Gold Royalty Corp. Q1 FY2024 Earnings Call

I'm Joan C Jobin, media host. Welcome to the Gold Royalty Quarterly Townhall Forum. With us this morning is the Gold Royalty team, led by Chairman and CEO, David Garofalo, who will introduce the team and walk you through the highlights of the most recent quarterly results. David, the stage is yours.

Well, good morning, everybody, and I'm delighted to be joined today by our CFO, Andrew Gubbels, our Director of Corporate Development and Investor Relations, Peter Behncke. We'll take you through our financial results and the outcomes of our Royalty portfolio and an update on our Royalty portfolio during the course of the presentation today. But look, I thought I'd start today talking about the gold price, and it's been an auspicious start to the year with the gold price up about 14% to 15%. And if there's one word to describe the dynamic, it would be China. And we've seen a significant amount of buying both at the central bank level and also at the individual level in China. And really, that's a microcosm of what's happening globally in terms of currency relative to each other. The gold price has performed well and every major currency in the world has achieved all-time nominal highs, but still well off where the real all-time high for the gold price was back in the early 1980s. When you inflation-adjust the peak gold price from the last big inflation cycle in the late '70s and early '80s to 2024, the gold price is still a good 20% to 30% below the all-time highs. But I would argue that we're in an environment now where the gold price is poised to significantly outperform even those peaks on a real basis given the debt dynamic we're observing globally with global debt-to-GDP still at an alarming 350% compared to only 100% in the last big inflation cycle in the 1970s and early 1980s. So there's very limited latitude for central banks to increase interest rates dramatically to deal with what's really double-digit inflation that we're experiencing in the economy, not the 3% or 4% headline figures that frankly are economic fiction. Those exclude all of the important things that we need like food, fuel, and shelter. As mortgage rates reset across the industrialized world, particularly in North America, we're going to see a dramatic increase in monthly mortgage payments, and that is inflation. That erodes the purchasing power of individuals, and that will continue to drive capital into gold relative to other major currencies that are yielding negative on a real basis. Sovereign debt is diminishing your savings. So if you're buying U.S. treasuries, if you're buying Canadian treasuries, Euro, Japanese, you're not seeing your savings increase even with normal rates at relatively high levels with inflation diminishing the purchasing power of our currency. We're starting to observe savings being depleted while gold is a tremendous preserver of capital in that type of environment. Gold serves as an accurate barometer of what's really occurring in inflation on a real basis. And that's why gold has been a one-way trade for over 50 years, while the U.S. dollar has seen a decline of 96% in its purchasing power over that 50-year era, since the U.S. government abandoned the gold standard. We've watched the gold price go from $35 an ounce on a nominal basis to almost $2,400 an ounce today. Gold is the currency you can't print. The U.S. dollar and every other major currency has seen prolific printing and the erosion of the purchasing power of those currencies over time. But what we're not seeing is a massive response in gold valuations on the equity side, particularly among the producer universe. The juniors have had very limited access to capital for a long time. They're still not experiencing that incremental dollar, that marginal dollar of investment allocated from the general equity markets yet; there hasn't been a response. But even among the largest producers in the space, we've seen a muted reaction to the gold price. In fact, if you look at the bellwether stocks, whether it's Newmont or Barrick, their valuations actually reflect share prices that are below where they were in the 1990s when the gold price was 1/10 of what it is today. They're facing the overhang of cost inflation, which we're able to avoid in the Royalty model. We're entirely insulated from that due to the top-line exposure we have within our portfolio. Moreover, this is an industry that's faced decreasing reserves over a long period of time. As a result, we've observed the cannibalization of companies in the producer universe. Barrick and Newmont, the largest producers in the space have experienced no increase in their production of reserves over the last 25 to 30 years, but they've seen a significant increase in their share count because they've had to absorb other companies to maintain a suboptimal production rate. So that serves as a microcosm of what's going on among the producers, among the equities in the space. We haven't seen that kind of leverage that investors are seeking in the equities because of the overhang of cost inflation and the industry's ongoing shrinkage in its reserve base, particularly given the lack of access to capital among the explorers, the juniors that truly drive the exploration focus in the sector. That lack of exploration success has resulted in a