Osisko Gold Royalties (TSX: OR; NYSE: OR) reported strong second quarter financials including $19.7 million in cash flow, a 40% increase over the same quarter last year. It also repaid $51.8 million on its revolving credit facility.
It also generated an 87% cash operating margin from royalty and stream interests, the highest in the metals and mining sector.
The company reported $137.8 million in revenue for 2018's second quarter, compared with $18.3 million the year before. However, substantial losses through costs of sales and depleting royalties meant the company earned a gross profit of $16.2 million, compared to $14.4 million the year before. After expenses, it recorded $511,000 in net earnings.
The company earned 20,506 gold equivalent oz. to keep it in-line with year-long guidance of up to 82,500 gold equivalent ounces. The company said it expects production to increase in 2019 and 2020.
In June the company acquired a $180 million silver stream on Falco Resources's (TSXV: FPC; US-OTC: FPRGF) development-stage Horne 5 project in Rouyn-Noranda. The company expects Horne 5 to provide it with 25,000 gold equivalent oz. per year over 15 years starting in 2023. A 2017 feasibility study by Falco estimated the project could produce 219,000 oz. gold per year.
Shares of Osisko are trading at $11.83 with a 52-week range of $11.79 to $17.58. The company has a $1.86 billion market capitalization. It has $188.6 million in cash.