Executive Summary / Key Takeaways

• OR Royalties Inc. (OR) is a leading precious metals royalty and streaming company, distinguished by its royalty-heavy portfolio and peer-leading cash margins, which stood at 97.1% in Q1 2025 and 96.5% for the full year 2024. This model captures significant value per gold equivalent ounce (GEO) delivered.
• The company is on track to meet its 2025 GEO delivery guidance of 80,000 to 88,000 ounces, with a stronger second half anticipated due to improved performance at Canadian Malartic and increasing silver grades at Mantos Blancos.
• OR Royalties maintains a robust balance sheet, achieving a net cash position in Q2 2025 for the first time in several years, and boasts over $900 million in potential available liquidity to pursue accretive transactions.
• Strategic growth initiatives include the acquisition of a silver stream on the South Railroad project and the accelerated development of Dalgaranga, alongside significant optionality from projects like Odyssey's second shaft, Cariboo, and Spring Valley, which are expected to drive substantial future GEO growth.
• The company's unwavering focus on Tier 1 mining jurisdictions (Canada, U.S., Australia) provides unmatched geopolitical stability and downside protection, a key differentiator in the competitive royalty and streaming sector.

The Bedrock of Value: OR Royalties' Strategic Foundation

OR Royalties Inc., formerly Osisko Gold Royalties Ltd, has carved out a distinctive position in the global mining finance landscape since its founding in 2014, operating as a pure-play royalty and streaming company. Headquartered in Montreal, Canada, the company's core business revolves around acquiring and managing royalties, streams, and other interests in precious metals, with a strategic, albeit smaller, allocation to base metals like copper. This asset-light model provides investors with diversified exposure to commodity prices and exploration upside, crucially without the direct operating costs or capital expenditures associated with traditional mining.

A cornerstone of OR Royalties' strategy is its unwavering commitment to Tier 1 mining jurisdictions, encompassing Canada, the United States, and Australia. This focus significantly de-risks its portfolio from geopolitical strife, a critical differentiator in an often volatile global mining sector. The company's leadership in this regard is evident, as it is the "unequivocal leader when it comes to both NAV and GEOs earned from what we define as Tier 1 mining jurisdictions". This strategic emphasis was further reinforced in 2024, with OR Royalties being the only company among its peers to increase its net asset value exposure in these preferred regions, primarily through the Dalgaranga acquisition and the Gibraltar amendment.

The company's business model is further strengthened by its "royalty-heavy portfolio," which consistently delivers "peer-leading cash margins". For the full year 2024, the cash margin stood at an impressive 96.5%, rising to 97.1% in Q1 2025. This high margin means that approximately $0.97 of every dollar of revenue generated translates into cash for the company and its shareholders, offering both transparent leverage to commodity prices and unmatched downside protection. This efficiency is a direct result of its non-operating model, which avoids the significant operational expenses and capital outlays faced by direct mining companies.

Competitive Landscape: A Differentiated Approach

In the competitive realm of precious metals royalties and streaming, OR Royalties stands alongside formidable peers such as Franco-Nevada Corporation (FNV), Wheaton Precious Metals Corp. (WPM), and Royal Gold, Inc. (RGLD). While these larger entities boast broader global portfolios and often greater diversification, OR Royalties distinguishes itself through its concentrated focus on Tier 1 jurisdictions and its agility in targeted acquisitions.

Franco-Nevada, a leader in the sector, is known for its conservative financial approach and extensive global asset base. While Franco-Nevada's diversification offers resilience against regional disruptions, OR Royalties' specialized focus on Canadian assets, such as the Canadian Malartic complex, provides a deeper regional expertise and potentially stronger local relationships. This specialization allows OR to pursue niche opportunities with potentially higher efficiency and execution in its core geographies.

Wheaton Precious Metals, primarily a streaming company, focuses on long-term agreements for predictable cash flows. OR Royalties' blend of royalties and streams, particularly its emphasis on exploration and acquisition in specific regions, offers a different value proposition. While Wheaton's streaming model can provide faster scalability, OR's approach allows for more integrated engagement within local mining ecosystems, potentially translating to stronger execution in Canadian projects.

