Nov 13, 2017
Executives
Sean Roosen - Chairman and CEO Elif Lévesque - CFO and VP, Finance Joseph de la Plante - VP, Corporate Development
Analysts
Cosmos Chiu - CIBC Tony Lesiak - Canaccord Genuity Mike Jalonen - Bank of America
Operator
Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties Q3 2017 Results Conference Call [Operator Instructions] Please note that this call is being recorded today, November 9, 2017 at 10 a.m. Eastern Time.
Today on the call, we have Mr. Sean Roosen, Chair of the Board of Directors and Chief Executive Officer of Osisko Gold Royalties; and Ms.
Elif Lévesque, Chief Financial Officer and Vice President of Finance. I would now like turn the meeting over to our host for today’s call, Mr.
Sean Roosen, Chair of the Board of Directors and Chief Executive Officer of Osisko Gold.
Sean Roosen
Good morning, everybody, and welcome to the third quarter call. I find myself at the Zürich Airport this morning.
So I apologize for any background noise that we may have, but quite proud to present the Q3 results for 2017. The results for the Osisko Gold Royalties have been quite spectacular over the evolution of the first three years.
And I think that Q3 was an extremely transformative session of business that we conducted with over $1.1 billion of assets acquired from the Orion portfolio, consisting of 74 royalties, streams and precious metal off takes, including a 9.6% diamond stream on the Renard diamond mine and a 4% gold stream on the Brucejack gold project -- gold and silver mine. Both are new mines in Canada, in addition to 100% silver stream that we acquired on the Mantos Blancos copper mine in Chile.
And just by way of formalities, we do are referring to the PowerPoint that is on our website. And Page two of that PowerPoint has a cautionary forward-looking statement clause that should be read, as we will be making some forward-looking statements as we get further into the presentation.
We also declared a $0.05 per common share dividend payable on October 16, 2017 to shareholders of record, and I’m very happy to see that this represents a 25% increase in our previous quarter dividend. And we are very happy that as a young company, only -- that’s a little over three years in existence, we’ve been able to pay a dividend pretty much every quarter that we’ve existed.
Subsequent to the end of Q3 in 2017, we’ve been very busy as well. As of November 3, we closed a bought deal offering on a convertible unsecured debenture for $300 million to reinforce our treasury and to allow us to continue to carry on with our business.
And on November 8, 2017, we declared a dividend of $0.05 per share. And also, on November 8th, we’ve announced the US$65 million gold stream and private placement to Aquila Resources.
More details on that as we look at Slide 4. It represents a $55 million gold stream.
In reference to Aquila’s flagship Back Forty project in Michigan, USA, Osisko is entitled to 18.5% of payable gold until 105,000 ounces is delivered and 9.25% after the life-of-mine. Staged upfront deposit payable, predetermined by the project milestones, and ongoing payments equal to 30% of the spot price gold to a maximum of $600 an ounce; concurrent to a $10 million private placement in the equity holdings of Aquila, which gives us roughly 15% ownership in the company after that transaction has concluded.
We also are adding this to our 75% silver stream on the Back Forty that we acquired through the purchase of our Orion deal. So this is a deal that we have added to from our Orion package and that we have looked at what we already own and added to the investment there.
So pretty significant for us; and then in terms of taking what we already did with the Orion transaction and building on that opportunity. In terms of what it represents for us, significant streaming interest on an advanced North American project, with Michigan being one of the better jurisdictions, to look at development as far as we’re concerned, having already made an investment in Highland Copper.
We are familiar with the jurisdiction, and we like what we see. Midterm cash flow, it’s a pretty simple project, quite high grade.
Upside potential for further exploration on the project, and it keeps a focus of Osisko’s low-risk jurisdiction tier in North America, and it also adds value to an existing silver stream that we have on the project. The execution on new pipeline of opportunities acquired through Orion continues to be a main theme as we look forward to the rest of the year.
Page 5 gives you a basic summary of the project. I won’t go into too much detail here, but we are looking at a pretty significant asset with a major exposure to zinc and to gold.
Zinc has been quite strong as of recent, and we think that there’s quite a bit of upside in the zinc space as we look forward to where we are. And this represents about 1 billion pounds of zinc, 1 million ounces of gold and just a tick under 12 million ounces of silver in the existing resource.
So I think it’s a pretty good stepping stone for us, a project that we like and we know well. Total payable production to us is 532,000 ounces of gold and 4.6 million ounces of silver.
