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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
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. [Operator Instructions] Please note that this call is being recorded today, May 11, 2023 at 10:00 AM Eastern Time.
Today, on the call, we have Mr. Sandeep Singh, President and Chief Executive Officer; and Mr. Frederic Ruel, Chief Financial Officer and Vice President, Finance.
I would now like to turn the meeting over to our host for today's call, Mr. Sandeep Singh.
[Foreign Language]
Good morning, everybody. Thanks for being with us. Myself and Frederic 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 that have already been released. And as again, Fred will walk you through some of the more specifics. And a second, over the quarter, we continue 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. So very happy to kind of hit the button on another increase after a small hiatus where we were more active on the buyback
So that's positive as well. Very happy to add forgive me, nominate Norman McDonald to our Board of Directors, phenomenal individual, phenomenal resource investor in the space for 25-plus years who many of you would have known through his prior work whether at Invesco or teachers or [indiscernible] among other places. So a phenomenal addition when he joins in due course after the AGM and look forward to having him on the team, but 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. We've been a great steward for the company since the creation of Osisko royalties and the tail end of the Osisko one days. So thank him for his contributions. And look forward to adding norm to the team. Norm would make the seventh new board member in the last circa 3.5 years as part of our Board renewal process, and again, strong addition to the team.
So with that, I'll pass it on to Fred for the first section to walk you through the quarter, and then I'll pick back up a little bit later on. So Fred, over to you, please.
Thank you, Sandeep. [Foreign Language] 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 3 of the presentation. Slightly above 23,000 GEOs in Q1 2023, an increase of 27% over the first quarter of 2022. Revenues of $59.6 million compared to $50.7 million in Q1 of last year, which translated into cash flows from operations of $45.5 million compared to $40.5 million last year.
Our cash margin was stable at 93% and we have repaid an amount of $15 million on our revolving credit facility. And despite that repayment, we ended the quarter with a cash balance of $119 million compared to $91 million on December of last year.
On slide 4, 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 5, 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 6, net earnings were $20.8 million, $0.11 per share compared to $16.8 million or $0.10 per share last year. Adjusted earnings were $32.6 million or $0.18 per share compared to $24.8 million or $0.15 per share in Q1 of 2022.
On slide 7, 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 $42 million compared to $36 million in 2022.
On slide 8, we have a breakdown of our cash margin. The cash margin from our royalties reached $39 million. The cash margin from our streams amounted to $16.5 million for a total in Q1 of $55.5 million compared to $47.5 million last year.
And on slide 9, we have a summary of our balance sheet position. Our cash balance stood at $119 million. We held equity investments valued at $494 million. The revolving credit facility was drawn by $124 million for a net debt position of $15 million at the end of Q1 compared to $57 million at the beginning of this quarter. Our available credit under the revolving credit facility was approximately $650 million, including the accordion.
And finally, as a result of our strong margins and cash flows, we increased our quarterly dividend by 9% to $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, Fred. So look, I will be brief, not going through all of these slides. I realize today is a busy day for most people and 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. So 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 Fred just walked you through. I think some of that has to do with just 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. So good progress there overall and we expect good use 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 tonnes per day by Agnico intentionally to kind of optimize the transition now that the last truck ore has come out of the Canadian Malartic pit and mining has transitioned completely to the Barnat pit and the underground. We hope that 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. But 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. So 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 been run, which many of you probably will be on in June, so looking for the exploration update and kind of broader update that accompanies that event. And 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. So a lot of good news, a lot of news. We expect that needs to be good to flow throughout the course of the year.
Jumping to Slide 15. Touching on some of the other core assets, starting with Mantos. A good quarter. Overall, I'd say at Mantos, we saw Capstone or partner talk about some preventative maintenance that they undertook in Q1 to increase -- excuse me, reliability over the quarter throughput average just over 16,000 tonnes a day versus just over 15,000 tonnes a day in Q4, Importantly, there was good signs of that progress in February, where the average was 19,000 tonnes a day. So I think we're getting there. Our partner is getting there. And importantly, in our last discussions and in their last public disclosure they talked about expectations to get to that steady state consistently on quoting now in the very near future. So hopefully, that maintenance that was undertaken in Q1 sets them up for a strong three quarters ahead.
At Eagle, a good quarter, 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. So -- and I think they showed that they can do that successfully. So that's a big step forward for the asset in terms of reaching steady state and with a good Q1 behind us, that bodes well at Eagle, that bodes well for the rest of the year. So kudos to the team there.
And similarly, at Eleonore, a good Q1, 66,000 ounces produced there in Q1 versus 46% last year. And really, I think the upside of that is increase, 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 overall flux of people in the mining sector from an employment's perspective. So, 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 of 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. And our understanding is we'll be announcing a shareholder vote date in the extreme near-term.
