Tuesday, BMO Capital Markets maintained its Market Perform rating on shares of Osisko Gold Royalties Ltd (NYSE:OR:CN) (NYSE:OR) with a consistent price target of Cdn$27.00. The firm's outlook remains unchanged as Osisko continues to engage in corporate development and invest in new opportunities.
Osisko Gold Royalties has recently been noted for its active involvement in corporate development, focusing on capital deployment into new investment ventures. One such venture is the Dalgaranga gold project, which is expected to benefit from existing infrastructure. The project is anticipated to commence production from an underground operation within the next two years and is projected to have a mine life of over 12 years.
The company's involvement with the Dalgaranga gold project and its strategy of investing in new opportunities have been factored into BMO Capital Markets' valuation. The firm views the transaction, including the partial royalty buyback, as having a neutral impact on Osisko's net asset value (NAV) estimate.
The maintained Market Perform rating indicates that BMO Capital Markets does not foresee significant changes in the stock's performance relative to the broader market in the near term. The Cdn$27.00 price target suggests that the firm believes the stock is valued appropriately based on their assessment.
Osisko Gold Royalties' strategy of investing in projects like Dalgaranga is part of its broader approach to growth and value creation. The company's focus on such developments is expected to play a role in its operational and financial outcomes in the forthcoming years.
In other recent news, Osisko Gold Royalties Ltd announced a significant deal to acquire a 1.8% gross revenue royalty on the Dalgaranga Gold project, operated by Spartan Resources Limited in Western Australia. The agreement, valued at US$50 million, also includes a 1.35% royalty on additional exploration licenses in the region, pending approval from Australia's Foreign Investment Review Board. The Dalgaranga project, which has been subject to recent high-grade discoveries, is preparing for a production restart within the next two years.
Osisko Gold Royalties also reported strong earnings for the first half of 2024, with 20,068 gold equivalent ounces (GEOs) earned in the second quarter. The company's revenue for this period reached $64.8 million, and it ended the quarter with $65.7 million in cash. Despite operational challenges at Victoria Gold's Eagle Mine, Osisko remains on track to meet its annual guidance.
On the analyst front, the suspension of operations at Victoria Gold's Eagle Mine led to an adjusted GEO guidance of 77,000 to 83,000 for 2024. However, Osisko's management expressed confidence in the company's financial flexibility and the prospects of returning capital to shareholders through dividends and buybacks. These developments are part of the recent news surrounding Osisko Gold Royalties.
InvestingPro Insights
To complement BMO Capital Markets' analysis of Osisko Gold Royalties Ltd (OR), recent data from InvestingPro provides additional context for investors. The company's market capitalization stands at $3.45 billion USD, reflecting its significant presence in the gold royalty sector.
Osisko's financial metrics reveal interesting dynamics. The company has demonstrated strong revenue growth, with a 7.29% increase over the last twelve months as of Q2 2024, aligning with its strategy of active investment in new opportunities like the Dalgaranga gold project. Moreover, Osisko boasts an impressive gross profit margin of 95.09% for the same period, underscoring the efficiency of its royalty and streaming business model.
InvestingPro Tips highlight that Osisko has raised its dividend for 3 consecutive years, which may appeal to income-focused investors. Moreover, the company's stock has shown a strong return over the last year, with a price total return of 59.37% as of the latest data. This performance could be attributed to the market's positive reception of Osisko's corporate development activities and strategic investments.
For investors seeking a deeper understanding of Osisko Gold Royalties, InvestingPro offers 11 additional tips that could provide valuable insights into the company's financial health and market position.
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