Osisko Gold Royalties Ltd (OR) Q4 2020 Earnings Call Transcript

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Osisko Gold Royalties Ltd (OR -0.31%)
Q4 2020 Earnings Call
Feb 25, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, ladies and gentlemen and welcome to the Osisko Gold Royalties Q4 and Year 2020 Conference Call. [Operator Instructions] Please note that this call is being recorded today, February 25, 2021 at 10 a.m. Eastern time.

Today on the call, we have Mr. Sandeep Singh, President and Executive Officer and Mr. Frederic Ruel, Chief Financial Officer and Vice President, Finance.

I would now like to turn the meeting over to your host for today's call, Mr. Sandeep Singh. [Foreign Speech]

Sandeep Singh -- President, Chief Executive Officer and Director

Thank you, operator. Good morning, everyone. [Foreign Speech] Thank you for taking the time for an update on our Q4 and 2020 full year results. [Foreign Speech]. So Fred and I will walk you through the results this morning, and Sean will also be available during the Q&A. The presentation I'm following is on our website. So please, if you haven't already, you can pick it up there. And I'll do my best to refer to page numbers as I'm going through it, starting with the forward-looking statements on slide two. Please be mindful that we will be making forward looking remarks. On slide three, just kicking into the highlights for the year.

I would say to start off with, despite the obvious challenges with respect to COVID this year, for us and more importantly, for our operating partners, we ended up having a very strong year, earning just over 66,000 ounces for the year above our revised guidance, taking into account the shutdowns that we experienced in Q2. And ended the year, kind of back where we started in terms of a run rate with all our assets now chugging along at their full capacity, we believe. That led to record cash flows, obviously, and revenue is buoyed by the fact that the decreased production for the year was compensated by higher gold practices, and we look forward to higher gold and silver price as we look forward to continued positive outlook from a gold and silver perspective going forward. Our margins stayed high at 94%, the highest in our peer group.

And by virtue of having more royalties and streams and more free ounces than cheap ounces, if you will. And generated a significant amount of adjusted earnings over the course of the year, $0.27 a share on a basic share basis, and Fred will walk you through some of the more detail around that. I think worth pointing out for the quarter, a lot of what you're seeing, and I think maybe the analysts who cover us have already picked up on this is, is some, a slight bit of noise due to the Cisco development spinout transaction that concluded in Q4 and a little bit of the consolidation around that. But when you take into account some of those onetime items, many of which were non-cash oriented or also disproportionately picked up by Osisko development, we get to a point where we're quite happy with the quarter that we're coming out of today. And again, Fred will go through that in a little bit more detail. We did acquire, buyback some shares at the worst of COVID. So we did buy back some very cheap stock during the year for a total of about just under $4 million.

And we declared quarterly dividends, summing up to $0.2 a share, still the highest yield in our peer group and something that's very important to us as we go forward. With no disrespect to the accountants among us, I think, more importantly, than any of the noise in the financials is the fact that the business is in excellent shape as we ended 2020 and as we start 2021. Our producing assets are outperforming almost without exception. Our development assets are advancing steadily. Our exploration or earlier stage development assets as well are delivering several positive surprises and we expect that to continue to happen as more and more exploration dollars are being spent in this sector after several years of restrained spending on that side. We expect that catch-up to benefit our portfolio quite disproportionately. And then again, Q4 marked the end -- the last quarter of our spend on Barkerville, our direct spend on Barkerville.

That was a finite period of time and lasted between the North Spirit transaction to the Osisko development spinout the year and certainly created a lot of value in the process. Skipping over to slide four. To finish that thought, 2020 was an important strategic year for us. The culmination of that North Spirit transaction into a Osisko development within the span of roughly a year. And again, as I said, creating a significant amount of value that we now look forward to getting the credit and value for. Since that's been out Sean at Osisko development has raised circa $250 million to unlock a significant amount of value in that asset base for the benefit of Osisko development, but also the benefit of OR and we look forward to that process continuing as that public company has really just gotten on its feet here at the start of the year. In that process, we also acquired, as you all already know, the San Antonio Gold project were the stream on the San Antonio Gold project in Mexico.

From my perspective, that's the cheapest 9,000-ish outstream I've seen anyone collect anywhere. Obviously, that asset needs to go through permitting in Mexico. And the team is pushing that forward substantially out of Osisko development. But what we see there on our stream is the upside potential Osisko development has already acquired a crushing circuit that can run about 15,000 tonnes per day. If you start to talk about those types of run rates or anything close to it, it's a substantially higher stream than what we've been talking about. So we look forward to that coming into the midterm of our pipeline. Also throughout the year, we did some other things that we think added significant value. We improved the silver stream on Gibraltar at the right time. That mine continues to now benefit from significantly higher copper prices so we're happy with our added exposure to Gibraltar. We also acquired an additional 15% of royalty package that we already own. Predominantly on the island gold and Mamac mines.