So, we think they're driving towards a successful outcome for them and obviously then for us. So, we look forward to that transaction taking shape here still over the course of Q2 as our expectation.
Windfall, a very successful transaction with the joint venture that was announced with Goldfield, huge endorsement of the project by a senior company, significant derisking of what is a very important asset in our development portfolio. And we've said -- I've said for a long time, that Windfall is an asset that matters in the sector. There at times have been doubters or question marks about that, but the size, the grade, the upside in Canada, as I said, all that matters. And so good to see others few thinks 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 build, operate, explorer, permit bodes well, given that they're still very underexplored camp, and it was positive to see Goldfield seeing it the same way, talking about a lot of upside on the immediate deposit, but also off strike and at depth, but also on the broader land package. So, overall, a win-win-win, and 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, but worth noting that Hermosa was added to the FAST 41 list by the DOE, Department of Energy. FAST stands for Fixing America's Surface Transportation Act. So, essentially an expedited review.
Worth noting that Taylor is largely permitted. It has its Water Use Permit, the [indiscernible] protection permits, it needs other minor permits along the way, but it's largely advanced in that process. But 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. But also in time, I think just the expedited review potential for all of Hermosa 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. So all that is good news and as I said, the biggest catalyst point there would be the FID point, but a significant amount of investment being made by sell-through to there even prior to that this year.
Maybe jumping to slide 19, to touch on CASINO a little bit, if you haven't been following that story in early April, Western Copper & Gold announced a circa $20 million investment by Mitsubishi minerals -- materials, excuse me, for about 5% of the company.
Rio Tinto maintained their pro rata with a small top-up to keep them at 8%. So good news there in terms of the broader collective that is supporting that asset and that company. This is very good Copper-Gold Porphyry that can be built. And in my opinion should and will be built.
These investments don't tick that box fully in terms of shovel in the ground or anything close. But certainly, it's very promising to see that collective forming around Western Copper Porphyry in time, a coalition of the willing. So 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, so I'm not sure everyone's seen the updated version to take into account another 1.1 million meters of drilling in 2022.
So a six year in a row, if you squint and around where we've been on average over millimeter or 100 millimeters its depending on how you want to look at it. And obviously, I touched on some of the highlights that are coming out of that work, but there are many, many others.
And if you look at slide 21, you see a story of -- a year ago it was significant additions to the resource base. This year, a significant movement in the quality of those resources with a lot of ounces moving from M&I to a significant P&P increase. So we'll continue to see that ebb and flow, but just a lot of good work being done by our partners that we and our shareholders are benefiting from.
And then, on slide 22, just to recap of where we're trading. We've had a good start to the year. It's not one we're satisfied with, but we've had a good start to the year. We've outperformed, but 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 and as our assets are hugely important to most -- if not many or all of our partners who are advancing them.
So that's the end of what I want to touch on at least formally and 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, but operator, over to you to see if there are any questions on the line.
Thank you, sir. [Operator Instructions] And your first question will be from Ralph Profiti from Eight Capital. Please go ahead.
Thanks, operator. Thanks for taking my questions, Sandeep. Just firstly, on the MD&A disclosure about stronger GEOs through the rest of the year. And I just want to kind of see if I have it right that the combination of CSA plus Mantos Blancos, Prosmilartic is kind of covering the bulk of where we're trending in terms of the first half, second half split, if I have that right, or if there are any other assets that you see that could sort of complement that stronger chat as we get into year-end?
No, look, I think that's largely correct. I would include Eagle in that mix, even though they had a good quarter, seasonally, it wasn't it's still going to have a stronger rest of the year, we believe. And if you look at things like CD [ph], that was one that had a tougher Q1 they had some equipment issues that have been resolved, so we expect to see some progress there. But overall, I think the crux of what you said is accurate.
Okay. Great. Great. Thanks for that. And 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. We don't know if it's sort of sustainable or we're going for higher levels here. 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 the potential for opportunistic M&A using royalties to fund as a mechanism 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 wine about. So 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 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 when fall is an example of that, development company M&A transactions haven't been in vogue for a while as people are focused on production. But I think in a world of finite assets, we're seeing that start to change as well. So yes, I think that does bode well. I think the other thing I would add is just generally 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 and access to debt, both access to and cost of and that's pushing people back towards us and our business as well.
So we're kind of in a sweet spot here where not only at commodity prices very attractive, but there's still just not that much capital, both equity and debt to fund what the sector needs and that's what historically the royalty streaming sector has bridge tour. So I do see that pipeline getting better, not worse.
Okay. That's good context. Thanks very much.
No problem, Rob. Thank you.
Thank you. Next question will be from Adrian Day [ph], investor. Please go ahead.
