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.
Read what other experts are saying about:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Pretium Resources. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own shares of Osisko Gold Royalties and Pretium Resources, companies mentioned in this article.
Disclosures from Raymond James, Osisko Gold Royalties Ltd., December 19, 2018
Analyst Compensation: Equity Research analysts and associates at Raymond James are compensated on a salary and bonus system. Several factors enter into the compensation determination for an analyst, including i) research quality and overall productivity, including success in rating stocks on an absolute basis and relative to the local exchange composite index and/or sector index, ii) recognition from institutional investors, iii) support effectiveness to the institutional and retail sales forces and traders, iv) commissions generated in stocks under coverage that are attributable to the analyst's efforts, v) net revenues of the overall Equity Capital Markets Group, and vi) compensation levels for analysts at competing investment dealers.
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.
RAYMOND JAMES RELATIONSHIP DISCLOSURES
Certain affiliates of the RJ Group expect to receive or intend to seek compensation for investment banking services from all companies under research coverage within the next three months.
The person(s) responsible for the production of this communication declare(s) that, as far as they are aware, there are no relationships or circumstances (including conflicts of interest) that may in any way impair the objectivity of this recommendation directly or indirectly relates, this has been declared below. This statement applies equally to any persons closely associated with him or her. However, it is possible that persons making communications in relation to a financial instrument may have a holding in that instrument and this will be disclosed. As stated, Raymond James Canada (RJL) has controls in place to manage such risks.
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.