John Tumazos: So this closure count the equity income offset for whatever OGC calculates?
Frédéric Ruel: It’s not going to be directly related to the impairment that they might book in their books.
Jason Attew: And you likely saw John that Osisko development put our press release as well putting a range of the impairment at Trixie between $80 and $120 million book on their books
John Tumazos: Of course. I guess a big quick question, Jason, how big picture would you like to change the structure orientation of the Osisko Gold Royalties? There’s the 20 wonderful near-term catalysts you’ve posted. It seems as though the stock market has a hard time understanding or digesting everything. There’s so much progress. And the market is confused, because most of the years you reported a loss, because of non-cash charges. We narrowed Royal Gold Osisko, Triple Flag usually reported profit every quarter. For example, would it be a good reorientation to dividend your Osisko development 40% to your shareholders directly, so that we get a positive value for it. We’re having a penalty because they take a write off last quarters.
Jason Attew: John, do appreciate the comments. And firstly, why I will like to stress the fact that our earnings and what you see with respect to these unmet needs, these are all non-cash charges. So that’s why we direct our investors to our adjusted earnings number. And I do take your comments that confusion does have costs here associated and we have made a number of changes both on the governance side and as well with respect to our strategy going forward, we will never be buying mining asset go forward. I can promise you that. We are going to be a pure-play royalty company that’s effectively invest in royalties streams, economic interests in good jurisdictions with good management. With respect to the question on the 40% — or 40% interest in a Osisko Development, as if we could do a dividend, the challenge as we see it with that because that will actually create them at a capital gain for our shareholders or at a cost for our shareholders to do that.
And so we don’t think, although, it’s something we are certainly considering and we’ll talk to our shareholders about that. But we don’t think by doing distribution or dividend of the emphasis Osisko Development would be well received given they’ll all receive a tax bill associated with a distribution. But open to have conversation with yourself, John and others on options as it relates to again ensuring that we create value on that investment.
John Tumazos : Thank you.
Operator: Your next question comes from Adrian Day with Adrian Day Management. Please go ahead.
Adrian Day : Yes. Good morning, and thank you. I had two questions if I may. First one, can you just talk a little bit about? Obviously, you mentioned that you’re pretty pure precious metals now, but you also mentioned you’ve got a lot of base metals coming on. What is your general thinking, general strategy on diversifying into other commodities? How broadly would you diversify?
Jason Attew: Really good question Adrian, right, myself and my team and our Board do actually have lots of conversations around diversification. The first statement that I make is, we absolutely want to stay precious focused for the near, medium and long-term. That said, as you just pointed out, our concentration around precious is one of the highest in the group. So we do have the ability to take other commodities and we have taken other commodities. I mean, mostly as we talked about copper coming from Hermosa and the copper stream at CSA will adjust to some degree, again, our concentration of precious. I really think it does depend on the opportunity set that we’re looking at. Clearly, if we can invest in a large either expansion or a new development of a polymetallic asset, for instance, that gives us both precious and copper.
I’ll just use copper as an example. And we certainly would entertain that. But the fact is, now that, again, our team is very much focused on per share metrics. We will be very much focused on value over volumes. So whatever is going to create value for our shareholders, we’d endeavor to look at. So we would look at base metals. We would look like copper. We have a very positive constructive view on the copper environment go forward around the energy transition and decarbonization themes that you’re very, very well aware of. Would we go into more esoteric commodities that don’t necessarily, you can’t necessarily quote them on a metals exchange. I’m thinking commodities like lithium or others, no, we don’t think that makes sense for our portfolio right now, given the opportunity that we’re except that we’re seeing.
But certainly on the base metal side, we do have exposure within 180 assets that we do have in the portfolio. But we also do think that there’s opportunities to essentially get some of those royalties and streams with some of the base metal assets as well and specifically around expansions or new developments that we see being very important to the energy transition sector.
Adrian Day : Okay. But you don’t have a particular sort of hard line in the sand where you wouldn’t go over x?
Jason Attew: We do not, Adrian, but it’s something certainly we evaluate as our portfolio shifts over time, but we do not have a specific target saying if we’re going to drop below, let’s pick the number 80%, we wouldn’t go and do the investment. We always look at value first and then look at the other factors such as you’re suggesting around commodity mix.
Adrian Day: Okay. Super. And then my second question, if I may, in answer to Cosmos Chiu’s very first question, I got the sense that there’s no particular urgency or it’s not a high priority to sell down more of your equity. Is that correct?
Jason Attew: That’s correct, Adrian. We’ve got, as I said, the two major ones in the portfolio are Cisco Development and Metals Acquisition Limited, and both of those companies, Metals Acquisition Limited, for example, they just did a big raise in Australia, as you’re certainly aware of. And with respect to Cisco Development, they’ve got a bunch of catalysts, not the least of which a construction permit this year, not the least of which they’re going to need to raise capital for their larger builds. So it doesn’t make sense. And arguably, it’d be counterproductive for us to suggest that we monetize it. You can think of the Cisco mining situation as a good analog. When we’re not providing really any value to our partner companies, after the Goldfields joint venture, we essentially just became a passive shareholder.
That’s when we’d be looking to monetize or divest our interest, and we obviously dealt directly with the Cisco mining when we did do that and thought it was the right thing to do at the time.
Adrian Day: Okay. Great. Thank you. Thank you. That helps.
Jason Attew: Thanks, Adrian.
Operator: Your next question comes from Ralph Profiti with Eight Capital. Please go ahead.
Ralph Profiti: Thanks, operator. Jason, most of my questions have been answered. How much time are you spending sort of planning on origination, and is there a market appetite for origination for new teals, and has there really been anything kind of new and unique that you’ve seen on the playing field since you started and sort of going around fostering these relationships?