Yes. 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. And then the second question, I just wanted to clarify something, if I may. Your royalty on Malartic, is it actually on Malartic ground, or does it cover other throughput from the mill?
Okay. Hi, Adrian. Yes, happy to cover both those questions. Good questions. So 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 had another 20-some-odd percent that's the crux of our business, and that's not changing.
Overall, if you look at it 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, 70% gold, 20% silver, 10% other. Right now, that 10% other is made up of diamonds but as we've talked about in the past, those are shorter life and less important to us, and those will as they fizzle out, they'll be replaced by 10% -- 10% other that is made up primarily of base metals and copper. So 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, and you can pick up some of this on Slides 13 and 14. We have both, I guess. So 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. But based on the current mine plan that Agnico has put out, it's about 4.5% on the underground and the more ease gold they find, the more that will trickle up as well. But 5% 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 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 $0.40 per ton mill royalty on. And when there is 40,000 tons of free capacity in the mill, that's going to be important, that's useful.
But 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. And on Upper Beaver, we do have a 2% royalty as well.
So we would get to double dip on the mill royalty and the 2%. So a lot of -- they be 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, 4.5% royalty, and we have other sources of catalysts that put additional material through that mill. So hopefully, that clear Adrian answers your question.
Yes. No, that's excellent. I honestly didn't realize you had the royalty on the surcharge on the mill throughput. So that's great.
Yes. Look, I mean, it was clear even to the team nine years ago that, that mill, a 60,000 tonne 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 mine. But in time, it will. And we, like Agnico fully believe that it will become the center of gravity of 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. So yes, no, it's all good news.
And 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 that whole picture.
Okay. Great. Thank you so much.
My pleasure, Adrian.
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 come stream on – on the mine with middle court, or how are you sort of doing that today?
Yeah. Look, I mean, my analysis is important. Their analysis matters more. This is the right as a backstop in all of our conversations, so with that caveat, I would say, in all of our conversations we see them valuing that copper stream, i.e. valuing the existence of it in their funding stack. And we do see them taking some of it. Now that remains to be seen, and it remains to be seen how much do they take. But yes, I'm optimistic that we'll be able to fund a good chunk of that. And either way, that determination will happen here in the very near term.
And do you think that when they decided that, that would be all closing, or do you think that would be a subsequent event? I guess it would be a closing problem. It would be your expectation?
Yes. So the gate they need to go through is their shareholder vote, which as I said, they're going to be setting a date here for imminently and 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 stack, 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. So yeah, it's all going to flush itself out here in the next several weeks.
Okay. Okay. That's helpful. Thank you.
No problem. And look, I fully admit and this is to no fault of anybody. This has been a long transaction, the team there at Mac, Mick Magal [ph] and his team have done a phenomenal job of stick handling what is a very complicated transaction given the size of it, the moving pieces, the copper price gift would be an understatement that was felt over the course of 2022, but it's really nice to see this 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. Thanks a lot Kerry.
[Operator Instructions] Your next question will be from Cosmos Chiu of CIBC. Please go ahead.
Hi. Thanks, Sandeep, Fred and team. Maybe first off two questions on taxes. It sounds like the global minimum tax 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. I can start -- I can start and do my best tax impersonation and Fred, you can shut me down afterwards. But look, we have obviously been tracking that, quail. for the last -- I mean how long it's been two years, 18 months at least. And first and foremost, as you would know, we have the lease -- I mean, we just have more royalties and streams. So by fact, we have the least amount of stream -- international stream exposure. So if it were to apply, it would have what feels like a pretty minimal impact to us. But 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 €750 million. And whilst we hope to get there one day, we are not there yet. So 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. But right now, there have been no discussions to change that threshold that pillar. So 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. Fred, did I miss anything important there?
No, you're 100% correct, Sandeep.
And even with the potential silver stream from CSA -- the copper stream potentially from CSA, you were still fall under that number?
Yes. Look, what are we at, Fred, 200 and some odd $220 million, $225 million.
You’re right.
We would need to have quite a bit of success from a revenue-generating potential to be at €750 million. Still discount us, but it might take us a little while to get there.
I believe in you, Sandeep, you get there. And then my second question on taxes. I guess, last night, you recorded an expense -- income tax expense of $8.4 million. But in terms of your adjusted earnings, you adjusted out $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 every quarter. I just want to get a reminder.
Sure. Fred, I've exhausted my tax [indiscernible] -- if you want to pick that up. Thankfully, I mean essentially Cosmos, it has to do with deferred taxes, but why don't you go ahead, Fred.
Okay. Yes, exactly. We adjust the adjusted earnings for deferred taxes right now. So these are not cash taxes. We had approximately $900,000 of cash taxes paid in Q1, mostly on withholdings from foreign revenues. So 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?
