thanks for taking my questions, Sandeep. Just firstly on the, you know, the MD&A disclosure about stronger GEOs through the rest of the year. I just wanna kind of see if I have it right that the combination of CSA plus Mantos Blancos plus Malartic is kind of covering the bulk of where, you know, we're trending in terms of the first half, second half split, if I have that right? If there are any other assets that you see that could, you know, sort of complement that stronger GEO as we get to year-end?
No, look, I think that's largely correct. I would include Eagle in that mix, even though they had a good quarter. You know, seasonally, it wasn't, you know, it's still gonna have a stronger rest of the year, we believe. If you look at things like CB, that had a tougher Q1. They had some equipment issues that have been resolved, so we expect to see some progress there. Overall, I think the crux of what you said is accurate.
Okay, great. Great. Thanks for that. I wanted to come and maybe ask a question on the deal pipeline. Sandeep, we've seen this kind of $2,000 an ounce gold price uptick. you know, we don't know if it's sort of sustainable or we're going for higher levels here. If we, if we do, would you expect to see some go-ahead decisions on growth projects that are in the gold pipeline as sort of a source for more deal-making? Or would you see, you know, the potential for opportunistic M&A, you know, using royalties to fund M&A as a mechanism for the, for the next few deals in the pipeline?
Look, I think it's both. I think it's all of the above and others. Certainly, a $2,000 gold price is nothing to whine about. You know, we're optimistic about the future, but I think we're very comfortable with where the price is now. It does lead to exactly what you said, which is, you know, go-ahead decisions on assets, significant funding for the right assets, maybe not all assets in this market, but the right assets. You've seen deals, Windfall is an example of that. You know, development company, you know, M&A transactions haven't been in vogue for a while as people have focused on production. I think, you know, in a world of finite assets, we're seeing that start to change as well.
Yeah, no, I think that does bode well. I think the other thing I would add is just generally, you know, whilst you're right, I still think even at $2,000 gold in the mining sector and in the entire economy, I think we're seeing a tighter crunch on credit and access to credit, access to debt, both access to and cost of, that's pushing people back towards us in our business as well. We're kind of in a sweet spot here where not only are commodity prices very attractive, but there's, you know, there's still just not that much capital, both equity and debt to fund what the sector needs. That's, that's what historically the royalty and streaming sector has bridged for.
I do see that pipeline getting better, not worse.
Good. Okay. That's good context. Thanks very much.
Thank you.
No problem, Ralph. Thank you.
Next question will be from Adrian Day, Investor. Please go ahead.
Yeah. Hi, how are you? I have two questions, if I may. The first one, a broader question. I think I heard 67% of your revenue from gold. Are you comfortable with that kind of mix, or how low would you be comfortable with gold going? That's the first question. The second question, I just wanted to clarify something, if I may. Your royalty on Malartic, is it actually on Malartic the ground, or does it cover other throughput from the mill?
Okay. Hi, Adrian. Yeah, happy to cover both those questions. Good questions. Look, with respect to the metals mix, yes, it was 65% for the quarter. That was roughly consistent. When you look at gold and silver, you add another 20 some odd %. You know, that's the crux of our business. That's not changing. Overall, if you look at us kind of on a near-term basis or a longer-term NAV, or longer-term production basis, you kind of end up in the 70/20/10 type of split. You know, 70% gold, 20% silver, 10% other. Right now, that 10% other is made up of diamonds.
As we've talked about in the past, you know, those are shorter-lived and, and less important to us, and those will, as they fizzle out, they'll be replaced by 10%, a 10% other that is made up primarily of base metals and, and copper. That's the split we feel comfortable with. That's how we're made up right now, and our focus will continue to be on those primary objectives. With respect to Malartic, excuse me, and you can pick up some of this on slides 13 and 14. We have both, I guess. We have a royalty on Malartic that is 5% of the open pit. On slide 13 on the bottom left, you'll see what it translates to on the underground deposits.
Based on the current mine plan that Agnico has put out, it's about 4.5% on the underground, and the more East Gouldie they find, the more that will trickle up as well. Five on the open pit, 4.5 on the underground is a fair way to look at it right now. Outside of that, we do have a royalty on the mill, so we have those royalties that I just described on everything that is Malartic, that was sold to Agnico and Yamana eight years ago. Anything else that goes through the mill, that they're talking about, we would get a CAD 0.40 per ton mill royalty on. When there is 40,000 tons of free capacity in the mill, that's gonna be important. That's useful.
Yeah.
