Gold Royalty Corp. Price & Performance (GROY)

With more cash flowing assets, strong commodity prices and our stable and low cost structure we expect to see growing revenues and cash flow this year. Our portfolio's growth profile was achieved through transformative value accretive acquisitions made over the company's four year history. These acquisitions secured royalties on large scale long life mines in the late development, near production and ramp up stages. As several key development stage assets have been advanced significantly derisked over the past year, we are happy to provide our five year outlook of 23,000 to 28,000 GEOs in 2029 an over 360% increase from our twenty twenty four geos. We are excited about this longer term growth outlook and we're confident in the potential of our portfolio as we continue to see our operating partners deliver quarter over quarter. Capital allocation will come into focus as we reach an inflection point to positive free cash flows in 2025. Supported by strong production growth and buoyed by record gold prices. We will continue to emphasize discipline prioritizing debt repayment and accretive strategic growth when appropriate. With that, I will pass the call over to Andrew Goebbels to discuss the details of our fourth quarter results and outlook on Slide four.

Thank you, David, and good morning, everyone. We had strong financial performance during the quarter.

With total revenue, land agreement proceeds and interest of $3,800,000 a 192% increase relative to the fourth quarter of twenty twenty three and an approximate 50% increase relative to the third quarter of twenty twenty four. This is primarily due to the continued ramp up of the Cote Gold Mine. Strong commodity prices and initial revenues from the Verus copper stream during the quarter. We achieved a record $12,800,000 in total revenue land agreement proceeds and interests for the full year 2024. A 146% increase relative to 2023 With this revenue growth and our stable operating costs, 2024 was our first full year achieving positive operating cash flows of $2,500,000 as well as positive adjusted EBITDA of $4,800,000 Looking ahead, we expect to see further GEO growth in 2025 to 5,700 to 7,000 GEOs forecast for the year. Our guidance represents a midpoint increase of 16% relative to 2024. It's important to note that 2025 is a ramp up year at three of our key assets, Cote, Borberema and Verus. While our other cash flowing assets are expected to deliver relatively consistent cash flows for the year. We are also happy to present our inaugural five year outlook. We are forecasting 23,000 to 28,000 GEOs in 2029.

This five year outlook reflects continued contributions from our cornerstone producing assets as well as additional production from assets currently under development. Including Ennico Eagle's [indiscernible] at Canadian Malartic, Nevada Gold Mines Wren Orla's South Railroad, and I-eighty's Granite Creek amongst others. It also reflects near term expansion growth amongst assets already in production including Adrianek's Verus mine, IAMGOLD's Cote mine, and Ora's Borba Rama project which is expected to achieve first production by the end of the current quarter. Moving to Slide five, we'll walk through the key inputs that drive our 2025 guidance range. At Borden, we hold a 0.5% NSR royalty over the eastern portion of the mine. Discovery Silver has published a PEA over the porcupine complex, which outlined 24,000 ounces of expected gold production from Borden. Note that the current underground mine workings are plunging further to the east with discoveries targeted future exploration plans fully covered by our royalty. At Borba Rama, where we hold a 2% NSR and provided a Goldlink loan Aura Minerals forecasts 33,000 to 40,000 ounces of gold production this year. Gold royalty will continue to receive two fifty GEOs per quarter in preproduction payments until commercial production is achieved as well as 110 geos per quarter and gold linked interest payments from Ora Minerals.

At Canadian Malartic, where we hold a 3% NSR, over the north area of the Odyssey underground mine, and eastern portion of the Barnett Pit our guidance is based on relatively consistent year over year attributable production. 2025 production production is expected to come entirely from the Barnett Pit. And any potential underground production from the internal zones Odyssey North and East Malartic represents upside to our forecast. At Cote Gold, where we hold a 0.7 NSR royalty over the southern portion of the pit, IAM Gold has provided guidance of 360,000 to 400,000 ounces of production on a 100% basis. At Cozamin, Capstone Copper has provided guidance that is slightly up from 2024. We expect our attributable geos to be relatively consistent year over year. Isabella Pearl is expected to conclude operations by mid-twenty twenty five and Fortitude Gold is now focused on neighboring projects to supplement production. Uphnote is a nearby County Line project which Jackie will discuss later in the presentation. And finally, Verus, where we received initial revenues in Q4 twenty twenty four from our 100% copper stream. Adriatic Metals has provided guidance of 625,000 to 675,000 tonnes milled in 2025. Our stream has fixed payability of 24.5% and ongoing payments of 30% of the spot copper price.

