OR Royalties Q2 revenue rose 62% to $97.8M, but a Canadian Malartic rock wall movement could cost up to 7,500 GEOs annually from 2027. Management maintains guidance.
OR Royalties posted a strong second quarter, with revenue and operating cash flow each rising 62% from a year earlier. But the company warned that a rock-wall movement at the Canadian Malartic mine could cut future gold-equivalent ounce deliveries by thousands of ounces per year.
Revenue hit $97.8 million for the quarter ended June 30, up from $60.4 million. Operating cash flow reached $83.2 million. Adjusted earnings came in at $60.5 million, or $0.32 per share, up 78% year over year. The company delivered 43,497 gold-equivalent ounces (GEOs) in the first half, up 12% from the same period in 2025.
Chief Executive Jason Attew said on the earnings call that full-year guidance for 80,000 to 90,000 GEOs remains intact. The long-term target of 120,000 to 135,000 GEOs by 2030 also stands.
Canadian Malartic disruption
On July 1, a rock mass movement occurred along the north wall of the Barnat open pit at Canadian Malartic, operated by Agnico Eagle. No one was injured. Attew said Agnico's monitoring systems had tracked the movement, and mining in that area had already been suspended as a precaution.
About 1 million tons of material moved and will remain in place. Agnico plans to spend the third quarter building safety berms and access roads, with mining in the affected area expected to resume during the fourth quarter. Attew said roughly 370,000 ounces of gold are now inaccessible over the next three years, including 60,000 to 80,000 ounces in the second half of 2026 and up to 150,000 ounces in each of 2027 and 2028. Applying OR Royalties' 5% interest implies about 3,500 fewer GEOs in 2026 and up to 7,500 fewer GEOs in each of 2027 and 2028. Those figures assume no mitigation or recovery work by Agnico.
Despite the impact, Attew said 2026 guidance remains intact. He noted that Barnat was already expected to be mined out by 2028 or 2029. The Odyssey project, which is expected to be the future of Canadian Malartic, set a quarterly production record of 28,800 ounces. The first phase of shaft sinking reached 1,586 meters in July, and first shaft production remains on track for the second quarter of 2027.
Attew also noted that Canadian Malartic experienced a six-day mill shutdown in the second quarter after a fatal accident in April. He expressed condolences and said the company supported Agnico's focus on worker safety.
Other headwinds and offsets
Management said the second half of 2026 is expected to be modestly lighter than the first half. In addition to the Barnat disruption, concentrate transportation logistics at CSA deferred some silver and copper GEOs into the second half. Mantos Blancos delivered fewer GEOs than in the first quarter because silver grades were weighted toward the start of the year.
Ramp-ups at Namdini, San Gabriel, Dalgaranga, CB and CSA should partly offset the impact. OR Royalties received its first royalty payment from Dalgaranga during the quarter. The company's increased 2% royalty at Namdini is becoming a larger contributor as the operation ramps up.
OR Royalties currently has 23 producing assets. Cabral Gold's Cuiú project in Brazil is expected to become the 24th, with commissioning still scheduled for the fourth quarter.
Deals, balance sheet and shareholder returns
During the quarter, the company closed the Gold Fields royalty portfolio and Spring Valley acquisitions, totaling $335 million. The deals were largely funded through its revolving credit facility. OR Royalties ended June with $75.6 million in cash and $215 million drawn on the facility, for net debt of $139 million. It repaid $18 million on the facility during the quarter.
After quarter-end, OR Royalties closed a $28 million Murray Brook precious-metals stream with Canadian Copper and a $4 million equity subscription. It also expects to close a $15 million extension of its royalty coverage at Chile's Costa Fuego project to include the La Verde discovery.
The board raised the quarterly dividend by 18.2% to $0.065 per share in May. A further $0.065-per-share dividend was declared, payable Oct. 15. The company repurchased more than 225,000 shares for $8 million in the second quarter and about 1 million additional shares for $29.1 million in July.
Earlier this week, OR Royalties increased its revolving credit facility to $850 million from $650 million, raised its accordion feature to $350 million from $200 million, and extended the facility's maturity to August 2030 from May 2029.
Management said it will continue to prioritize accretive royalty and stream opportunities, while also considering debt repayment and opportunistic share repurchases when no suitable acquisitions are available.
The company's stock trades at $499.99, with an Alpha Score of 73 out of 100, a "Moderate" rating. Gold Fields, whose royalty portfolio OR Royalties acquired, scores 65 out of 100, also "Moderate."
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