declining pie and a shrinking pie in the producer universe. It's been a good start to the year for us from a share price performance perspective; we're up nearly 30%. We've provided leverage to the gold price. You'll remember, the gold price has risen about 14% to 15% this year. We've increased by about 30%. We believe there's a significant re-rate opportunity when you look at the relative valuations, particularly given our growth profile, which I'll discuss in more detail shortly; Andrew and Peter will get into that a bit more throughout the presentation. However, looking at the quality of our portfolio, we have over 240 royalties, and our royalties encompass 3 of the 5 largest producing gold mines in North America. We possess a quality proposition; we enjoy long reserve lives and a lengthy profile of revenue growth right through the end of the decade. We exhibit peer-leading revenue growth, which we believe will continue to drive a re-rate in our story and allow strong relative performance against our peers, given the quality of our portfolio and its favorable location. The majority of our royalties exist in the best jurisdictions globally from a mineral potential standpoint, with low political risk and regulatory risks. And I must emphasize that revenue growth is no longer theoretical. We've discussed that revenue growth since our inception 3 years ago; it's starting to materialize now. We witnessed more than a doubling of our revenue in the first quarter of this year, driven by the acquisition of Borborema and Cosman late last year, reaping the benefits in the first full year with those quality assets in quality jurisdictions, providing meaningful leverage to gold and copper prices and performance improvement in Canadian Malartic, where we have some royalty exposure in the open-pit sector, and we're beginning to see some catch-up from the underperformance last year in the Barnat pit. We're also starting to see underground production from Canadian Malartic, which grants us substantially more royalty coverage than we have in the open pit. So that's going to be a significant growth driver moving forward. So again, we more than doubled our revenue in Q1 and exhibit peer-leading growth through the end of the decade, with a consensus projecting about 60% compounded annual growth till the end of the decade. This is mainly driven by those large cap operations that represent 3 of the 5 largest producing gold mines in North America, and also Borborema and Cosman as meaningful sources of revenue growth moving forward, as we've just folded those into the portfolio recently. Q1 marked a fantastic start to the year with total revenue of $4.2 million when you take into account land agreement proceeds, royalty revenues, etc., achieving almost 40% of our full year guidance in the first quarter. This not only places us in a great position to meet our revenue guidance of total revenue between $10 million and $11.2 million for the full year but is without the benefit of royalty revenue from the newly commissioned Cote mine, which started production on March 31 this year and is expected to represent a significant portion of royalty revenue growth in the second half of this year as they aim to achieve commercial production in the third quarter. Together with a 10% decrease in our operating costs, where Andrew has performed exceptionally since taking over as CFO a little over a year ago, driving costs out of the system during our post-merger integration efforts. We absorbed 3 companies in 2021 and continue finding efficiencies as we rationalize all the holding companies we operate within the portfolio and maintain a focus on the core of our business. Thus, we keep reducing our operating costs while our revenues continue to climb. That's an ideal formula for generating free cash flow for the first time in our 3-year history in Q1. We expect free cash flow generation going forward, marking a remarkable achievement for a company that has only existed for 3 years. So from a concept effectively on the back of a napkin in the café where Amir Ninan and I discussed starting this company, we've moved from a standing start with no revenue in our IPO to having peer-leading revenue growth, free cash flow generation, and the prospect of positive earnings going forward. We have also been busy on the strategic side. As mentioned, we acquired 2 cash-flowing royalties last year in Borborema and Cosman. A strategic partnership with Taurus has been instrumental in funding that acquisition through a convertible debenture along with Queen's Road, another significant strategic shareholder in the company. Taurus has established a dedicated royalty fund and has chosen to work with us over every other royalty company worldwide to forge a strategic exclusive alliance for co-investing in new royalty opportunities above $30 million in value. Therefore, we can target larger deals because we have a partner alongside us to co-invest in these royalty opportunities. Moreover, we can share due diligence costs on major royalty and streaming opportunities as well. So it assists in continuing to rationalize our operating costs and provide us a source of meaningful capital for investment and new opportunities going forward. With that, I'd love to hand it over to Andrew to delve into our financial performance a bit more in-depth.