So on that note, we have time in the Q&A for any more questions that we might have on the Aquila transaction. I’m going to pass it over to Elif Lévesque to give you insight on our Q3 results and some of the things that are unique to the quarter due to the transactions that we have executed during the period.
Elif, over to you. Thank you.
Elif Lévesque
Thank you, Sean. So yes, we did have a very busy third quarter with the Orion transaction closing on July 31st.
With the acquisition, we also inherited an international structure. Part of the quarter was based on setting up that office.
And we also hired Michael Spencer, who was previously at sales Maxit Capital, and he will be actually leading our international business from our office in Bermuda. Due to the first quarter-end after the acquisition of the Orion transaction, we have some impact, of course, on the quarterly results.
The earnings and GEOs actually reflect two months from the Orion assets. And we still did record quarterly gold equivalent ounces earned at 16,664, of which about 5,500 ounces were from Orion, which represents a 65% increase compared to the same period last year.
If you look at the quarterly revenues, we also have record quarterly revenues for the quarter from royalties and streams at 26.1 million compared to 17.6 million in the same period last year. And here, we look at it as revenues, especially before the off takes that we’ll put in the off takes very even actually look in the higher revenues of 16.2 million.
And I will just take a second here to kind of explain the off takes a little bit because they do change the numbers slightly. In the sense that the way these precious metal off takes work that we’ve purchased from Orion, they basically give us a window of a quotation period from six days to about 12 days, where we can actually select the lower price of gold within that period, and then we actually go and sell those ounces.
So at the end of the day, we make a zero to 5% profit margin out of this. So we internally look at this on a net earnings basis.
But for accounting purposes, we have to actually show the revenues and the cost of gold separately. And that’s why you see substantial increase in the revenues for the quarter.
So even without those off takes, we’re looking at a 48% increase in the revenues for the two month periods from Orion. Net cash flows provided by operating activities at 1.1 million compared to 15 million in the same period last year.
And again, here, we had some unusual items. We have about $8 million due to transaction costs of Orion that were accrued during the period.
We also have, for the first time, in RSU payments we have since our initiation of the company. It’s the first RSU payment that we have actually completed.
The first RSUs were given in 2014, which lasted in three years. And in September 2017, they actually vested, so there was a payment of 5.5 million on those RSUs.
And we also had about 7 million inventories from the Orion transaction due to the off takes in the end of the quarter. Without these unusual items, we would be probably more looking at a 22 million level operating cash flow, which would represent about a 45% increase compared to the same quarter last year.
Net earnings attributable to Osisko’s shareholders were at 6.7 million, $0.05 a share, compared to 17.8 million, $0.17 a share. And adjusted earnings were at 8 million, $0.06 a share, compared to 12 million, $0.11 a share.
And again, here, of course, with the Orion transaction, we saw about a 50 million increase in our shares outstanding, which kind of reflected on the per share results. And I will probably go into a little bit more detail on the earnings in some of the following slides.
Slide 7 will show you the increase in the GEOs and our guidance. So we had an effective date on the Orion transaction of 1, of June 2017.
So the June and July actually ounces were for Osisko. However, since the transaction closed on July 31, those ounces got accounted for in the first equation.
So it’s basically a reduction to the purchase price of the transaction itself on the balance sheet, and that’s why you’re seeing just two months in our GEOs. And in terms of guidance last quarter, we had given you guidance with a little bit of a larger, I guess, bracket.
And since then, it was our first expense this year with the Orion assets. With about 38,000 ounces over the -- for the first nine months of 2017, we still believe that we’re going to be within the guidelines for 2017.
Slide eight, is basically a split by commodity. You will see, after the Orion transaction, we’re still heavily invested in precious metals.
And if you look at our GEOs for the third quarter, we see that we’re 86% precious metals, and we have 12% in diamonds. The next slide now shows the revenue evolution and also the net cash flow from operating activities.
We also saw in this year compared to last year the same period a reduction in the gold price. Gold was lower, about 10%.
We did, however, slightly beat the market. Our realized price was at $1,296 versus a $1,278 of PM average fix.
And as I explained in the third quarter of 2017, we did have some unusual items in the cash flows, but we should see improvements in the next quarter without those unusual items. I guess, without going over it one-by-one, I think we did touch base with most of these, but I do want to talk about the gross profit here.
You will see the depreciation -- the depletion amount increasing compared to last quarter. Of course, that’s basically related to the Orion transaction.