In addition to the cash flowing royalties in our guidance, we also expect to receive $1,600,000 in land agreement proceeds which equates to approximately 600 GEOs at the consensus 2025 gold price of $2,668 per ounce, We also assume a copper price of $4.23 per pound in developing our 2025 guidance. Now looking at our five year outlook, on slide six. We expect to see significant growth in geos to 23,000 to 28,000 by 2029. Which represents an over 360% increase from our 2024 geos, Key assets ramping up to support this five year outlook include Odyssey, Theras, [indiscernible] Both Ferus and Borba Rama are well advanced and funded to expand planned throughput at these operations. And Amico Eagle is preparing a study expected in 2026 which contemplates a second shaft to increase underground production. Recall that Ignigo Eagle has indicated that Canadian Malartic is expected to shift to a fully underground operation by 2028. Note we also hold royalties ranging from 1.5% to 2% in the surrounding area, including the Midway property to the East as well as properties to the South of the mine. Beyond our currently producing assets, our operating partners have provided more clarity around the development and production timelines for Ren Granite Creek South Railroad and County Line which are all expected to supplement our cash flow profile by 2029.

This longer term outlook is based on assets already held in our portfolio and is based on public forecasts expected development timelines and other disclosures by the owners and operators of the properties underlying our interests. We assume a gold price of $2,212 per ounce, and a copper price of $4.24 per pound in developing our five year outlook.

Lastly, I'd like to emphasize that as this outlook materializes, we expect our operating cost structure to remain relatively stable. This will result in higher future operating margins and increased cash reserves As this occurs, we will continue to review our capital allocation alternatives which includes paying down our revolving credit facility to reduce our interest costs and boost free cash flows. With that said, I will pass the call to Jackie to discuss some recent portfolio updates in more detail.

Thanks, Andrew. Turning to Slide seven, I'll spend a few minutes discussing the ramp up of the Verus And Cote Gold mines. As well as progress towards initial production at Bobarema. This will be the first full year of production from Verus. Beyond 2025, Adriatic Metals recently completed an equity race, which now fully funds its planned throughput expansion to 1,000,000 tons per year in 2026. And to 1,300,000 tons per year by 2027, a 63% increase in throughput relative to the original mine plan. IAM Gold expects Cote will reach steady state nameplate throughput of 36,000 tons per day in Q4 twenty twenty five. And we could see further upside IAM Gold has also outlined that the installation of a VERTA mill could further expand Cote's mill capacity to 42,000 tons per day. And at Bogarima, Oro Minerals expects to achieve first gold pour later this month commercial production is expected in the second half of the year. At full Phase one run rate, Bobramo will process 2,000,000 tons per year, representing an annualized production rate of 83,000 ounces of gold per year. Bora has also indicated that the permitting process towards moving the nearby highway is progressing well, which is expected to grow mineral reserves to over 2,000,000 ounces of gold.

From 812,000 ounces today. Our royalty covers both sides of the highway and any future reserve growth. The highway relocation and subsequent associated increase to mineral reserves is also expected to support future expansion of the mining and milling operation in the medium to in the medium term to approximately 3,000,000 to 3,500,000 tonnes per year from the 2,000,000 tonnes per year in Phase one. Moving to Slide eight. We have several other positive catalysts across the portfolio to highlight. At Ignico Eagle's Odyssey Mine, where Gold Royalty holds a 3% NSR over the northern portion of the mine, ramp and shaft development both continue on schedule. And Andrew already mentioned, but it's worth reiterating that Ignicle Eagle will release an internal study outlining potential second shaft in 2026. At Cozamin, where we hold a 1% NSR royalty over the eastern portion of the mine, production is expected to be relatively consistent year over year. Capstone has provided guidance of 23,000 to 26,000 tonnes of copper production from the mine in 2025. We hold a 1.5% NSR royalty and a 3.5% net profit interest at the Wren project. Barrick recently provided clarity over development and production time lines for when the project would be incorporated into the broader Carlin complex plan.