Thanks, David. As you would have observed in our reported results, it was a very solid quarter. Our record revenue, which you see here on a reported basis, was higher in the first quarter of 2024, primarily owing to stronger production from areas of the Canadian Malartic mine covered by our royalty. Notably, compared to 2023 in the first quarter, we incorporated the first full quarter of reproduction payments from Borborema as well as the recently acquired Cosman royalty. This underscores our acquisition strategy yielding top-line benefits for the first quarter of this year. When assessing total revenue, land agreement proceeds, and interest, which is the figure we prefer, as it incorporates all our cash inflow sources, we can report a number of $4.2 million, achieving a 112% increase from Q1 2023. This figures stemmed from contributions made by Canadian Malartic, Borborema, and Cosman, alongside larger scheduled payments fully received from certain operators within the company's royalty generation business in Nevada. Thus, that sector paid real dividends in the first quarter of 2024. Again, cash operating expenses were 10% lower in the first quarter compared to the same quarter last year. As a company, we continue to thrive on disciplined cost management and anticipate steady operating costs going forward throughout the remainder of the year. As a result of higher revenue coupled with moderated costs in the quarter, Gold Royalty reported its first positive cash flow from operations of $0.3 million. This excludes $1.1 million of land agreement proceeds credited against the mineral properties in our reported numbers. If we used total revenue, land agreement proceeds, and interest instead of reported revenue, our operating cash flows would be closer to $1.4 million, illustrating a very healthy operating performance in the quarter. We have frequently stated that 2024 will be a transitional year for the company, where we transition to a cash flow generator. This first quarter truly illustrates the considerable progress we've made over prior quarters and sets us up for a robust fiscal year in 2024. What hasn't changed is the company’s strong revenue growth trajectory beyond the current calendar year. In fact, the profile you see here, which you've witnessed before, has improved significantly since adding assets like Borborema and Cosman in the near to medium term, particularly with core assets such as Cote, first gold poured at the end of Q1 of this quarter, and genuinely coming into fruition through 2025, '26, and '27 within this cash flow profile. We continue to boast the best revenue growth profile in the sector over the next 5 years; that message remains unchanged, supported by average broker estimates. The long-term gold price, if you recall, is around $1,900 an ounce, suggesting potential upside for this growth profile if positive gold prices persist. Additionally, remember that revenues within our pipeline are driven by large fully funded projects being developed by renowned operators such as Agnico Eagle, Barrick, IAMGOLD, and Cote Lake, alongside well-capitalized partners like Ora Minerals and the Borborema project. Hence, we are very comfortable and confident that this is an achievable and low-risk revenue growth profile that we will see materialize as we advance year-on-year. With that, I think it's a perfect time to pass over to Peter, who can provide an update on the company's asset pipeline moving forward.