And you will also see that net earnings are $6.87 million compared to $18 million last year. There are several reasons to that.
One of them, the one that I mentioned, related to the transaction cost of Orion, which represent about $8 million. We also had some foreign exchange losses this quarter of $8 million compared to some gains last year.
So again, if we look at the earnings without those unusual items, we would be actually looking at over a 40% increase compared to last year. And we felt that it would be important to give you a breakdown in terms of the type of interest that we have.
So on the next Page 11, you will see a breakdown of the royalty streams and off takes. And you will see separately the revenues, cost of sales and depletion information as well as the gross profit.
And I think what I would like to show you here is that if we look at the royalties and the streams, then the revenues for those two items would represent $26.5 million compared to the $17.6 million last year. And if you look at the gross profit margin for those two line items alone, we’re looking at a 59% gross profit compared to revenues.
And I think that’s probably an important one to look at. And in terms of the off takes, you will see here the large amount in the revenues and the cost of sales, as I mentioned earlier, which gives us the gross profit before depletion of $0.7 million, which represents about $20 per ounce of profits for us, which represents about $25 an ounce.
And I think that’s probably the way that we should look at these off take agreements. Page 12.
So from the beginning of the dividends in Q4 2014 until now. Last quarter, we increased our dividends to 20 -- to $0.05 per share per quarter, and we repeated that this quarter as well.
Of course, the idea is to be able to keep growing the dividends as we see an increase in the operating cash flow. On Page 13, some of the balance sheet items.
As of September 30, we also gave you the information on a pro forma basis with the convertible debenture financing as of September 30, so which basically would bring our cash and cash equivalents with an increase of about $289 million. So almost $400 million.
And that will be increasing from about $194 million to about $462 million. And the increase in the debt is somehow lower than the increase in cash flow because there’s also going to be a liquidity component of the debentures based on the convertibility option.
And our fair value of our investments as of September 30th stood at about $420 million. So with that, Sean, I would like to turn the call back to you.
Sean Roosen
All right, thank you very much, Elif, and we can have a more in-depth discussion on the Q&A period if there are some issues that are unclear. A lot of moving parts in this quarter; but on to Slide 14, we do want to highlight the fact that we are a North American-based-focused asset group, and we’ve had quite a few high-quality assets within our portfolio.
We have been focused on building quality in the asset base. And now, with the addition of the Orion assets, we have some exposure on the international side on what I believe are quite significant and high-quality assets as well.
I won’t go through them in all detail. But today, Malartic continues to be our flagstone there, our cornerstone asset with 5% top line royalty.
And Canadian Malartic was still Canada’s largest gold producer. Most recently, the 9.6% stream from Renard and the 2.3% stream that we have on Éléonore continues to ramp up.
And as we look forward, we see quite a bit of development in our favor also at Mantos, where I think the management team there is advancing that project in a way that’s going to be very valuable to Osisko Gold royalty shareholders. And on to the next slide on Slide 15.
Our accelerator and near-term asset companies continue to deliver a lot of value to shareholders. We have over 870,000 meters of drilling ongoing on our royalty-held lands.
And our royalties and streams as well as our equity position in our accelerated companies have had a very good year in 2017 so far to date, led by Windfall, where we own a 1.5% royalty already. We now sold 15% of the equity in the company, and that company has seen significant increase in value from $10 million to over $750 million of market cap.
We’ve also seen Falco Resources recently delivered a feasibility study with just a tick under US$700 million of MPV and measured and indicated and proven in probable reserves, so giving that project around 6.7 million ounces gold equivalent. So quite a significant milestone for that company and one of the catalysts to learn the foundations of our accelerator model.
We’ve also seen significant drill results delivered by Barkerville Gold in the Cariboo District in British Columbia, where we own a 2.25% royalty. And it continues to be one of the stronger exploration and development stories as we get further into unlocking the value on that and taking advantage of that.
Most recently, I just spent the weekend -- last weekend visiting the Lydian assets, Amulsar, where we see good progress in the Republic of Armenia, developing that heap leach asset, and we expect production to start there next summer. And we have a pretty good exposure there with 4.2% gold stream, 62% silver stream and 82% offtake agreement on that project.
It is a spectacular asset. And the construction is going along quite well, and we expect that to be a great outcome from the Orion acquisition as we move forward.
Page 16 really summarizes some of our major assets. The Renard stream of 9.6% diamond stream continues to be in ramp-up.