Royal Gold, another significant royalty player, builds its portfolio on high-value royalty interests. OR Royalties' strategy, with its strong emphasis on Tier 1 assets and a disciplined capital allocation framework, aims to achieve superior returns by identifying and securing high-quality assets that align with its strict investment criteria. While Royal Gold's broader portfolio might offer greater cash flow generation, OR's focused strategy seeks to maximize value from a more concentrated, high-quality asset base.

Quantitatively, OR Royalties' TTM Gross Profit Margin of 86.10% and Operating Profit Margin of 68.18% demonstrate strong operational efficiency, comparable to its peers in the asset-light royalty model. Its EBITDA Margin of 76.31% further underscores its ability to convert revenues into strong earnings before non-cash charges. The company's low Debt/Equity Ratio of 0.03 highlights its robust financial health, providing significant flexibility for future growth initiatives.

Operational Excellence and Technological Edge

While OR Royalties does not directly operate mines, its investment thesis is deeply intertwined with the operational performance and technological advancements of its operating partners. The company's "technology" in this context is its sophisticated due diligence process, its ability to identify and secure interests in projects that leverage advanced mining techniques, and its strategic partnerships that drive operational efficiencies and resource expansion.

A prime example is the Canadian Malartic Complex, OR Royalties' cornerstone asset, where it holds a 5% Net Smelter Return (NSR) royalty. Agnico Eagle , the operator, consistently implements advanced mining techniques. In Q2 2025, Canadian Malartic saw a significant quarter-over-quarter uptick in gold production, partly due to in-pit tailings disposal adjustments being completed faster than anticipated. The Odyssey underground project within the complex achieved a quarterly record of approximately 26,600 ounces of gold production in Q2 2025, driven by higher grades and an ore mining rate of approximately 3,970 tonnes per day, exceeding the target of 3,500 tonnes per day. This enhanced productivity is attributed to the ramp-up of the service hoist to its design capacity of 3,500 tonnes per day and the increased use of remote-operated and automated equipment, demonstrating a tangible benefit of technological integration.

Furthermore, Agnico Eagle is evaluating a 70-meter extension of Shaft #1 and the potential development of a second shaft at Odyssey to enhance operational efficiency and unlock the vast East Gouldie deposit. The "sheer amount of gold discovered to date at Odyssey Underground and more specifically East Gouldie... is nothing short of staggering," with exploration continuing to expand the deposit at depth and to the east. The discovery of the subparallel Eclipse zone, fully covered by OR Royalties' 5% NSR, further underscores the potential for significant resource additions. These operational and exploration successes, driven by advanced drilling and mining technologies, directly translate into long-term GEO growth for OR Royalties.

Financial Performance: A Trajectory of Strength

OR Royalties has demonstrated a consistent track record of financial strength and disciplined capital management. For the full year 2024, the company achieved record annual revenues of $191.2 million, driven by robust precious metals prices. Net earnings for 2024 were $0.09 per share, a substantial improvement over 2023, which was impacted by non-cash impairment charges. Crucially, 2024 marked the seventh consecutive year of increased cash flow per share, with annual adjusted earnings reaching $0.52 per common share.

The positive momentum continued into 2025. In Q1 2025, OR Royalties earned 19,014 GEOs and reported operating cash flows of $46.1 million, maintaining its 97.1% cash margin. Net earnings were $0.14 per basic common share, with cash flow per share at $0.25 and adjusted earnings at $0.16 per basic common share.

Building on this, Q2 2025 saw the company earn 19,700 GEOs, a modest step-up from Q1, keeping it on track for its full-year guidance. Quarterly revenues reached $60.4 million, and higher gold prices translated to record cash flows from operating activities for both the second quarter and the first six months of the year. Cash flow per share improved to $0.27, and adjusted earnings rose to $0.18 per common share in Q2 2025.

The company's balance sheet reflects this robust performance. OR Royalties ended Q2 2025 with $49.6 million in cash and, for the first time in several years, achieved a net cash position as of June 30, 2025, after continuing to pay down its revolving credit facility. Total debt stood at just under $36 million at quarter-end, and with an additional $21 million paid down subsequent to the quarter, the balance sheet has further strengthened. The company boasts over $900 million in potential available liquidity, providing significant financial capacity and flexibility for future growth initiatives. This strong financial position allows OR Royalties to adhere to its "time-tested strategy of disciplined capital allocation in the pursuit of high-quality accretive streams and royalties".