So adding to our royalties in those two mines. I think it's safe to say it was good timing. And both of those are now going through some pretty important exploration and expansion phases. We also announced a strategic partnership with Regulus, whereby we added a significant royalty that paid for that transaction off the bat on what is a large asset today, one that's only getting bigger. And ultimately, we think, a large company asset in a pretty important copper price environment and also gained exposure to additional royalties that they may buy back over time. And as you all know, concluded the financing with the Messman Quebec in April, it was done at a premium during the worst of COVID, so strong endorsement from our partners there. If you move to slide five. Just a recap of the producing asset base. Again, I'll reemphasize that it's doing extremely well. Some of you cover on the analyst side. I'm sure some of you cover these other names.

You've been picking up on the positives that have been coming out of their Q4 disclosure, their resource update, some of that's already come out, others yet to report. But almost across the spectrum, we're seeing good news, starting with, obviously, on our flagship assets at Canadian market where -- that line has gone from open pit toward the end of this decade to now talking about production 2039 plus, plus. So we look forward to our flagship assets, being our flagship assets for decades to come. And I'll pick up on some other positive advancement a little bit later in the document. And then you see a split of our production for 2020 by commodity as well. We are gold and silver dominated. That's a core part of our portfolio. And for anybody that has a Reddit blog, feel free to point out the level of solar contribution that we had of about 24% within the company in 2020. On slide six, just a little bit more on where we've come from and I guess where we're going. You'll notice the production annuals for 2019, 2020 and then our guidance of 2021, ranging between 78,000 to 82,000 ounces, so midpoint of 80.

And again, still expect it to be the highest cash margin in the business when you exclude the optics. I think it's worth pointing out, though, it feels -- it might feel like that's getting back to 2019 levels. But I would remind everyone that our 2019 production included a significant amount of Boost Jack contribution. That stream and offtake was bought back. We got paid for it, but it did take down our production levels. It also included Renard, which we're now intentionally keeping off to the side until we can fully benefit from those cash flows. So taking that into account, in 2020, we're back at the same level of production with those ounces gone. And with many of our mines shut down, and now we look forward to kind of a 20% increase, whether you look at 2019 or 2020 off the same asset base. So a fair bit of growth to compensate for those other factors.

And then more importantly, as you look to the right, some significant assets that are in our pipeline that are maturing, coming along at a pretty steady pace, I would say, all, maybe with one exception here moving forward steadily, and we look forward to this paid for growth coming to the company. Especially at a time when new transactions in the sector on the royalty and streaming side have gotten, I think it's fair to stay more expensive. And as a result, a little bit riskier, we look forward to this pay for pipeline site to deliver for us. In the guidance numbers for 2021, I think we made the point in the press release that Mantos has gotten deferred a little bit. We're talking about a few months delays when you take into account COVID, I think that's frankly pretty de minimis. So it doesn't bother me in the least that, that Mantos expansion has been pushed into 2022 as opposed to catching some of 2021. I think people were news is all of this is still in front of us and all of it's still progressing quite well.

With that said, I will pass it off to Fred on slide seven to walk you through some of the more detail-oriented aspects of the quarter, and then I'll pick back up thereafter. So Fred?

Frederic Ruel -- Chief Financial Officer and Vice President, Finance

Thank you, Sandeep. [Foreign Speech] Good morning, everyone. Thank you for joining us today. As you know, busy year for Osisko with COVID, where some operators shut down or reduced their operations mostly last spring. And of course, the completion of the RTO transaction in November, creating Osisko development who raised over $250 million in the last month. We earned 18,829 GEOs in Q4, excluding as Sandeep explained, the GEOs earned from the renal diamond stream in Q4 for a total in 2020 of over 66,000 GEOs, exceeding our revised forecast. In Q4, we generated record quarterly revenues of $48.8 million from royalties and streams, operating cash flows of $39 million and an operating cash margin on our royalties and streams of 94%. An amount of USD15 million was also repaid in Q4, to a credit facility.

As presented under slide seven of the presentation, we recorded record revenues from royalties and streams of over EUR156 million last year compared to $140 million in 2019. Cash flows from operating activities reached a record $108 million compared to EUR92 million in 2019. If we go on page eight, we have a summary of our earnings and adjusted earnings. Net income was $16.9 million or $0.10 per share compared to a net loss of EUR224 million in 2019. The last, in 2019 was due to significant impairment charges. Adjusted earnings were $43.7 million or $0.27 per share compared to $41.9 million in 2019. On slide nine, we present our quarterly and annual results. GEOs from gold and silver production were higher in Q4, as all mines have returned to their pre COVID level. GEOs from diamonds have decreased. As I said, we are -- we have excluded the GEOs from the renal stream starting in Q4.