Perfect. Well, thanks, Andrew. So building on what Andrew stated regarding our peer-leading revenue growth, it's clear that much of this is driven by the cornerstone assets that David mentioned earlier. Odyssey, the underground extension of the Canadian Malartic mine, will become Canada's largest underground gold mine and represents our cornerstone asset. While it will provide moderate revenue over the next several years, substantial contributions are anticipated to kick in toward 2027 and 2028 when this complex transitions to full underground operation. I will also discuss some recent Q1 updates from Agnico Eagle regarding that asset later. From a broad perspective, you can see on this slide that the main aspects of our portfolio remain unchanged. We have one of the strongest jurisdictional profiles of any royalty and streaming company, with over 80% of the business in Quebec, Ontario, and Nevada. We partner with premier operators in the sector—Newmont, Barrick, Agnico Eagle—driving forward our cornerstone assets and offering exceptional optionality across the portfolio. Over the past 3 years, we are approaching nearly 2 million meters of drilling, which brings significant optionality at no cost to Gold Royalty, as is typical for royalty and streaming companies. Looking forward to 2024, we are still compiling filing figures. Despite a much more challenging equity market for juniors and developers, we observe hundreds of thousands of meters being drilled across the portfolio this year. In reference to the green assets highlighted on our pipeline slide, you will see Cote Gold, Orbera, and Cozamin, all acquisitions made over the past couple of years, represent a meaningful portion of our revenue for 2024. The near-term revenue is predominantly propelled by those acquisitions completed in 2022 and 2023. Finally, from a portfolio viewpoint, I want to reiterate that we have over 90% gold exposure across our portfolio. Although we have picked up some copper exposure last year with the Cozamin Royalty, we maintain a concentrated focus on precious metals for our investors, which distinguishes us from some royalty and streaming peers. Digging into some updates across the portfolio in Q1, as mentioned, the Odyssey mine continues to outperform and exceed expectations. Ramp development has advanced ahead of schedule by Agnico Eagle. With changes in shaft development plans, they now anticipate utilizing the shaft 6 months earlier than initially projected. The longer-term outlook for the Odyssey mine remains relatively stable. The key years are 2027 and 2028, when this asset is projected to significantly impact our gold royalties revenue profile. Moreover, it's encouraging to observe Agnico advancing this project on time and on track. They've also been more aggressive with marketing potential upsides at the Odyssey underground mine. Recently, our Persico royalties highlight the potential for a second or even a third shaft to be sunk at the Odyssey mine, which would considerably enhance production capacity. Currently, less than one-third of the processing plant's capacity is being utilized in the current mine plan, so the opportunity to fill that mill and elevate annual production well beyond the currently envisioned 500,000 ounces per year excites us, especially given our 3% NSR over the property. As for Cote, David mentioned that first gold pour on March 31 was fantastic news, and they are on track to attain commercial production in Q3. They recently released their Q1 results and confirmed that guidance for later this year. Their annual production guidance is projected at 220,000 to 290,000 ounces per year in 2024, and we expect our 0.75% NSR to benefit in the second half of the year. At the Ren project, while it's a relatively small deposit within Barrick's extensive portfolio, they've continued to advance Ren at the Carlin complex. Recent news results, albeit less definitive, have strengthened our confidence that they will deliver a prefeasibility study in early 2026, with production expected shortly after that, as Ren is integrated into the overall Carlin complex mine plan. As it currently stands, the Ren deposit possesses an inferred mineral resource of around 1.6 million ounces at close to 7 grams per tonne grade, with Barrick suggesting significant exploration upside to substantially expand that resource over the following years preceding production. Our latest acquisition, the Borborema investment, includes our 2% NSR, which has been generating pre-production payments, as well as our gold-linked royalty convertible loan with Ora Minerals, which has just completed its first quarter of revenue for us—250 gold equivalent ounces from pre-production payments in Q1, followed by 110 ounces through the coupons on the gold-linked loan. We anticipate around $3 million in revenue from these pre-production payments and coupon payments in 2024, prior to the assets even commencing production. Regarding Borborema, it's crucial to note that they remain on track for production in early 2025, with construction currently 25% complete as of March 31, 2024, and Ora has a proven track record of delivering mines on time and budget, recently completing the Vales mine in Brazil. This collaboration is a key reason for our partnership and investment in Borborema. For Cozamin, we experienced a positive start to the year; higher grades were achieved by Capstone. This asset has consistently delivered exploration success and noteworthy production results since 2006, and Q1 2024 was no exception. The acquisition completed in the latter part of last year is expected to continue its solid performance in terms of production and exploration upside, extending reserve life beyond 2030. Lastly, for Granite Creek, we acquired the royalty from Nevada Gold Mines at the end of 2022. I80 Gold recently completed a bought deal financing, thereby addressing some balance sheet risk associated with the company and outlining their plans for the Granite Creek mine for the remainder of 2024, which includes expansion drilling, continued underground development, test mining, and the publication of a feasibility study that incorporates the high-grade South Pacific zone later this year. Our 10% net profit interest at Granite Creek has a production threshold, and as of Q1, we were nearing 10,000 ounces of the total 120,000-ounce requirement. However, given the substantial grade and mining rates expected to exceed 1,000 tonnes per day in the near future, we anticipate achieving that production threshold rather quickly at Granite Creek. Thus, this could turn into a significant revenue contributor in the midterm. Beyond that, considering our 240 assets, there are various other catalysts across the portfolio. Our royalty generator model has seen notable success, with the likes of the Dole property sale and the TonopaWest auction payment received in Q1, and we continue to generate those royalties. Additionally, we expect nearly 400,000 meters of drilling in 2024, which adds to the nearly 2 million meters of drilling we've conducted over the last 3 years. Therefore, there are many catalysts that may not be immediately apparent but will translate into positive developments across the portfolio in the coming quarters and years. That being said, I'll hand it back to Dave to summarize, and before we open the floor for Q&A.