The company is dealing with some issues at the processing facility in terms of a touchiness breaking up diamonds within the circuit. But we believe that, that should be resolved over the next couple of quarters, as new technology through ore is being introduced to the circuit.
We’ve also seen spectacular outcome at Brucejack, where we own a 4% stream. That does have a buyback on it, but the mine has been ramping up quite nicely.
And I’ve had the good fortune to visit the project earlier in September, and I congratulate the management team at Brucejack for having delivered the mine on time and on budget. And it looks like they’re in pretty good stint to deliver on all of their commitments.
So we’re really happy with that investment. And again, I think that they’ve done a spectacular job in terms of delivering that mine to the market.
Our other next tier of assets would be Island Gold, Gibraltar, Seabee and Bald Mountain, some of which who’ve had spectacular come this year. In particular, Seabee has had a great move forward, and we’re seeing obviously Island Gold seeing an acquisition.
So things are moving forward in our asset base. No further capital required from the Osisko shareholders, but our asset base is getting stronger without any further investments from us.
So I think that’s the best outcome we can have in terms of development assets, and we congratulate all the management teams involved in moving those projects and those companies forward. Page 17, a bit of a summary.
Between South and North America, we have 111 assets out of 130. So dominantly in the Americas, with Peru and Chile being our South American jurisdictions.
So we believe that Osisko does represent one of the best investment opportunities for a state jurisdiction exposure to the gold price and precious metals sector in the world. And we continue to develop that, and we’re looking at what we think is the right-sized opportunity on the international side to continue to deliver value on some of those projects into the international side of the business with Amulsar having delivered pretty good results so far and some exposure into Australia as we get further in.
If we look at Slide 18, we can see that we’re scheduled for an 81% increase in terms of where we are exposed to North America -- sorry, we are at 81%, and that gives us a dominant exposure in the Americas. So on that note, I would also like to congratulate the Osisko global royalties team for an extremely heavy year in terms of deals and structures and having delivered significant results back to the shareholders.
And I thank everybody on the Osisko management team, on behalf of the Board of Directors, for all the hard work they’ve gone into get us where we are to report to you today on the Q3 numbers. And as we look forward to the end of the year, obviously, fairly busy times.
We think that the company is in good stead, and that we have quite a few growth opportunities available to us. And on that note, I’ll hand it back to Montréal to look at the Q&A.
And please feel free to ask us any questions regarding any of the assets that I’ve discussed in this quarter. Thank you.
Operator
[Operator Instructions] Your first question comes from the line of Cosmos Chiu from CIBC.
Cosmos Chiu
Sean and Elif, a few questions from me here. Maybe first off, the accounting is getting a bit complicated here, so maybe we’ll start there.
In terms of these off take agreements, which ones were active in Q3? And how will we have been able to calculate the $40-million-odd sort of revenue based on those numbers?
Elif Lévesque
Yes. So for this quarter, we have Brucejack that’s active, probably one of the major ones.
Then we have Matilda in Australia, and we also have the Pararl offtakes. So these are kind of the three.
The way they work, so we do receive the ounces from the producers on a weekly basis. And the ounces that we do receive are booked as a revenue.
And that’s why you see the $40-million-plus level. And then we go back, and then we sell those ounces.
And that’s what makes the cost of goods sold. So we’re actually taking physical delivery from the operator for their production, and then we’re the ones actually selling them.
So I think in terms of the impact, and that’s why I mentioned it’s probably more meaningful to look at this on an earnings basis, because that’s possibly going to be more, in terms of modeling, what now is going to be more interesting. What we have for the quarter was about $20 per ounce, and you could probably model something between a $20 to $30 range comfortably.
Cosmos Chiu
Okay. So $20 an ounce for all 3 off takes?
They’re currently active at this point in time?
Elif Lévesque
Yes, exactly.
Cosmos Chiu
Okay, cool. And then maybe switching gears a little bit.
I think, Sean, as you had mentioned, the Renard, there’s been some issues since start-up. I don’t know that asset as well.
So based on your knowledge, what’s happening there? I guess, in your MD&A, you talked about breakage being an issue.
I would have think that diamonds are pretty hard to break. But what’s sort of happening here?
Sean Roosen
Obviously, it’s better that the management of Stornoway address that issue technically, but I’ll give you my takeaway on it, is that there is some harder material within the kimberlite that is re-circulating within the crushing and grinding circuit that needs to be removed before it comes in contact with the diamond processing. And they’re looking at introducing an ore sorting technology that’s being refined and installed now.