Jason Attew: Morning, Ralph. Thank you for your question. So, yes, is certainly the answer that I would say. And again, for people on the line that don’t know my history or background, I spent 16 years in investment banking, so I do have some deep relationships. The team has some deep relationships, and our board has certainly some deep relationships across the sector. And so what I would say is there are certainly opportunities for us. And so the first phase of me coming on as a CEO is I thought it was very critically important that we meet all our owners and shareholders. And so for the last little while, Grant and myself have been on the road meeting with all our owners, getting feedback, talking about the strategy before.
The second phase, obviously, is around our deal flow and our deal origination, which, again, our team continues to do, and I will pick that up as well. I would say that just from what we’re seeing thematically is really around what I talked about before, Ralph, around there are a lot of management teams and or companies that are looking to grow their business. And growing their business around the energy transition theme that I talked about is something that we think will continue to be a theme for some time. So looking at companies that, obviously, want more copper, or have a project that’s just a few kilometers away from their headframe or the processing facilities that they’ll accelerate their studies for. We have our very entrepreneurial management teams out there that are looking to acquire assets and from the seniors.
So yes there’s whole origination piece. This group has been doing it for the last 10 years very, very well, and again as evidenced by the five transactions in 2023, record allocation in terms of capital deployment. I think the deployment was very, very smart and going to benefit all our owners go forward. So it certainly will continue, it’s not something that the company hasn’t done in the past, but we obviously do need to stay current as to trends, cost of capital for all of these parties and their aspirations around growing their portfolios to become as I said leaders in this energy transition piece that we’re going to see unfold over the next five to 20 years.
Ralph Profiti: Appreciate the answer. Thanks, Jason.
Operator: [Operator Instructions] Your next question comes from Brian MacArthur with Raymond James. Please go ahead.
Brian MacArthur: Good morning. Adrian’s — I’ll ask my main question, but maybe to just follow-up on the non-precious metal transactions. You mentioned lithium was something you weren’t interested in, but you got pretty interesting lithium royalty. Does it ever make sense to sell a royalty going forward? I mean, our philosophy here is you tend to get higher multiples for precious metals versus base metals, just with those two comments of you not focusing on lithium, what’s your view on Corvette?
Frédéric Ruel: Well, thank you Brian. I appreciate the question, good morning. Corvette is a very good asset in our portfolio. And so we are very, very fortunate to be a benefactor of holding the 2% of the NSR there. We also have NSRs and any other metals that are found in that region as well. Whether it was conveying to Adrian is I think we have to be very focused as a corporate development team and origination team on what we’re good at what we know. And so we know and we want and are focused on precious metals opportunities. As I talked about before, we really need to stay in that focus. So looking at new lithium projects or new projects in that commodity it would depend if it’s a really good management team that we’ve got a history for, of course, we potentially look at it, but I don’t think it’s something we consider first of all our core competency or something that we would consider doing outside of one-off exceptions.
With respect to potentially trading in a lithium, or any of the assets that we have there are not very specific either base or precious, of course, we would consider that what we will certainly do and as I said in my presentations done a portfolio review, if we can actually create value for shareholders, and for example the other commodities that we have in our portfolio, if we see something in other assets, may be precious focused in other portfolios that we did come to a deal with SIM swapping. Yes, that would absolutely make sense for us. It’s I would say, it’s a lot easier to, to suggest around dramatically than them and conceptually then around the real execution around these transactions, because there was a lot of things obviously involved.
You’ve got tax. You’ve got new considerations around investments. But the broad answer to your question we absolutely will consider, looking at our portfolio and it does it makes sense and another party’s portfolio in Canada. And then, the second question is can we actually realize good value for them, either by trading or monetizing.
Brian McArthur: Great. Thanks very much for your clarification.
Jason Attew: Thanks Ralph. Sorry Brian.
Operator: I will now turn the conference back over to Jason for questions on the webcast.
Jason Attew: Thank you, Operator. So that’s the first question we have is expand on the rationale behind the recent balance sheet actions and comments on your capital allocation going forward? I believe that we’ve answered that question through the Q&A period. So thank you. Next question from Kerry Smith at Haywood. Jason, do you plan to retire any more debt in 2024? Again, I think we’ve also addressed that. We as you saw in Q1 or sorry Q1 to-date year-to-date we have retired and paid down another $30 million on our revolver facility. We will continue to do that, unless and until we see transactions that we want to do that and essentially move of the against the revolving credit facility. So we always want to have some capacity and flexibility around that.
So but so if we don’t do transactions, yes, we will continue to retire and/or pay down our facility, Kerry, thank you for that question. And question from Eric [indiscernible]. Congrats on the nomination and to the whole team, what has been the total ounces produced at Eleanor since started production and around two million ounces of what I’m getting from the team, is 2.2 on Gold bsallpark and is there an expectation to reach 3.5% NSR royalty eventually? I’ll turn that question to Iain, since the 3.5% also I believe and commodity length or commodity price based. But to answer the question yes about two million ounces has been produced at Eleanor. And so I’ll ask him to comment on the 3.5% NSR.
Iain Farmer: Yes. The two million ounces in produce were at the top end of the variable royalty rate range for that royalty. And in terms of getting the next bump up on the total production rate is probably a little bit too far in the future to say that that’s going to happen at this time.
Jason Attew: Thank you for your question, Eric. That’s all the questions, operator we have from the webcast. So thank you very much everybody for attending kind of the meeting for the year end Osisko Gold Royalties results presentation. As I said, it’s very, very busy day, especially for the analysts that cover. So very much appreciate your attention and the thoughtful questions this morning. And so have a very good week. And we’re always available. Our team and myself, are all available, if you’d like to have a conversation on any of our business and our strategy go forward. So thank you very much for attending this morning.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating. And ask that you please disconnect your line.