Thanks, Peter. I appreciate your attention today. The crucial message here, particularly in this rising gold price environment, is that with cost being a significant pressure point for producers, your best position is in a royalty company that gives you optimum leverage to the gold price and leverages the expertise of our underlying operators who invest about $200 million a year in the assets beneath our royalties, from which we reap the benefits. Additionally, we offer ETF-like exposure to junior companies. We have numerous early-stage royalties, many of which we have generated ourselves effectively for free. We provide exposure to various juniors within the exploration sector. As they start gaining attention in the marketplace, you will benefit from that exposure without concerning yourself with dilution issues that arise when juniors raise funds, since our royalties are at the asset level, remaining unaffected by their efforts to raise equity for financing exploration activities. Again, we possess a quality portfolio with Tier 1 royalties in North America delivering peer-leading revenue growth extending through the decade. This experienced management team, I believe, has consistently delivered, leveraging relationships to bring new opportunities into the portfolio and accessing capital creatively from some of the largest strategic investors in the industry, not only within the royalty sector but in the mining industry overall. This is evidenced by the strategic relationship we forged with Barrick, which is now our second-largest shareholder, along with Queen's World Capital and Taurus, which continue to furnish us with capital to propel our growth going forward. With that, Joanna, we’re happy to take any questions. Peter, Andrew, and I are here to respond to inquiries from our investors and shareholders.

Wonderful. Thank you, David, and thank you, gentlemen, for a great update. As usual, we have another full house today with over 111 interested stakeholders. Thank you all for tuning in this morning; we genuinely appreciate it. Now, before we take the questions, please do submit your questions in the Q&A tab located at the top of the screen. Our first question today is: What is the likelihood of Walbridge becoming a significant asset for growth?

Yes. Fenelon has always been an asset that has excited us. Our 2% NSR royalty covers all areas of mineralization in the current mine plan. The challenge for Walbridge presently is similar to that which afflicts most early advanced exploration companies—access to capital and advancing the project. However, this does not diminish the technical merits of Fenelon, which possesses 212,000 ounces over a mine plan exceeding 12 years. Our 2% NSR will provide us with significant revenue once that asset progresses. It resides in a sound jurisdiction with some strong strategic shareholders already involved, but it is also not one we are depending on for near-term production. That asset is one that could facilitate growth in the next decade based on our estimates.

The next question is from Heiko Ihle at H.C. Wainwright. This question is directed to you, David. Can you shed some light on what you are observing in the M&A environment, considering current interest rates and your peers seemingly scaling back on acquisitions? Are sellers becoming a bit more desperate? How are you capitalizing on that?

I believe it depends on where you look within the sector among larger-cap producers. They have had to significantly ramp up their M&A activity to replace declining reserves and production. We've witnessed multiple mega-mergers among the largest-cap producers in the sector over the last several decades. However, I mentioned earlier that over these last several decades, their production profiles have not improved. Their share counts have risen because they've had to acquire companies simply to maintain production profiles, and frankly, haven't been sustainable, especially given the reserve declines we've seen in the last 12 years due to the juniors' lack of access to capital, which is vital for exploration. We're now witnessing a surge in M&A activity that is required for producers to preserve their production and reserve profiles. The juniors, however, have a different dynamic; they are increasingly desperate for capital. They haven't enjoyed consistent access to capital markets for over a dozen years, resulting in a significant depletion of reserves. They perform the heavy lifting in exploration and discoveries, and their desperation opens opportunities for us to pursue royalties on some of the highest quality deposits available globally due to the capital constraints facing smaller explorers and early-stage developers.