And we’re hoping that sometime in Q1 or Q2 that, that will resolve the issue of the re-circulating harder material that’s in the source of the breakage.
Cosmos Chiu
Great. So I guess -- so you think that ore-sorting material or a machine blasting off some of that harder rock, kimberlite rock, and then just using that to resolve the issue?
Sean Roosen
That’s my understanding of it. That’s why I can’t really speak on behalf of the company, but that is our best understanding of it.
And we think that the problem gets resolved. As you well know, our group was involved in an advisory role throughout the construction of this mine and, in particular, the mill.
So we think that our guys have a pretty good understanding of the processing facility, and we think that the solution is technical.
Cosmos Chiu
And then maybe one last question for me here in terms of the Bermuda subsidiary that was acquired as part of Orion. It looks like you’re going to be using it more often on a go-forward basis based on what we saw with the Aquila acquisition today.
Is that the plan, to run through or structure off future sort of streaming deals through that subsidiary?
Elif Lévesque
Yes. I think going forward -- sorry, go ahead, Sean.
Sean Roosen
No, go ahead, Elif. Obviously, this is a tax question, so I’ll let Elif answer it.
Elif Lévesque
So at the end of the day, yes, like most of the streams and the offtake agreements that we purchased from the Orion transaction are under that structure. And we inherited it, so it’s not a new structure that we actually made.
And the only stream that was actually through Canada was the Renard stream. So going forward, of course, anything that’s related to those assets will go through that entity because they are actually that entity’s asset, and we’ll probably be looking at international deals out of that subsidiary as well.
Operator
Your next question comes from Tony Lesiak from Canaccord Genuity. Your line is open.
Tony Lesiak
I was hoping you could provide some longer-term guidance for Mantos given the mine plan changes we’ve seen there and the expansion potential for the concentrator.
Sean Roosen
Yes. I don’t think that I’m really in a position to give you too much insight right now, Tony, and I apologize for that.
But it is a private company, and they are working on several progress issues there. I think that they’ve made, obviously, quite a bit of progress in terms of establishing a new management structure under the new corporate structure.
We have met with management last week and are extremely encouraged with the changes that are made. But I don’t think that I can go forward with too much guidance on that other than to say that the status quo is good, and any improvements will be better.
So that’s where I’ll have to leave it today.
Tony Lesiak
I mean, you mentioned the 70% concentrator expansion number. I mean, is that kind of directly associated with attributable silver production?
Sean Roosen
Joseph, do you want to jump in here? You’re more up to speed in terms of what we can discuss on this one, given that it’s a private company.
Joseph de la Plante
That’s correct. So they’re currently in the devolve making process at the concentrator, which is yielding good results on things as a direct correlation in that increase to the silver production.
Tony Lesiak
A strategy question for you, Sean. Is the offtake business really worth the effort?
I mean, a small part of your NAV, low margin, it’s volatile, you’ve got some accounting challenges there. What do you think of that?
Sean Roosen
I think it’s a pretty solid part of our business. We are already set up to handle precious metal trading.
And we have really no extra cost to being in that business, though I do realize it makes some noise when you’re trying to do your quarterly. But it’s delivering significant returns to us.
And the only time that we actually -- we would be in a zero-revenue position on a stream would be at stable commodity prices. So as long as we have a little bit of volatility in commodity prices, this is a pretty good source of revenue with relatively little low risk.
So it’s not going to be a huge part of our business, but it is going to be, what I believe, a nice, consistent delivery of a little spice in the soup.
Tony Lesiak
Okay. Just on the revenue number that you’re showing for the quarter, the 1,296, does that include the gains on the offtake side?
Elif Lévesque
The revenues on the income statement does include the offtakes, yes.
Tony Lesiak
So the 1,296 realized price that you’re quoting includes the sum, $20 an ounce, that you were mentioning?
Elif Lévesque
Exactly.
Tony Lesiak
Okay. And then finally, just on the Aquila transaction.
In your minds, like what are the key issues revolving around that final issuance of that final permit? And any comments on timing?
Sean Roosen
I’m going to refer this one back to Joe. There’s quite a bit of background noise here in Zürich.
So Joseph, over to you.
Joseph de la Plante
Sure. So as you know, the company just hanged three of the four major permits that they need to put the mine into production.