Importantly as well, or more importantly, some of those sources of extra mill feed that they're talking about putting through there, include Upper Beaver, potentially other resources like Upper Canada in Ontario. On Upper Beaver, we do have a 2% royalty as well. We would get the double dip on the mill royalty and the 2%. Maybe a lot to unpack there, but the good news is on the in aggregate 15 million ounces that have been delineated in the underground so far, we would have an aggregate, you know, 4.5% royalty, and we have other sources of catalyst as they put additional material through that mill. Hopefully that are clear, Adrian, answers your question.
Yeah. No, that's excellent. I, I honestly didn't realize you had the royalty on the, you know, the surcharge on the mill throughput. That's great.
Yeah, look, it was, it was clear even to the team, nine years ago that that mill, 60,000 ton per day mill in the Abitibi is a valuable resource. It hasn't had a day of spare capacity or a ton of spare capacity in the last 10 years of mining the Malartic mill, mine. In time, it will, and we, like Agnico, fully believe that it will become the center of gravity in the Abitibi for anything that either is not viable on its own or just would be made more viable if it didn't need a standalone mill. Yeah, no, it's all good news.
As I said earlier, the updates that we're expecting and kind of expecting pretty soon now, the year does fly by, in June and at the end of the year, I think will be good gates to go through in terms of how Agnico is thinking about the, that whole picture.
Okay, great. Thank you so much.
My pleasure, Adrian.
Thank you. Next question will be from Kerry Smith at Haywood Securities. Please go ahead.
Thanks, operator. Sandeep, do you think, based on your analysis, that you will be funding that copper stream on the mine with Metal Corp, or how are you sort of viewing that today?
Yeah, look, I mean, my analysis is less important. Their analysis matters more. This is their right as a backstop. In all of our conversations, with that caveat, I would say in all of our conversations, we see them valuing that copper stream, valuing the existence of it in their funding stack. We do see them taking some of it. Now, that remains to be seen, it remains to be seen how much do they take. Yeah, I'm optimistic that we'll be able to fund a good chunk of that, either way, that determination will happen here in the very near term.
Do you think that when they decide that would be on closing, or do you think that would be a subsequent event? I guess it would be on closing probably, would be your expectation.
Yeah. The gate they need to go through is their shareholder vote, which, as I said, they're gonna be setting a date here for imminently. And I expect that date to be basically very early June, barring any kind of unforeseen circumstances. Once that vote happens, they'll know what their redemptions have been in the SPAC. They'll know what their PIPE is by then, and then the gap, if there is one, will be made up of other sources, starting with the copper stream. Yeah, it's all, it's all gonna flush itself out here in the next, you know, several weeks.
Okay. Okay, that's helpful. Thank you.
No problem. Look, I fully admit, and this is to no fault of anybody's, this has been a long transaction. The team there at MAC, Mick McMullen and his team have done a phenomenal job of stick handling what is a very complicated transaction, given the size of it, the, the moving pieces, the copper price dip would be an understatement that was felt over the course of 2022. It's really nice in seeing this come out of, come out of that extended period, at the right time for them, at the right time for us, and look forward to getting that done.
Thank you.
Thanks. Thanks a lot, Kerry.
As a reminder, ladies and gentlemen, if you would like to ask a question, please press star followed by one on your telephone keypad. Your next question will be from Cosmos Chiu at CIBC. Please go ahead.
Hi. Thanks, Sandeep, Frédéric, and team. Maybe first off, two questions on taxes. Sounds like the global minimum tax will actually happen, maybe sometime in 2024. Have you run through an analysis in terms of what the potential impact could be for Osisko Gold Royalties and anything that you can potentially share with us?
Sure. Hi, Cosmos.
Hi.
I can start, and do my best tax impersonation. Frédéric, you can shout me down afterwards. Look, we have obviously been tracking that while for the last, I mean, how long has it been? Two years, 18 months at least. First and foremost, as you would know, we have the least... I mean, we just have more royalties than streams, so by fact, we have the least amount of stream international stream exposure. If it were to apply, it would have what feels like a pretty minimal impact to us. More importantly, we do not meet the minimum threshold to be caught in that 15% global minimum tax. It's based on...
One of the pillars is based on revenues of at least EUR 750 million. Whilst we hope to get there one day, we are not there yet. It looks to us like it trips up some of our larger peers, but not us. If that changed, as I said, I revert back to the start of my comment. Right now there have been no discussions to change that threshold, that pillar. We don't see it impacting us the same way it would be impacting some of our peers, as you rightly point out, looks like in 2024. Frédéric, did I miss anything important there?
Nope, you're 100% correct, Sandeep.
Even with the potential silver stream from CSA and the copper stream potentially from CSA, you would still fall under that number.
Yeah. Look, what are we at, Frédéric? 200 and some odd, CAD 220 million, CAD 225 million, you know.
You're right.
We would need to have quite a bit of success from a revenue-generating potential to be at EUR 750 million. Don't discount us, but it might take us a little while to get there.
I believe in you, Sandeep. You'll get there.