The next question: As you progress with each quarter representing larger revenue for the company, how do you expect to minimize expenses since inflation rises affect operating costs?

I can address that. As we grow the business, one favorable aspect about royalty companies is that we don't require an excessively large team. I believe our team at Gold Royalty is well-structured and capable of fully executing our strategy, reviewing opportunities, and running the company. I think we can significantly grow our business without adding more personnel. This isn't necessarily the case for all peers in the sector, especially smaller groups that may have to retool and expand. Our team is small and costs are controlled, yet we execute our strategy effectively with the current staff. Regarding inflation, while we are subject to inflation as a non-operator, we may not experience the same impacts as operating mine companies, which is advantageous. There are variable cost components within our business we can control—our expenditures on marketing and insurance, for example. There are necessary costs, yet if needed, we could scale back in certain areas. Overall, I am confident in our operational strategies, and I anticipate that if our business grows significantly, we will realize outsized margin growth and greater cash flows far exceeding our operating costs, which I expect will remain fairly steady with our current team.

It seems the market is not adequately rewarding your revenue growth story. When do you anticipate reinstating a dividend now that free cash flow generation has been achieved?

We would be thrilled to have that dialogue with our Board as we enter a sustainable period of free cash flow going forward and discuss returning capital to shareholders in various forms. I think this is fundamental to any royalty story—to have a return of capital policy. This is something we will continue to explore as we achieve this growth. We are solidifying that revenue growth for the first time and generating free cash flow. This positions us excellently to engage in that discussion with our Board, and we will update shareholders accordingly.

Excellent. Can you discuss where the company has been saving costs, and break down the $2.3 million in cash operating expenses?

Over the past few quarters, I've outlined some of the areas where cost savings have occurred. What David mentioned earlier is also relevant; the company transitioned from a phase of consolidating other entities and reducing redundancies due to the consolidation process. We are still seeing those costs from the previous phase of our growth—essentially, the consolidation period—with Eli and Golden Valley Abitibi beginning to decrease as we move forward. When comparing Q1 of this year to last year, we can observe those savings. I've devoted considerable time examining how to enhance certain service agreements and contracts to find areas for savings with our service providers, working with insurance providers to maximize premiums among other aspects. This is where some of our savings have emerged. Regarding the breakdown of our operating expenses, the corporate administration line incorporates the G&A linked to marketing, office, IT, regulatory, and mineral interest expenses. In this quarter, we were marginally higher than both the previous quarter and the comparable quarter. Employee costs remain relatively flat, but lower professional fees during the quarter in areas such as audit, legal, and tax advisory services offset this increase. Therefore, we maintain a balanced approach to ensure we adhere to our cost strategies moving forward. Overall, cash operating costs were down 10% compared to the prior quarter, and I'm confident we will meet our internal budgeting and expectations for the year.

Gentlemen, can you discuss the recent share price performance?

Thanks, Joanne. As Dave mentioned during the presentation, the disconnect between equities and the gold price has been a trend we've observed across the sector, and gold royalty is not immune to it. Nevertheless, considering the strong fundamentals of gold royalty in Q1 and the conscious marketing efforts we have engaged for both retail and institutional shareholders alike, we have observed a bit more valuation credit relative to peers since the year's beginning. As the gold price persists near $2,400 an ounce, coupled with earnings exceeding expectations, we anticipate this disconnect will adjust throughout the remainder of 2024.

Next question: Why do you think we haven't seen more M&A within the royalty space given that the number of employees wouldn't have to grow to manage a larger portfolio, which could benefit shareholders?