Yes. And 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. But yes, that's the answer for now. I’m sorry.
Yes. Great. And 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 if I work it out correctly, your share price has gone up this year as you mentioned. I still work it out of 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 increases frequency of increases to dividend and whatnot?
Yes. 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. So we're always going to 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.
So we've got the strength to do any and all of that. Our balance sheet is pristine at the right time essentially almost zero net debt or a trivial amount of CAD15 million. Yes, we do have to fund that CSA transaction with plenty of room on our credit facility that we will use disproportionately for the foreseeable future of that and our cash flow to fund transactions.
So yes, we feel pretty good about it. The payout ratio had we done nothing would have been amongst the lowest that we've had in our history, really. And we didn't think, oh, that was fair. We want to continue to reward shareholders and their confidence in us and the dividend is one way to do that.
Great. And maybe one last question. 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?
And then number two, when it does happen, am I going to see like a big bump, are we going to catch up February also March. So there's going to 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. So it is -- the Silver Stream has an effective date of February 1st. So as long as the transaction closes, which we're highly confident it will that that's basically ticking towards us. So whenever the first quarter is the transaction closes, and hopefully, that's Q2, there will basically be five months of production in that quarter.
Great. Thanks again Sandeep and Fred and team, those are all the questions I had.
Thank you.
[Operator Instructions] And at this time, sir, we have no other phone questions.
Okay. So, let me manage this. I think there are at least a couple of questions on the webcast. I'm just keeping an eye on that. The first one, and I have to read these out, I believe, so bear with me. It's our first time doing this. Currently, some people just don't like the art of an old-fashioned phone call. But what are your stock repurchase plan?
So I guess this kind of falls 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 you 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.
So just because we increased our dividend this time around, it doesn't mean we will 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 going to be to get more exposure to Malartic and Mantos and Eagle and Windfall and Casino and Hermosa and go down the list. So 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.
So I believe that was the only question on the webcast. But if I'm lying someone please shut me down, and I'm happy to be told otherwise.
Thank you sir. We do have another question on the phone from John Tumazos at John Tumazos Very Independent Research. Please go ahead.
Good morning, Sandeep.
Good morning, John. How are you?
Well, well, so 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 the 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 more at Éléonore. It's getting kind of hard to figure out what cost 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, or what's your best way of managing construction cost, timing and uncertainty?
Yes. 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 – if there's inflation in the world, I have always said that it's worse in mining because mining is 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 -- those people issues are sticky ones, both in terms of availability of people, technical talent and also what it takes to retain them. So 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 Éléonore. I think they had a good phase of dealing with it. So 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. So we're seeing a lot of investment, time and energy and money into those assets to resolve those issues. So there 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 of things to your question. One is all that does to me as a person who tries to simplify things is it justifies elevated commodity prices for some time, that's good for us and 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. And so our assets are being fed with the money they need to move forward. It's not always a straight line and its not always as quickly as you'd like. But I think if you look at our portfolio, it's better set up that way than most. So good news there.
And yes, as we look out, we always manage what we consider time line risks. Those are our risks in the royalty sector. When there's extra cost, we don't suffer, at least not immediately or directly, but delays we do suffer from -- so yes, that doesn't -- hasn't changed our view, John. We've been pretty steadfast in the last few years that, yes, we will take on, and you've seen us take on some later-stage assets, when the returns and the asset quality is high. There's good asset. There's good room in our portfolio for an asset at any stage, but our larger dollars would be kept for either production or near-term or line of sight to production, so that hopefully, you're on the other side of that. You're never always on the other fully on the other side of that mechanism, but -- or the dynamic, but 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? And is it too much for the shareholders to hope that you get paid something for that 40% and the stock of the new owner or incremental royalty or cash, or how do you think that's going to settle out?
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, we worked 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 banks 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 in the last of the funding to take a project that circa 70% built completed and end up with a plus -- somewhere between 20,000 and 25,000 out of your mind on the other side.
So we work on that path. It's 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. And it's an important derisking event, one that -- it's one of those things I used to say if the light switches off that we are very intent on turning back on. With respect to your specific question about the equity, our primary objective is to see that stream reactivated, whether the equity has value on top of that, time will tell. That's the beauty of optionality in the gold sector. And with prices moving the way they are, we're not going to close that door. But 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. And at this time, Mr. Singh, we have no other questions. Please proceed.
Okay. And I'm figuring out my technology, and I can tell that there are no other questions on the webcast either. So thanks, everyone, for your time this morning, and maybe as a public service announcement. Just a reminder that Sunday is Mother's Day, and that's someone who has disappointed both their mother and their wife in past years. I plan on trying to break that streak. So hopefully, hopefully you're successful in doing the same. So 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. And at this time, we do ask that you please disconnect your lines.