Sure. Appreciate it.
My second question on taxes. I guess last night, you know, you recorded an expense, income tax expense of CAD 8.4 million. In terms of your adjusted earnings, you adjusted out CAD 7.46 million, a big chunk of it. Could you maybe remind us of the rationale for that adjustment once again? I think you do it every quarter. I just wanna get a reminder.
Sure. Frédéric, I've exhausted my tax impersonation. If you wanna pick that up. Essentially, I mean, essentially, Cosmos, it has to do with deferred taxes. Why don't you go ahead, Frédéric?
Okay.
Yeah, exactly. We adjust the adjusted earnings for deferred taxes right now. These are not cash taxes. We have approximately, what, CAD 900,000 of cash taxes paid in Q1, mostly on withholdings from foreign revenues. That's. You're correct. That's an adjustment that we've done in the past to exclude the deferred taxes, which are not right now taxes payable, but more an accounting thing.
Yeah. That will continue to be the case for what looks like the rest of this year, at least. Maybe by the tail end of this year, we might have some minimal taxes payable barring new investments that are made, and then that starts to change a little bit 2024 and thereafter. Yeah, that's the answer for now, Frédéric Ruel. Sorry, Cosmos.
Yeah. Great. Then maybe just switching gears a little bit, Sandeep. Great to see that you've increased your dividend by 9.1%. It kind of shows how strong the company is. My question is, you know, if I work it out correctly, your share price has gone up this year, as you mentioned. I still work it out to a 1% dividend yield. I'm just, I forget. Is there a number that you're trying to get to in terms of dividend yield? Or how do you look at, you know, increases, frequency of increases to dividend and whatnot?
Yeah. Look, your math is about right. Maybe just a tick above that. Look, we were due for an increase. We've got the cash flow. The cash flow is growing. Last year, we took more of that and bought back stock that was just ridiculously cheap. We might do that again. We're always gonna find the balance in terms of capital allocation between investing in new growth, raising dividends progressively and buying back our stock or just building up a cash buffer to invest. We've got the strength to do any and all of that. You know, our balance sheet is pristine at the right time. Essentially almost zero net debt or trivial amount of CAD 15 million.
Yes, we do have to fund that TSA transaction, plenty of room on our credit facility that we will use disproportionately for the foreseeable future, that and our cash flow to fund transactions. Yes, no, we feel pretty good about it. You know, the payout ratio, had we done nothing, would've been, you know, amongst the lowest that we've had in our history, really. We didn't think all that was fair. We wanna continue to reward shareholders, and their confidence in us and the dividend is one way to do that.
Okay. Maybe one last question. You know, I saw that in your guidance for 2023 in terms of GEOs, you've included the CSA stream since or beginning, retroactive to February 1st. Is that just part of the contract that you have in place? Number two, when it does happen, am I gonna see like a big bump? Like, are we gonna catch up February and then also March, so there's gonna be a blend quarter where it could be five months worth of GEOs and revenue coming in. Is that how it works?
Yes and yes. It is the Silver Stream has an effective date of February first. As long as the transaction closes, which we're highly confident it will, that's basically ticking towards us. Whenever the first quarter is that the transaction closes, and hopefully that's Q2, there'll basically be five months of production in that in that quarter.
Great. Thanks again, Sandeep and Frédéric and team. Those are all the questions I have.
Thank you.
As a reminder again, ladies and gentlemen, if you would like to ask a question over the phone, please press star followed by one. At this time, sir, we have no other phone questions.
Okay. Sorry, let me manage this. I think there are at least a couple questions on the webcast. I'm just keeping an eye on that. The first one, I have to read these out, I believe, so bear with me. It's our first time doing this. Apparently some people just don't like the art of an old-fashioned phone call. What are your stock repurchase plans? I guess this kind of funnels back into the last question as well. As I said, we've always tried to... We don't have a strict mechanism or formula or equation we follow. We do track all of our options at all times and we decide what the best use of our capital is when we're looking, staring at what our opportunities are in front of us.
Just because we increased our dividend this time around doesn't mean we won't come back to stock repurchases. We'll look at what the market gives us, and look, a lot of days, even with our recent outperformance, a lot of days the best answer is gonna be to get more exposure to Malartic and Mantos and Eagle and Windfall and Casino and Hermosa and go down the list. That's just something we track as a team and we try to make the best possible decisions with the information in front of us. I believe that was the only question on the webcast, but if I'm lying, someone please shout me down, and I'm happy to be told otherwise.
Thank you, sir. We do have another questions on the phone from John Tumazos.
Okay.
At John Tumazos Very Independent Research. Please go ahead.
Good morning, Sandeep.
Morning, John. How are you?