That's an excellent question, Joanne. I foresee substantial consolidation within the smaller-cap players in the royalty sector, which we've characterized as any player smaller than the leading companies like Franco, Wheaton, and Royal Gold. There is clear incentive for such consolidation as it raises multiples and lowers the cost of capital. Scale is significant in our industry. Thus, it seems likely that we are on the verge of seeing a resumption of M&A activity within this space. While predicting the sequence can prove challenging, I believe it has become an economic necessity for smaller players to consider consolidation as there may be $50 million to $60 million of excess G&A within the industry that could be eliminated. We could manage a business 10 times our current size with the same workforce. If we were to roll-up companies as we did in 2021, we would likely realize nearly 100% synergies in the G&A acquired, consistent with the record we've set during our three roll-ups completed in 2021. There exists a compelling case for consolidation, driven by cost synergy benefits and the opportunity to scale, thereby enhancing multiples and reducing capital costs, which are essential for the business and key to our growth.

Can you outline the primary drivers of revenue for the company for the remainder of 2024?

In Q1, we enjoyed significant one-time land agreement proceeds, primarily from ConCall West and Dauntless, which constituted a large portion of our revenue. For the balance of the year, we focus on Cote going online in the latter half of 2024 and continued revenue growth from Borborema, Cozamin, and Canadian Malartic, driving our revenue for the remainder of the year. It's also worth noting that the average gold price in Q1 hovered around $2,070 an ounce, suggesting an uptick in our royalty-related revenue due to this stronger gold price.

Excellent. Let's discuss the Taurus Corp cooperation agreement and its benefits for the company.

That's a great question. First, I want to thank Andrew Gubbels for helping establish this relationship. We've managed to leverage relationships repeatedly to introduce opportunities into our pipeline before our competitors even become aware of them, working with the principles at Taurus, who were colleagues from my days at UBS. They have set up a new royalty fund. Our agreement allows for co-investment opportunities in projects over $30 million. This translates to access to a $200 million fund that is largely unallocated. Therefore, by showcasing royalty and streaming opportunities to them, we can target larger deals, as we have a partner that can co-invest with us. Moreover, we can halve due diligence costs on larger royalty opportunities and streaming arrangements. This strategy helps us rationalize operating costs while providing access to significant capital for upcoming investments.

To add to that, having the Taurus team on board enhances our coverage in identifying new opportunities worldwide. While we have a solid network in North America, additional connections with the Taurus team will enable access to opportunities across Australia and Asia-Pacific that might not have otherwise been available to us. It's a strategic expansion of our reach without adding more personnel to our team.

Good. Okay. Next question: Can you discuss the company's acquisition plans and potential capital expenditures for 2024?

Sharply building on the acquisition plan, you may have noted the deals we completed in 2023, such as Cosman and Borborema—focusing keenly on cash flow generation while being disciplined in our pursuit of high-quality assets. Given the scarcity of capital for numerous developers and explorers, we maintain a robust deal pipeline; nevertheless, the essential focus remains on quality. We possess an excellent array of exploration and development stage assets, but the aim is to discover the right complementary opportunities for our portfolio. As a royalty and streaming company, it's important to clarify that we fully finance each asset purchase. We are shielded from capital expenses regarding these assets. Once we invest, we secure top-line exposure and exploration upside without additional costs.

Excellent. Can you outline your top three strategies or more for executing growth over the next three years and how you plan to distinguish yourself among competitors to provide shareholder value?

We possess a unique model that sets us apart from all royalty companies, including larger-cap players with four distinct growth platforms. We've successfully executed on each platform and continue our efforts. In 2021, when stronger currency conditions prevailed, we proactively rolled up some of our competitors, making M&A a meaningful source of royalty creation and acquisition. When the currency weakened, we adopted alternative pathways. We're focused on royalty generation, which leverages our small team’s sweat equity alongside our investment in Baldor Mining. This enables us to generate well-structured royalties in Ontario and Quebec. Therefore, royalty generation, in addition to providing meaningful options payments on those properties, has become a profitable center while generating royalties at no cost. We've also financed projects very accretively, as evidenced by Borborema, exploiting our relationship with Dundee Corp. and my longstanding connection to Jonathan Goodman. When Jonathan approached me regarding the Borborema acquisition opportunity, we secured an exclusive deal that proved financially advantageous for our shareholders. Lastly, our third-party royalty acquisitions have been substantial instruments for growth; this is how we acquired the Copa royalty from an estate of a deceased prospector, facilitated by a key relationship with their attorney, providing us with strong exclusivity. Thus, being able to grow through these four multifaceted avenues—M&A, third-party royalty generation, project financing, and strategic acquisitions—places us in a favorable position to ensure steady growth across multiple platforms. This is a unique characteristic of our story; indeed, few others extend this breadth of tactics and execute them as successfully as we do.

