OR Royalties Inc.’s 2026 Q2 Earnings Call: Acquisition Shifts, Jurisdictional Risks, and Malartic Outlook Contradictions

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $97.8M, up 62% YOY
• EPS: $0.33 per basic share, up 94% YOY
• Gross Margin: 96.8% of revenues, up from 95.8% last year

Guidance:

• First half deliveries of 43,497 GEOs, up 12% YOY, on track for 2026 range of 80,000-90,000 GEOs.
• 2030 outlook of 120,000-135,000 GEOs remains unaffected by Canadian Malartic incident.
• Second half GEOs expected to be modestly lighter than first half due to Canadian Malartic impact.
• No change to acquisition criteria: focus on accretive deals in tier 1 jurisdictions (Canada, US, Australia).

Business Commentary:

Revenue and Cash Flow Growth:

• OR Royalties reported revenues of $97.8 million for Q2 2026, up 62% year-on-year, with an operating cash flow of $83.2 million, also up 62%.
• This growth was driven by a 5% increase in gold equivalent ounces and higher realized prices of gold and silver.

Portfolio Performance and Acquisitions:

• The portfolio delivered 43,497 gold equivalent ounces in the first half, up 12% year-on-year, keeping the company on track for its full-year guidance of 80,000-90,000 GEOs.
• The company closed on acquisitions of Gold Fields royalty portfolio and Spring Valley, totaling $335 million, funded largely from its revolver, which stood at $215 million drawn at quarter-end.

Impact of Canadian Malartic Incident:

• Due to a rock mass movement at Canadian Malartic, approximately 370,000 ounces of gold are now inaccessible over the next three years, affecting GEOs in 2026, 2027, and 2028.
• Despite this, the company's 2026 guidance and 2030 outlook remain unchanged, as the asset's life of mine extends to 2060.

Shareholder Returns and Dividend Growth:

• OR Royalties raised its quarterly dividend by 18.2% to $0.065 per share, with a further $0.065 dividend declared, payable on October 15th.
• The company repurchased over 225,000 shares for $8 million during the quarter and an additional 1 million shares for $29.1 million in July.

Capital Allocation and Future Transactions:

• The company's capital allocation framework remains focused on returns to shareholders, investments in royalties, and ongoing debt repayment.
• OR Royalties has increased its revolving credit facility to $850 million and extended the maturity date to August 2030.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed confidence in portfolio performance, stating 'our portfolio did its job' with 62% revenue and cash flow growth. They highlighted strong cash margin conversion (96.8%), increased dividend, and share repurchases. The CEO asserted, 'The announcement of the wall movement changes our near-term GEOs, but it changes nothing about what we own and our shareholders as well.' The tone was optimistic regarding growth and accretive opportunities, noting 'the pipeline is active.'

Q&A:

• Question from Cosmos Chiu (CIBC): Any concerns about concentration risk given Canadian Malartic's size and importance to OR Royalties?
  Response: No concerns; Canadian Malartic is a crown jewel representing 25%-30% of NAV, with strong operator support, regulatory environment, and technical acumen, and the incident did not change the long-term outlook.

• Question from Cosmos Chiu (CIBC): How will recent acquisitions (Spring Valley, Murray Brook) impact the 2030 outlook, and when will it be updated?
  Response: 2030 outlook will be updated in February 2027; recent acquisitions and positive portfolio momentum will be included, but the current outlook is already robust with no contingent capital.

• Question from Cosmos Chiu (CIBC): How does the La Verde project (Hot Chili) compare to the main deposit, and what is the potential upside?
  Response: La Verde has drill holes similar to the main Cordillera deposit, is a significant contributor, and may be the first to go into production; drilling is active to prove up resources.

• Question from Tanya Jakusconek (Scotiabank): Should Q3 and Q4 GEOs be considered similar given the Canadian Malartic impact?
  Response: Second half will be modestly lower overall, with Q3 focused on safety work and Q4 benefiting from ramp-ups at other assets, but the full-year 2026 guidance remains on track.

• Question from Tanya Jakusconek (Scotiabank): How should we think about debt reduction versus dividends and share buybacks in the capital allocation framework?
  Response: Normal course is to pay down debt with cash flow; accretive acquisitions are prioritized, and opportunistic share repurchases may occur if there is a significant market mispricing.

