Gold Royalty Corp. (AMEX:GROY) Q3 2023 Earnings Call Transcript

Gold Royalty Corp. (AMEX:GROY) Q3 2023 Earnings Call Transcript November 19, 2023

Joanne Jobin: Good morning. I'm your host, Joanne Jobin, and I'd like to welcome you to the Gold Royalty Town Hall Forum hosted by VID Media. Today's Town Hall will be focused on Gold Royalty's recent quarterly announcement and will be hosted by David Garofalo and Peter Behncke, Manager, Corporate Dev and Investor Relations; and CFO, Andrew Gubbels, will join us at the end for Q&A. After the presentation, I will be delighted to moderate submitted questions from our audience. Now a few words on the company. Gold Royalty Corp. is a precious metals-focused royalty and streaming company offering creative financing solutions to the metals and mining industry. It currently has a diversified portfolio of over 190 royalties located in mining-friendly jurisdictions throughout the Americas.

A close-up aerial shot of a sprawling gold-mining operation in a desert landscape.

The company's business model includes acquiring royalties, streams and similar interests at varying stages of the mine life cycle to build a balanced portfolio, offering near, medium and longer-term attractive returns for investors. [Operator Instructions] And please ensure that you fill in the short questionnaire at the end of the presentation. This really helps us and the company communicate more effectively with you in the future. And before I turn it over to the team, please note, the forward-looking statement at the beginning of this presentation. Gentlemen, the stage is yours.

David Garofalo: Well, good morning and good afternoon as the case may be to everybody. Thank you for attending our Third Quarter Town Hall. I'm delighted to walk through our quarterly results and then hand it over to Peter to walk through the advancements on our prolific and diverse portfolio of royalties. Our operators have been very busy both on the exploration and development fronts of the stocks to talk about today. And what's clear from our Q3 financial results is that, we're very much at a tipping point right now. For the first time, we were free cash flow neutral as we drove down our cash operating cost by 50%. Crystallizing synergies from the mergers we completed in the first year of our existence. There are three companies that we took over.

And we went through an extensive post-merger integration period. We've drove in a lot of the redundant costs out of the business, and that's why you've seen such an appreciable improvement in our operating cost profile. We also saw a 48% increase in our total revenue land and agreement proceeds. And we're poised to be significantly free cash flow positive in 2024 with the startup of Cote next year, which, when fully producing will be Canada's second biggest producing gold mine. And as we saw during the past quarter, they reported IAMGOLD, the operator reported over 90% physical completion of the property. They expect to have about 5 million tonnes or about six months of production of broken ore at the mouth of the mill. So they're in an excellent position to hopefully execute on a smooth ramp-up and significant free cash flow generation -- revenue generation or a royalty over the course of 2024, which represents a significant step change for us in our total revenue profile and again, drives us into free cash flow positive territory.

As we stated in our presentation, our company's operators, Agnico Eagle, i-80 Gold, Blackrock Silver, all announced material positive developments on their respective projects over the course of the quarter as well, which Peter will get into in a bit more detail in his presentation. We're very busy on the acquisition side as well. We continue to supplement what's one of the most prolific and diverse portfolios, not just in the junior royalty space, but in the royalty space generally. We're approaching over 240 royalties in the portfolio with the acquisition of 20 royalties in this past quarter, over 20 royalties, in fact. And we did it in a very creative way, recognizing the capital is scarce in the sector right now. As we've had to be creative in terms of where we've acquired it.

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