Update: Osisko Gold Royalties Secures $100 Million Credit Facility, Updates Website

Summary

• Osisko Gold Royalties recently announced that it has secured a $100 million revolving credit facility which it can use to complete streams or royalty deals.
• I did not anticipate this news in my first article on the company.
• The news is positive as it means Osisko will likely complete another deal or two in the not too distant future.
• I'm holding off on buying shares at current levels as I want to see which direction the company goes on its next few deals.

Osisko Gold Royalties (OTC:OKSKF), a new gold-focused royalty and streaming company that was spun-off from Osisko Mining (OSKFF) has announced that it has secured a $100 million revolving credit facility from the National Bank of Canada (OTCPK:NTIOF). The facility bears interest at a base/prime rate plus between .50 and 2.5% and LIBOR loans will bear interest between 1.5% and 3.5%, depending on the company's leverage ratio. The purpose of the facility is to purchase future investments, such as a gold stream or a royalty on an operating mine. The facility may also be increased by $50 million at Osisko's request and has a two-year term. The company also recently updated its website, which gives investors a more clearer picture of what the company's goals are, its strategy going forward, details on its asset base, management team and more.

In my first article on Osisko Gold Royalties on July 25, I argued that investors should hold off on buying shares until a clearer strategy is put forth by management. At the time, the company was brand new so there was no company website, corporate presentation, or background information on its non-Malartic assets available. I also felt Osisko didn't have a diverse enough asset base, with just one producing asset and three development stage assets.

The news of the revolving credit facility is positive and a step in the right direction in my opinion, as it shows the company is focused on growing and diversifying its assets. With $156.7 million in cash and $256.7 million in available capacity to complete deals, zero debt, a tight share structure of 47.9 million shares outstanding and a market cap of just $660 million, Osisko Gold Royalties looks like a decent buy at current prices, but I am holding off for now as I'd like to see which direction the company heads towards. I will keep a close eye on the company going forward, and I look forward to seeing its next acquisition.

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