In its Q4 twenty twenty four MD and A, Barrick noted that Wren is expected to achieve an annual production rate 140,000 ounces of gold per year in 2027. Management at I-eighty Gold has indicated that Granite Creek is the primary focus for project development. First at the underground operation which is expected to ramp up production with 20,000 to 30,000 ounces of gold in 2025. We hold a 10% NPI royalty on Granite Creek, and we note that our NPI is subject to a 120,000 ounces gold production threshold, of which approximately 10,000 ounces have been produced against to date. Highlights of updated PEA studies for the Granite Creek underground and Granite Creek open pit projects were published in March and further updates to the mineral resources and a feasibility study are expected in Q4 twenty twenty five. Moving to the Tonopah West project on which Gold Royalty holds a 3% NSR, BlackRock Silver received required approvals to build an exploration decline in 2027 to further advance the project. An expanded drilling program of 15,000 meters is planned in 2025 and an updated mineral reserve resource estimate for the project is expected to be published by the third quarter of this year.

And finally, an agreement has been entered into by Newmont to the Porcupine Complex to Discovery Silver.

As part of the acquisition, Discovery published an updated PEA on the complex, included a nine year life of mine and 867,000 ounces of total gold production at the Borden Mine, which is part of that broader Porcupine Complex. Relevant for us because Gold Royalty holds a 0.5% NSR over the eastern portion of Borden New ownership could lead to a renewed focus on Porcupine And Borden. At Discovery Silver's Investor Day on March 3, management outlined that the potential for further exploration to the east of Borden deposit at depth Our geographic exposure premier operating partners and marquee royalty assets still represent one of the highest quality portfolios in the sector. Gold Royalty's diversified portfolio provides significant optionality to the extensive exploration work conducted by our operating partners. Beyond the selected asset highlights we have already discussed, numerous other advancements continue to move our portfolio forward.

In recent quarters, we've seen the blue cash flowing bucket of our pipeline growth and are excited by the potential for assets such as Wren, Odyssey, South Railroad, County Line and Granite Creek to move from the development to cash flow category in the relatively near term. Moving to Slide 10 and looking ahead to some key upcoming catalysts across the portfolio. You can see that we have a long and growing list of exciting catalysts, which will move our portfolio forward. We've already spoken at length about many of the catalysts, which are contributing to our 2025 and longer term growth including Odyssey, Cote, Verus, Bulberema, Wren and Granite Creek, So I'll just highlight a few catalysts we haven't talked about yet. We're excited by the team at Walbridge Mining who has indicated that it expects to publish an updated PEA on the Fenelon project later this quarter. In the medium term, we have numerous catalysts that will support our growth trajectory towards the aforementioned five year outlook. These include: initial production at County Line by Fortitude Gold, where Gold Royalty holds a 3% NSR royalty Fortitude is advancing permitting and plans to dovetail initial production from County Line with the winding down of operations at Isabella Pearl.

We can look forward to an updated PEA next year at Tonopo West and construction to start with an exploration decline in 2027. And at South Railroad, Orla has outlined that it expects to achieve initial production in 2027. As you can see, there's lots to get excited about with regards to the gold portfolio. I will now pass the call back to David to summarize before opening up for questions.

Thank you, Jackie. There is indeed lots to get excited about as you look across our portfolio the various high quality assets ramping up and entering production. Now despite our high quality portfolio in encouraging developments from our operating partners, we continue to trade at a discount relative to many peers on a price and at asset value basis. During this period, we have placed an emphasis on being disciplined as we continue to grow our portfolio. We have a strong degree of conviction with the quality of portfolio and what our operating partners will deliver and we will continue to be patient as our peer leading growth in cash flow materializes. As we expect continued cash flow growth in future quarters, we are confident this will be the catalyst for a rerating back in line with peers. In the meantime, we will be patient. Paying down our revolving credit facility will be one of our priority uses of capital.

In closing, 2024 was a record year for Gold Royalty with record revenue, record operating cash flow and record adjusted EBITDA. Looking ahead, we have peer leading growth with geos expected to increase by over 360% by 2029 relative to 2024. These strong results demonstrate the built in growth of our portfolio, Our portfolio's growth profile was achieved through transformative, value accretive acquisitions made over the company's four year history. These acquisitions secured royalties on large scale long life mines in late development near production ramp up stages. These assets position Gold Royalty for continued growth in revenue and geos over the long term. Including through the end of the decade. With that, operator, we'd be happy to open up call for questions.