A few more questions remain. We're approaching the top of the hour. Every business carries risks; as a management team, what do you perceive as the major risk factors facing the company in the next 2 to 3 years, and how do you work to mitigate them? Essentially, what keeps you awake at night, David?

If a royalty company is managed properly, the only risk should be the gold price. When you acquire a gold equity, you want unmitigated leverage against the gold price, and that's a risk I believe our investors are prepared to accept and we're willing to accept as well. Beyond that, it boils down to execution, and I think our record is exemplary in this regard. Remember, we only commenced operations in March 2021, just over 3 years ago. We initiated with 18 non-cash generating development stage royalties, and currently, we boast over 240 royalties, yielding 6 producing cash flows and another 14 in various stages of development, with a consensus projecting 60% compound annual revenue growth through the end of this decade. We expect 100% revenue growth this year while generating free cash flow. Concerning execution, I believe our performance has been commendable. Our board and management team possess over 400 years of industry experience combined, which is remarkable considering our small team size. We have successfully leveraged that extensive experience to stimulate rapid growth in a financially viable manner.

Excellent. Let's discuss commodities. Obviously, your primary focus is gold royalty, but does the company actively seek deals within copper and silver, particularly after the acquisition of Cozamin?

Absolutely. We focus primarily on precious metal deposits that exhibit polymetallic characteristics. We've analyzed over 300 opportunities since our IPO but executed on only about 8 or 9 of those. Thus, we are highly selective in our acquisitions, ensuring they meet all criteria concerning return, asset quality, and metal type. Polymetallic deposits can be advantageous because they usually deliver longer operational lives and exhibit lower cost structures due to embedded byproduct credits. This applies to Cozamin, which is also high-grade copper but contains substantial silver byproducts, helping to keep operational costs competitive. Therefore, while we remain primarily a precious metal-focused entity, Gold Royalty is appropriately named due to our focus.

Excellent. As a final question today, can you provide a high-level breakdown of your revenue this quarter?

Certainly. As detailed in our operational discussion and MD&A concerning key producing royalty assets, we generated $632,000 of revenue from Canadian Malartic, around $0.25 million from Cozamin, and $179,000 from Borden, with considerable revenue categorized in what we describe as the 'others' bucket. To elaborate, we accrued $1 million in land agreement proceeds from TonaPaul-West and an additional $725,000 from the Dontese property, leading to over $1.7 million from those two royalty generation efforts. We also see initial revenues from our Borborema investment contributing approximately $0.75 million. Collectively, these sums constitute the majority of our revenue for Q1. As highlighted earlier, we anticipate ongoing growth from our producing royalties and the Borborema investment, alongside Cote coming online in the latter half of 2024.

Thank you, Peter. Thank you everyone for joining us. As we're nearing the end of the hour, we will conclude the Q&A session now. Should you have any further questions, please direct them to Peter at peterbanke@goldroyalty.com. David, before we conclude, do you have any closing remarks for your stakeholders present today?

I echo what Joanne said. If you have any questions, feel free to reach out to us—we welcome your inquiries anytime, not just during town halls. We're pleased that you could join us today.

Thank you, David. Just as a reminder, this town hall will be available on the Gold Royalties website and all our social platforms within the next 24 hours. Before we wrap up, please fill out the short questionnaire at the end of this presentation, which helps us and the company communicate more effectively with you moving forward. Thank you for attending today, and we look forward to seeing you at the next town hall forum. Goodbye for now.