Revenues increased in Q4 from $51 million in 2019 to $64.6 million in 2020. And you'll note a decrease in our annual revenues, but this was due to the sale of the Bruce jack-up stake in September of 2019, which was partially offset by a higher realized price on gold and silver. Our average gold price per ounce sold amounted to CAD2,444 in Q4 2020 and $2,273 for the year, a significant increase over 2019. Gross profit for the fourth quarter increased to $32.8 million, up from $23.9 million in Q4 2019. For the year, our gross profit was $104 million, up from $83 million in 2019. Our net cash flows from operating activities reached $32.6 million in the fourth quarter of 2020 for a record EUR108 million for the whole year, up 18% compared to the previous year. Our adjusted earnings in Q4 amounted to $12 million or $0.07 per share, reflecting a tax expense of CAD5.8 million or USD4.5 million on the acquisition of the San Antonio Stream. This tax expense will be paid by Osisko development in Q1 of this year, but is, of course, included in our consolidated results for 2020. Excluding this onetime tax expense, adjusted earnings would have been $17.8 million or $0.11 per share.

I'd like to remind also that additional expenses of approximately $4 million related to the RTO transaction are included in our operating expenses in 2020, including a noncash listing fee of $1.8 million. These expenses were shared between Osisko royalties and Osisko development but are all included in our consolidated results. These expenses were, of course, onetime items. If we go on page 10 of the presentation, we present a breakdown of our cash margin for Q4 and the whole year. The cash margin on our royalties increased in Q4 to reach $34.3 million compared to $26.3 million the previous year. For 2020, the cash margin on royalties reached $111 million, an increase of $14 million compared to 2019. And the cap margin on our streams amounted to $11.3 million in Q4 and $36.3 million for the year, up from $9.1 million and $29.5 million, respectively in 2019. Resulting in a cash margin on our royalties and streams of 93.5% in Q4 and 93.9% for the whole year of 2020. Our total cash margin reached $46.3 million in the fourth quarter, $10.6 million higher than the previous year.

For 2020, our total cash margin reached EUR150 million, an increase of EUR20 million. And finally, if we go to slide 11, you will find a summary of our financial position. Our consolidated cash balance was EUR303 million at the end of the year, including $105 million for Osisko Gold Royalties and EUR197 million for Osisko development. Osisko Gold Royalties held investments having a value of $216 million at the end of December, in addition to our investment in Osisko development, valued at over EUR750 million, for a total of $1 billion in value. Our debt amounted to $400 million on December 31, we have repaid an amount of USD15 million in Q4 under our revolving credit facility. In Q1 of this year, we have also repaid our $50 million debenture with Adesto Quebec using our credit facility, therefore, reducing our interest payable by approximately 1.5% on that debt. Including the accordion available, our credit, our available credit on the facility is over EUR285 million as of today.

Back to you, Sandeep.

Sandeep Singh -- President, Chief Executive Officer and Director

Thanks very much, Fred. Skipping forward to slide 12, and obviously, Fred will be around for any detailed questions thereafter. Moving to slide 12 and picking up on Canadian Malartic. Obviously, our flagship asset is doing exceptionally well. From an open pit perspective, based on guidance provided by the operators, we're expecting our best year yet from the open pit, obviously benefiting from the higher grade contributions of Barnett. So expecting north of $35 million, almost 30 -- sorry, 36,000 ounces of GEOs when you account for the silver contribution as well. And the biggest catalyst there and the biggest catalyst in our portfolio, obviously, would be on slide 13, the underground construction decision by Agnico and Yamana, as well as the first set of economics underpinning that put out just a couple of weeks ago. Huge catalyst, I think it's fair to say for us. We've had a flagship asset that was finite in life.

Otherwise, 2027, '28, '29, whatever people's expectations were of the open pit mine life. That's now turned into two decades plus. Importantly, only with 50% of the reserves and resource that amount to about 14.5 million ounces right now, embedded in that mine plan. So still a lot of upside to come based on everything we're hearing from our operating partners. Added to that, that upside, I think, seems disproportionately on the East Goldy Zone, where most of the current ounces are 11 rigs focusing on that area. Almost this year, double the amount of the expiration that's been put into the asset to date in aggregate. So we still expect a lot of potential positives to come from that. We're missing a little bit of detail between what falls on -- what falls within our 5% and 3% ground on East molar Tic. But I think with a little bit of accounting for that, you can kind of approximate a 4.5% NSR overall for us on the entire project.