Ladies and gentlemen, at this time, we'll begin the question and answer session. In one, to assemble the roster. Our first question comes from Heiko Eilen from H. C. Wainwright. Please go ahead with your question.

Sorry, I had you on mute. I assume you can hear me all right now.

Yes. Good to see you, Heiko. Thank you.

Hey, David. Hello, team. Thanks for taking my questions. You put out the 2029 guidance, excellent numbers, obvious. Can you give some color on the even longer term? I went through some of the assets this morning just to sort of go out a little bit more. It's me and some of other analysts as well, obviously do DCFs in a much longer term fashion. I assume almost all your major assets should still be in production five years even after this long term guidance, it 02/1934 or so. And building on some of that, can you maybe provide some color on what you're modeling and how you expect the breakdown between gold and copper to be in the very long term I assume your asset base is going be bigger by then as well.

Great. Thanks Heiko. I do have Jackie on the phone and Peter Benke, our Director of Corporate Development Investor Relations is also on the call. So I'll hand it off to them to talk about the longer term horizon. [indiscernible] add any points I may miss. Think Heiko, to your first question on longer [indiscernible] we can't speak definitively about longer term beyond five years. I would note, as you mentioned, many of our cornerstone assets Canadian Malartic, Cote, Varus, and Borba Rama that support that five year outlook. Are based on twenty year plus mine plans based on existing reserves and resources currently So we do have strong conviction that that that five year outlook is sustainable for for a longer period beyond that. And to your second question on the split of gold versus copper are only copper assets currently are the virus copper stream. And the Cozamin mine, which as we approach that five year outlook become a relatively smaller portion on a book value basis we are still appropriately approximately 90% gold and 10% copper.

Maybe that's just caused us some finish that thought. Sorry Heiko, it's Jackie. Part of the reason why copper declines in our portfolio longer term is because Kosemyn mine, for example, at least as it's shown right now in life of mine and reserves and resources. Will decline over time. Now we're obviously hopeful that, that will be extended, but our expectation right now is in line with the company's guidance that, that will decline over time. But more importantly, because assets like the Canadian Malartic underground at Odyssey, Ren and some of the other assets that we have on the gold side will grow so we definitely see more growth on the gold side going forward in the longer term.

Which helps to dilute some of that copper exposure down.

Okay.

Fair enough. I sometimes get some investor questions about your debt. I mean, David mentioned earlier on this call that paying down the revolving debt remains a priority. As I think all of you know, I personally don't really mind a little bit of debt for royalty firms, given that it allow you to expand your asset base when spot gold pricing was meaningfully lower? But can you maybe provide some color on your five year outlook for debt? I mean, the game plan to get this to zero or close to it? Or is the plan to always keep a bit around?

I'm going to hand it off to Andrew and I'll round up the conversation as he completes his response.

I got the whole team today. You do. Hi Heiko.

Yeah, no, with respect to to the debt leverage, look, we've had good support from our lenders, have been able to access our credit facility to build this this foundation, this base, the portfolio we have at the moment. It's allowed us to be able to have operating cash flow in in 2025, we expect free cash flow positive years so the expectation is with the debt we've drawn down for the acquisitions we've made, we're able to generate free cash flow start building on cash. That's really the crux of this business. You see the larger cap peers utilizing their credit facilities as needed for expanding their business. Drawing down on the facility and repaying. I think as we move forward, and it's evident in our five year guidance, we will be in a position where we are generating free cash flow well in excess of the operating cost and financing costs or debt service costs, and we'll be in a position to to repay that facility without without a major problem. The question is, will we debt on the balance sheet in the future? It really is a function of of the opportunities in front of us. In my mind.

Know, the the preference is, as we generate cash flow, we'll assess our capital allocation alternatives, we will look to service that debt and pay it down through the coming periods for the year. I I think having available credit to draw on for opportunities is a positive thing, and at this stage, moving forward, as we've mentioned before, we will look to pay down some of that revolver as as we generate cash flow. So I can't say that we'll carry no debt going forward. I think it's really a function of what we see. I don't foresee us being, as we evolve as a company, being overly highly levered compared to our peers, But again, at this stage in our evolution, to build the base, to get where we want to be, We did review the uses or sources of capital and view the revolver and drawing down as a good source to build that base at the moment. You should see that going down in the future and certainly relative to the cash flow generated in the future, it will be lower.