Well, well. Some of the different companies are having issues with cost creep. This morning we saw Seabridge filed, I think, for another $150 million royalty on top of the $225 million they sold last year. I guess it's costing them a little more for their project. I was chatting with a Quebec exploration company the other day that shut down a camp in Quebec. The province requires every camp to have a nurse, and their nurse quit. They were making $225,000. Newmont paid them more at Éléonore. It's getting kinda hard to figure out what costs of doing business are. Are you staying at your criteria or moving to things already in production that don't have to build the factory yet? What's your best way of managing construction cost, timing and uncertainty?
Yeah. Look, John, I think there's, it's an excellent question, and there's a lot that is continuing to happen in the sector. It's, you know. If there's inflation in the world, I have always said, then it's worse than mining because mining is, it's two things. It's people intensive, and it's energy intensive. A little bit of relief on the energy side so far this year, but I don't see that, you know, those people issues are sticky ones, both in terms of availability of people, you know, technical talent and also what it takes to retain them. We see that in our portfolio, in our set of assets. Thankfully, our partners are doing a phenomenal job dealing with it. You touched on Eleonore.
I think they had a good phase of dealing with it. We're fortunate that our assets are, maybe starting with our existing portfolio, we're fortunate that our assets are so important to our partners. When you go down the list, they genuinely matter. We're seeing a lot of investment time and energy and money into those assets to resolve those issues. They are issues, but we trust our partners. They're some of the best in class, and we trust their motivations because they're so important to them, that they will resolve them. Obviously, there's costs associated with that that they have to deal with, but the assets are good enough that they can withstand it. As we look out from here, I'd say a couple things to your question.
One is all that does to me is as a, as a person who tries to simplify things, is it justifies elevated commodity prices for some time. That's good for us in our existing portfolio in terms of pushing forward assets. Our partners as well have always shown an ability to raise capital better than I'd say the aggregate market. So our assets are being fed with the money they need to move forward. It's not always a straight line, and it's not always as quickly as you'd like. I think if you look at our portfolio, it's better set up that way than most. Good news there. Yeah, as we look out, we always manage what we consider timeline risks. Those are our risks in the royalty sector.
You know, when there's extra costs, we don't suffer, at least not immediately or directly, but delays we do suffer from. Yeah, that hasn't changed our view, John. We've been pretty steadfast in the last few years that, you know, yes, we will take on, you've seen us take on some later stage assets when the returns and the asset quality is high. There's good assets, there's good room in our portfolio for an asset at any stage. Our larger dollars would be kept for either production or near term or line of sight to production. That hopefully you're on the other side of that. You're never fully on the other side of that mechanism, but or that dynamic.
That would be, I guess, the first level answer to your question, John.
I apologize, Sandeep, if I'm repetitive. I had a long-winded CEO call me, and I couldn't hang up, and I missed the first part of your call. Could you give an update on the Amulsar project in Armenia, where I think you retain a 40% ownership stake in addition to the stream? Is it too much for the shareholders to hope that you get paid something for that 40% in the stock of the new owner or incremental royalty or cash or how do you think that's gonna settle out?
It's not, it's not ground we covered, John, so happy to now. We didn't get into it. With respect to Amulsar, I would say, as I've said before, you know, we work diligently behind the scenes to find the last piece that is missing in the last two plus years. There's been unfettered access to the site. We've seen the Eurasian Development Bank step in with a big check. We've seen the blessing of the government.
We've seen all the things that we need to get re-excited about that asset, which is important to us, save the last piece, which is an operator and the last of the funding to take a project that's circa 70% built, complete it and end up with a +200, you know, somewhere between a 200,000 and 250,000 ounce a year mine on the other side. We work on that path. It's, you know, obviously $2,000 gold and all of the other positive developments that I mentioned are helping that. Until it's done, it's not done, but we continue to work on it.
It's an important de-risking event, one that, you know, it's one of those things I used to say, it's a light switch that's off that we are very intent on turning back on. With respect to your specific question about the equity, you know, our primary objective is to see that stream reactivated. Whether the equity has value on top of that, you know, time will tell. That's the beauty of optionality in the gold sector. With prices moving the way they are, we're not gonna close that door. First and foremost, I'd say it's fair to say that we're after value on the stream, which is why it was protected in that receivership process in the first place. Beyond that, time will tell.
Thank you, and congratulations.
Thank you, John.
Thank you. At this time, Mr. Singh, we have no other questions. Please proceed.
Okay. I'm figuring out my technology, and I can tell that there are no other questions on the webcast either. Thanks everyone for your time this morning. Maybe as a public service announcement, just a reminder that Sunday is Mother's Day, and as someone who has disappointed both their mother and their wife in past years, I plan on trying to break that streak. Hopefully, hopefully you're successful in doing the same. Thanks again, and be well.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines.