In a Dec. 19 research note, analyst Brian MacArthur reported that Osisko Gold Royalties Ltd. (OR:TSX; OR:NYSE) received about CA$159.4 million, or US$118.5 million, from Pretium Resources Inc. (PVG:TSX; PVG:NYSE) from its repurchase of Osisko's interest in the Brucejack mine's gold-silver stream. Following the sale, Osisko still has exposure to Brucejack via its offtake agreement for 50% gold.
MacArthur noted that Osisko intends to use the monies from Pretium to reduce its debt and buy shares. It will pay the CA$58 million that are outstanding under its revolving credit facility, after which about CA$30 million will remain due.
Also, the company will apply up to CA$100 million toward buying back shares in line with a previous announcement and "under its normal course issuer bid," the analyst explained.
MacArthur pointed out that such a share repurchase will not impact Osisko's 2018 production guidance, which remains at 77.5–82.5 thousand ounces of gold equivalent.
Raymond James has an Outperform rating on Osisko, whose share price is ~CA$11.77.
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Disclosures from Raymond James, Osisko Gold Royalties Ltd., December 19, 2018
ANALYST INFORMATION
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The analyst Brian MacArthur, primarily responsible for the preparation of this research report, attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers and (2) that no part of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this research report. In addition, said analyst(s) has not received compensation from any subject company in the last 12 months.
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Osisko Gold Royalties Ltd.: Raymond James Ltd. has received compensation for investment banking services within the past 12 months with respect to the issuer.
Osisko Gold Royalties Ltd.: The analyst or associate at Raymond James Ltd. has viewed the material operations of Osisko Gold Royalties Ltd.