• Question from Tanya Jakusconek (Scotiabank): Has the Canadian Malartic incident changed transaction focus towards immediate production?
  Response: No change; criteria remain tier 1 jurisdictions and assets providing GEOs within the five-year outlook; focus is on accretive value.

• Question from Derick Ma (TD Cowen): What is the update on Amulsar construction and addressing historical social/environmental concerns?
  Response: Construction is on budget and on track for first production mid-September; United Gold has managed social and geopolitical challenges well, and the asset is expected to be a significant contributor by 2028.

Contradiction Point 1

Acquisition Criteria and Focus

Change in stated focus for transaction types and timing.

What were the key points discussed by Tanya Jakusconek (Scotiabank) during the earnings call? - Tanya Jakusconek (Scotiabank)

2026Q2: Acquisition criteria have not changed. The focus remains on producing assets or development/expansion assets that contribute within the five-year outlook... - Jason Attew(CEO)

Has the Canadian Malartic incident shifted transaction priorities toward more immediate production? - Tanya Jakusconek (Scotiabank)

2026Q1: Regarding corporate transactions, the company is monitoring the sector but currently does not see significant value in most royalty and streaming companies. - Jason Attew(CEO)

Contradiction Point 2

Jurisdictional Risk and Transaction Strategy

Shift in stance on willingness to conduct deals in non-Tier-1 jurisdictions.

What were the key factors influencing Scotiabank's earnings performance during the call? - Tanya Jakusconek (Scotiabank)

2026Q2: The deal pipeline includes large precious metals transactions ($500-$700 million and even billion-dollar opportunities). - Jason Attew(CEO)

Has the Canadian Malartic incident shifted transaction priorities toward immediate production? - Derek Ma (TD Cowen)

2026Q1: OR is strongly committed to its Tier-1 jurisdiction focus (North America, Australia, etc.) and would avoid material transactions in non-Tier-1 regions like Africa, as this is a core differentiator. - Jason Attew(CEO) and Fred Ruel(CFO)

Contradiction Point 3

Canadian Malartic Production Outlook and Guidance Timeline

Contradiction on the stability of Malartic's production outlook and when specific guidance will be provided.

Tanya Jakusconek (Scotiabank) - Tanya Jakusconek (Scotiabank)

2026Q2: Prior to the incident, H1 and H2 were expected to be similar. Q3 will be modestly lower... Q4 is expected to be modestly stronger... Overall, subtract about 3,500 GEOs for 2026. - Jason Attew(CEO)

How will the removal of ounces from Canadian Malartic impact the similarity of Q3 and Q4 GEO delivery? - Josh Wolfson (RBC Capital Markets)

2025Q3: No surprises expected. Grade overperformance is due to higher grades around underground stopes. ... Malartic's production is expected to continue without major deviations. - Fred Royal(CFO)

Contradiction Point 4

2026 Production Outlook and Impact of Canadian Malartic Incident

The expected 2026 production from Canadian Malartic was significantly reduced, impacting quarterly GEO delivery.

What are the main factors contributing to Q2 revenue growth? - Tanya Jakusconek (Scotiabank)

2026Q2: Overall, subtract about 3,500 GEOs for 2026. - Jason Attew(CEO)

Will Q3 and Q4 GEO delivery be similar following the removal of ounces from Canadian Malartic? - Fahad Tariq (Jefferies)

2025Q2: The company is confident in achieving the 55% of annual GEO guidance in H2. - Jason Mark Attew(CEO)

Contradiction Point 5

Timing for Updated Long-Term Outlook

The timeline for providing an updated 2030 outlook shifted forward.

What were the key factors driving revenue growth in the latest quarter? - Cosmos Chiu (CIBC)

2026Q2: The 2030 outlook (120,000-135,000 GEO) will be updated in February 2027. - Jason Attew(CEO)

How will recent acquisitions like Spring Valley and Murray Brook impact the 2030 outlook, and when can we expect an updated long-term outlook? - Cosmos Chiu (CIBC)

2025Q2: The criteria are: 1) high confidence that an asset will contribute GEOs within 5 years... Spring Valley may be included once its financing plan is finalized... - Jason Mark Attew(CEO)