Strategic Growth and Future Outlook

OR Royalties is poised for continued growth, with a clear strategy for expanding its portfolio and enhancing shareholder value. The company's full-year 2025 GEO delivery guidance is set at 80,000 to 88,000 gold equivalent ounces, with a stronger second half anticipated. This pickup is expected from Canadian Malartic's continued strong performance, an anticipated increase in silver grades at Mantos Blancos, and the ongoing ramp-ups at Tocantinzinho and Namdini.

The five-year outlook to 2029, while adjusted from previous forecasts due to the exclusion of the Eagle Mine, includes significant contributions from new development assets such as Dalgaranga, Windfall, Hermosa, and Marimaca. Notably, all projected growth out to 2029 is "completely bought and paid for," with "absolutely zero contingent capital associated" from OR Royalties.

Key catalysts are expected to drive this growth:

• Dalgaranga: Following Ramelius Resources (RMS.AX)' acquisition of Spartan Resources (SPR.AX), an integrated feasibility study and maiden mineral reserve are expected by the end of 2025. Underground development is already underway, with high-grade ore potentially processed through Ramelius' Checkers mill prior to the end of 2025, a full year ahead of original anticipation. Dalgaranga is expected to contribute "well over 2,500 gold equivalent ounces annually" to OR Royalties.
• Canadian Malartic (Odyssey Second Shaft): Agnico Eagle (AEM) is evaluating a second shaft at Odyssey, a development OR Royalties believes is a matter of "when and not an if". This could significantly boost production, with Agnico management referencing a scenario of 30,000 tonnes per day and 750,000 to 800,000 ounces of gold per annum from the single ore body. While meaningful disclosure is not expected until late 2026 or early 2027, this represents a substantial long-term growth driver.
• Optionality Assets: Projects like Cariboo and Spring Valley, currently excluded from the five-year outlook, could collectively add approximately 16,000 annual GEOs once operational. Cariboo has secured significant project financing, making its inclusion in future outlooks "more likely than not". Spring Valley recently received a positive record of decision, making it "effectively shovel-ready".
• Mantos Blancos: While the Phase 2 feasibility study is now scheduled for 2026, an updated technical report in Q4 2025 is expected to provide more clarity on the expansion to 27,000-30,000 tonnes per day throughput.

The company's corporate development team remains highly active, pursuing "new meaningful transactions" with a "sweet spot" for deals between $50 million and $500 million. OR Royalties' disciplined capital allocation strategy ensures that it will only pursue high-quality, accretive opportunities, leveraging its strong balance sheet to "pick our spots and wait for the right deals".

Risks and Shareholder Returns

Despite its strengths, OR Royalties faces inherent risks common to the mining sector. Commodity price volatility, particularly the gold/silver ratio, can impact GEOs earned, as demonstrated by the 1,200 GEOs not realized in H1 2025 due to a higher-than-budgeted ratio. Operational challenges at partner mines, though mitigated by diversification and Tier 1 focus, remain a factor. The unfortunate technical failure and subsequent sale process of the Eagle Mine serve as a stark reminder of these risks. However, the company's focus on Tier 1 jurisdictions and its rigorous due diligence process, which includes assessing social license and operator track record, aim to minimize such exposures.

OR Royalties is committed to returning capital to shareholders, having declared and paid its 43rd consecutive quarterly dividend of $0.055 per share in Q2 2025. This progressive dividend policy reflects management's confidence in the consistency, predictability, and anticipated growth of its cash flows. Share buybacks are also considered an opportunistic tool to enhance per-share metrics when market dislocations occur.

Conclusion

OR Royalties Inc. presents a compelling investment thesis, grounded in its robust royalty and streaming business model, strategic focus on Tier 1 mining jurisdictions, and a track record of peer-leading cash margins. The company's disciplined capital allocation, coupled with a strong balance sheet and a deep pipeline of organic and optionality growth projects, positions it for sustained value creation. While the inherent risks of the mining sector persist, OR Royalties' strategic differentiators, including its operational efficiencies driven by partner technologies and its commitment to shareholder returns, underscore its potential for long-term outperformance. Investors seeking exposure to precious metals with a focus on quality, stability, and growth should closely monitor OR Royalties as it continues to unearth value in a dynamic market.