David, did you wanna add anything?

No, I was just going to say philosophically, and I think that Andrew covered this off well, is using the debt facility has allowed us to get very large accretive deals done on a non dilutive basis. But the objective is to pay that back out of free cash [indiscernible] as possible. So we have that capital available for future non dilutive acquisitions that we think will add value to the business. But really carrying low levels of debt is a priority for us. And you'll see our capital structure simplify over time as our free cash flow generation ramps up dramatically. Dramatically.

Our next question comes from Eric Windmill from Scotiabank. Please go ahead with your question. Great, thanks. Good morning, David and team.

Thanks for taking my question. Just looking out into 2025, I know you kind of touched on it a bit in the preamble, but obviously important year for free cash flow inflection. Any additional in terms of how we should think about the cash flow distribution through the year? I assume it's probably more weighted to second half than first half?

I'll hand that off to Peter and Jackie as well, just to talk about the distribution of the guidance.

Thanks, Dave. Eric, short answer, sorry, Jackie. Short answer, yes, given the ramp up of assets as far as Cote and Borba Rama, second half of the year is expected to to be stronger than the first half. So marginal weighting in that direction.

Okay, great. Thanks, Peter. Appreciate that. Maybe just one more for me too in terms of new opportunities out there. What are you seeing or any additional commentary here in terms of the kind of deals you're looking at here to maybe add to the portfolio?

Peter, do you just want to talk about the broader Yeah, build on that again. Thanks, Dave. And definitely we're still very busy and looking at the market for new opportunities. On the royalty and streaming financing front, the higher commodity price is helping Select. Producers and developers have access to equity markets. We're still seeing a lot of opportunities with some earlier stage companies albeit our focus is always on quality and meeting our thresholds on pricing for a clearly accretive deal. On a PNAVR and IRR basis. Where we have had success is looking at the third party market, from prospectors or other more selective opportunities. But I would note when we're looking at opportunities despite this strong commodity price, we're always applying consensus commodity prices. Which as Andrew noted in our guidance, is closer to 2,200 in the long term. So it's about emphasizing that focus on meeting those those return thresholds that's a financing or a third party opportunity. I'd highlight here as well and get ahead of maybe a potential follow-up question that we did acquire a royalty over the Garrison project earlier this year.

That was a smaller tuck in opportunity that met those thresholds acquiring a 1.2% NSR over an attractive project near Timmins over 2,900,000 ounces So a very attractive dollar per ounce and low peanut multiple. So that's an example of an opportunity where we saw really attractive returns, significant upside, through a bilateral third party process.

I would just add that there's a plethora pre resource opportunities out there that frankly we're just not interested in. We don't want to take flyers. We're really focused on cash flowing, near cash flowing assets. Those Those are the deals that we've really executed on in the last year and a half. It's been Borba Rama, Cozamin, Varus, all either in production or about to achieve commercial production to add cash accretive and value accretive deals to the pipeline We can generate those early stage opportunities to resolve ourselves through sweat equity. We don't need to buy those or allocate scarce capital to those really early stage opportunities. And we continue to generate a couple of royalties per quarter through our generative model at effectively no cost. And it's also been an important source of incremental revenue on option payments on those properties we farmed out. So I think staying focused on later stage operating assets is really going to be the focus, but those are few and far between. And if you can if you look at our evolution over the last four years, the pace of acquisition has slowed dramatically. We did a lot of M and A 2021 when we had a strong currency to do so, but we've really focused keenly focused on later stage opportunities since then.

So we've done a lot fewer acquisitions since 2021. And I think that's going to be a recurring theme is stay disciplined, be patient, allow our abundant crop of assets harvest over the course of next [indiscernible] [indiscernible] free cash flow and expanding margin in our business.

Okay, fantastic. Yeah, appreciate all the extra color. Sounds good. I'll hop back in the queue. Have a great day. Cheers.