The last permit they need is a wetlands permit. So there’s a very small wetlands on the property.
They’re in the process now of applying for that permit. And our understanding is that on the current time line, they expect to receive the permit sometime in Q1.
At which point, they would also likely issue their final feasibility on the project.
Sean Roosen
Well, thanks, Tony, and let us know if there’s anything else that comes up in your review.
Operator
[Operator Instructions] Your next question comes from Mike Jalonen from Bank of America. Your line is open.
Mike Jalonen
Sean, just a strategy question. When Osisko started out, you really made a big statement about being Canada-focused.
And now with your Bermuda office, you mentioned going global. So I’m just wondering if this is a natural evolution or buying an Orion, you just kindly stumbled into this.
I’m just wondering what your thinking is.
Sean Roosen
Well, obviously, Mike, I think we’ve done a pretty good job of being involved in some of the best and most strategic assets in the precious metal space in Canada. It is, obviously, our backyard on where we operate and where we know things well.
And we’ve continued to make investments in Canada. The most recent press release that we announced today was in Michigan, just across the border.
The acquisition of the Orion platform did afford us to come up with a competitive platform that we can use to invest on the international side. But I still believe that being dominantly invested in Canada, having the Canadian dollar as a natural hedge in terms of protecting margins on the gold price is still a pretty valid asset to us and to our shareholders.
So you can rely on us to stick pretty close to the poutine and maple syrup, as we have in the past. And we’ll take our international business to the next level.
But as you know, a lot of the people in the team have quite a bit of an international experience. So we want to leverage that a bit now that we feel that we’ve set the stage for our Canadian business.
And we’ll moderate ourselves on the international side, but we do want to be opportunistic and provide capital to good projects in a competitive environment on the international side. So it is part of the Orion deal that set the stage for that, but it’s not that far out of our natural habitat.
Mike Jalonen
Okay. Maybe one more question.
If I move to Murdock Avenue, Falco, I guess, it’s not Osisko Gold Royalties, so maybe you can answer it. But I’m just wondering are they looking for a stream for the finance farm?
Sean Roosen
Yes. We would think that there’s a stream there as you look at our agreements.
We actually have a right to propose a stream on that project. And we think that -- as we’ve said earlier, Mike, the accelerator companies like Falco provide us the opportunity to invest further capital on behalf of Osisko Gold Royalties’ shareholders in an environment where we’re very familiar with the assets.
And we can -- we think that we can be a pretty competitive provider of capital. And obviously, this project is a new one around in Québec.
It’s our backyard. It’s one -- we believe it’s one of the great Canadian mines that will be built.
It has a 15-year mine life with the reserves that are identified in the current mine plan, with another 5 to 10 years of upside. So we think it is a great Canadian asset.
It is in Québec, and we are looking forward to being a provider of capital on that project in the neighborhood of the kind of financing that can be done there. We could see Osisko Royalties as one of the potential providers of capital on a stream that could be worth somewhere between $100 million and $200 million.
So there’s a significant opportunity that is the direct outcome of our accelerator company program.
Operator
There are no further questions at this time. I’ll turn the call back over to the presenters.
Sean Roosen
All right. Well, thank you, everybody.
And please feel free to reach in. Just by way of general news, we just went through the Zürich Precious Metals Summit.
I think that Osisko had quite a few shareholders here in Europe. And we’ve updated them, and we continue to develop our business.
And I’m quite happy and very pleased with the evolution. 2017 has been one of the busiest years ever for the Osisko Group, and we look forward to finishing up the fourth quarter strongly and competitively as we move forward, just continue to establish ourselves as the fourth-largest precious metal streaming company in the business and also to see the strength of our accelerator group come forward, and the proof of that business model continue to deliver results.
Just as a reminder, our equity positions have a value -- market value of $420 million right now. And our base cost is about $277 million.
So we’ve had a pretty extraordinary outcome with our accelerator companies. And we continue to look at providing about 75% of our investments going to traditional royalty and streaming.
And off take agreements of about 25% going into are somewhat unique to us, accelerator model, as we go forward. Currently, we enjoy the benefit of over 40 drills turning on our royalty-held lands, and we expect to see great drill results and forward-motion on a lot of the assets that we are involved with, with our Osisko global royalty shareholders.
And I thank everybody for their support, especially in this last deal, where we raised $300 million through the convertible on that note. Thank you very much, and we will talk to you next quarter.
Operator
This concludes today’s conference call. You may now disconnect.