10:52 AM EDT, 10/01/2024 (MT Newswires) -- Osisko Gold Royalties ( OR ) kept its Outperform rating and US$20 price target at RBC Capital Markets, according to a note published Monday.

RBC noted the company recently announced the acquisition of a 1.8% net smelter royalty on the Dalgaranga gold project in Western Australia for US$44 million, as well as a 1.35% gross revenue royalty on adjacent regional exploration land for US$4 million.

RBC said the impact is "neutral", noting the transaction provides for incremental production within the company's five-year guidance range at a "reasonable" base-case calculated investment return, although overall it has no material valuation consequences.

In assuming RBC estimates on 'steady-state production' of near 160koz/a over a 12 year mine life, and a 20% buyback is exercised, RBC estimates an IRR of 5% at spot gold and a 'steady-state average cash yield' of 13%. On a steady-state basis, RBC said, the project should generate production to OR averaging near 2.2koz/a, representing near 2% of corporate production. RBC noted that sequencing higher-grade ore earlier could improve these figures in the mine's early years of operations.

Osisko's share price was up near 1% at last look on the TSX.

Price: 25.31, Change: +0.26, Percent Change: +1.04