Our next question comes from Brian MacArthur from Raymond James. Please go ahead with your question. Mr. McArthur, is it possible your phone is on mute? And we'll move on to John Tomazos from John Tomazos Independent Research. Please go ahead with your question. Thank you for taking my and thank you for your service to the company. First question in your guidance for this year, which properties have a decline? That maybe someone might have overlooked? [indiscernible] cover that first?

Sure, John. I think if we're talking about wider guidance is maybe a little bit below where the market expectations are. I think I think the biggest delta would be our level of conservatism around start ups and ramp ups of various assets?

So none of your projects are down from last year?

No. We do have, sort of flattish production at Canadian Malartic. That would probably be the biggest example of a project that's Where you're discounting your operator's guidance to be careful How much would your guidance be if you follow the operator's guidance?

How much higher would it be?

I don't want to say we're discounting the operator's guidance. I don't want to make sound like we I don't want to ask specifics. I'm just saying in total.

I think the point is, we're being conservative. We're using sort of the lower end of the operator's guidance at the assets that are still ramping up. So that would be Cote, Verus, Boparima, would be the ones where we're looking at things more conservatively and we're still using the upper year's guidance, but we're using what would be the lower end of their guidance.

Is Cote the only property where you're royalty is a subset and someone might have inadvertently overestimated based on the entire property? Are there other royalties where you're a subset? Partial cover.

Yes, partial coverage, we I mean, the other probably biggest example would be Canadian Malartic Malartic. We don't have full coverage at Canadian Malartic. We don't have full coverage of the underground as well. So that's another example of where we're estimating the specific areas where the mine mining is taking place within the mine plan.

And that might be another example of where where the Street might be looking at things slightly differently. Yes. That's probably the next biggest example.

David, if I can ask you a macro question.

Of course.

And thank you. I mean, bought your stock at $1.29 earlier in the call.

So U. S. So I'm not unhappy. Thank you for giving us this opportunity today. Do you ever get the urge to call your old subordinate, Jay at you at our Cisco royalties? [indiscernible] these young jackass analysts don't understand. Why don't you just buy me for US2 dollars and save me the trouble?

Yes. I really do think our business has a lot more in intrinsic value than even that number. It's more than just Canadian Malartic. Obviously, we have common interests at Canadian Malartic. With the Cisco Gold Royalties, but we have an abundant and diversified portfolio of assets that are ramping up quite dramatically over the next couple of years. And the market frankly is not recognizing that intrinsic value. I think we're gonna do far better delivering on that revenue growth and margin growth over the next couple of years and any premium offer for the company could afford our shareholders. There's a lot more intrinsic growth and value growth just by harvesting what already built up. And I hasten to add that every one of our assets are bought and paid for. We have no capital calls. This growth is going to be free growth going forward and also free exploration optionality. Our operating invest over $200,000,000 in brownfield exploration around their existing mines and infrastructure infrastructure. That's free exploration upside. That kind of optionality is why our shareholders have bought this company, both in terms of margin expansion, revenue growth, but also the exploration optionality with well capitalized operators that have both the balance sheet technical capacity to vastly increase the value of their businesses.

And we have top line growth from all of these businesses.

One last one. Thank you for putting up with me, David.

I'm hoping tomorrow the press release says we're not going to pay debt this year and our Board's authorized a 20,000,000 share buyback. Buyback authorization.

Is that too much to hope for?

I think capital allocation is a luxury that we're going to have as we get deeper and deeper into free cash flow territory, whether it's deleveraging, we see as a priority in the current year, but also looking at returns of capital to shareholders in various forms, whether it's share buybacks or dividends. We have a business that's going to have the capacity to do either or. And I think that's the luxury that we look forward to enjoying as this business starts to generate the significant growth and margin expansion that we expect over the next couple of years. [indiscernible] Thank you, John. Ladies and gentlemen, at this time, I'm showing no additional questions. I'd like to turn the floor back over to management for any closing remarks.

Well, thank you everybody for your kind attention today. Of course, you can reach any one of us by email and many of you have our number, but jackiepgoldroyalty dot com. Is our first first point of contact, Jackie. We'll be happy to take any questions you have. But of course, if you want to reach any of us individually, please don't hesitate. Thank you so much for your time today and your faith in our growth and our prospects going forward. And ladies and gentlemen, with that, we'll today's conference call. Do thank you for attending today's presentation. You may now disconnect your lines.