So can't underscore the importance of that, our flagship asset has essentially doubled in value, more than doubled in duration, and we look forward to continued positive news on that front. If you flip forward to slide 14, our other significant producing assets, I'd say, doing quite well at Mantos, the expansion we're now expecting to tie in at the end of the year. So we haven't given ourselves really any credit for that in 2021. But again, I think delays measured in a matter of a few months when it comes to COVID in South America should be seen as wins. So we look forward to that significant increase in silver production to kick in for us next year and every year thereafter. On the Eagle side, quite happy to see a positive fourth quarter for Victoria gold, for production was up over 42,000 ounces, a 20% increase over Q3. Again, I don't want to sound like a broken record, but we didn't get the benefit of that in our Q4. Obviously, we always have a bit of a delay. So we look forward to that ramp up continuing to benefit us and the operator. They're into the coldest winter month, so they have been for some time now.

And as per plan, not stacking as a result, but completing, importantly, much of their optimization efforts during that time frame. So we look forward to continued step-change improvement from Eagle. And much like everywhere else in our portfolio, there's a lot of positive exploration results they've already put out, and we look forward to that trend continuing. On Eleonore, I'd say steady state or, frankly, slightly better than study states that they had guided toward, which was 250,000 ounces per annum, guidance of 270,000 and returning focus on exploration. I read through a fairly positive exploration tone to their last set of disclosures. So we look forward to that starting to benefit us and the mine. But frankly, steady state after the last couple of years of Elanor, I think, is also considered a win from my perspective, at least. On slide 15, I won't go through all of these next pages in detail, but I think they're available if we want to come back to any specific questions on assets. Importantly, I said it before, I'll say it again, the producing assets could not be doing better as a whole.

We see positive news across the spectrum on this page. I'll pick up Island Gold only because Alamos as the most recent to put out results. And Island continues to get bigger. Reserves increased, resources increased significantly, further justifying that expansion that they announced last year, which, to remind people, is about a 70% increase in ounces. And we benefit from that on our 1.4% royalty ground. But importantly, a lot of the recent exploration results to the East and at depth are on to our 2% and 3% royalty ground, a significant portion of what we can see in that new inferred category that's almost 15 grams per tonne, is on to our 2% or 3% royalty ground. So that is a significant asset getting better all the time. And I believe there's a 25 -- circa $25 million budget plan for this year and the commentary from Alamos has been excellent in terms of potential for further growth. That's one example I think that story is playing out across the spectrum. On slide 16, in terms of the growth assets and development assets, I should say, again, all of them progressing quite well, all of them moving forward, at least on this page.

We look forward to a lot of catalysts on the Osisko development story, which comprises, obviously, as everyone knows, Caribou in San Antonio. We'll get a little bit of -- we'll get small production, I guess, from each this year, from the satellite, the Caribou as well as from a stockpile at San Antonio, but those are not the more important facets of either of those stories that it's nice, but obviously, we expect the focus within those -- that company to be on the larger projects at Caribou and San Antonio. Importantly, as we said earlier, Sean and the team there are exceptionally well funded right now to push hard, and we are entering into a catalyst-rich phase for Osisko development with respect to drilling, resource updates, studies and permitting. So we look forward to that news flow this year. On windfall, which is an Osisko mining flagship asset in Quebec, a pretty unique combination of grade and size, with the total resource now up at six million ounces based on their last report. M&I of about 1.9, I believe it was inferred the rest of the way to get you to six.

And the grades continuing to, if not state steady, frankly, improved. So we look forward to not only continued exploration results there, continued infill drilling that will increase that M&I, culminating in a feasibility study and advancement of that project. And even on Horn five, which is a significant resource, six million ounces of reserves, gold equivalent, circa 10 million ounces of resources. We get eventually the silver off that mine, which is obviously increasingly more valuable than what we've modeled in the past. It's an important year for Felco. They've made good strides at Glencore last year. We look forward to that trend continuing and then breaking the back of a path forward for that mine. On slide 17. Again, I won't go through these individually, but just other large assets that are moving forward in Hermosa.

We look forward to a pre-feasibility study from South32 there, which will optimize across some fees in terms of the understanding of that deposit and the path forward for it, but it's the one of, if not the best, undeveloped polymetallic assets in the world. Pine Point as well, moving to maybe some of the boring phases of mine development, the phases that matter, and we look forward to that continuing this year. And then on Renard and Valstar, we talked about them quite a bit. I'm sure we'll talk about them again later on. But two big option value assets for us. We're a year into those kind of restructuring phases. And I would say on both, frankly, ahead of where I expected to be within a year. On the diamond side, diamond prices for Renard have bounced back to $80 a carat so far north of where they were pre shut down. I think the -- safe to say the Argo shutdown, the removal of 15% of diamond supply globally is starting to play out. And importantly, it's not just for Renard, it's across the space.

So hopefully, that diamond sector becomes a little bit healthier, which can only benefit Renard. And then on the Malar, we say you're half -- more than half built, but it's significantly more than half built there. The trick is access and a path forward. But the team on-site has had unfettered access to the site for months, the government wants to think, to see that asset go forward. They certainly need foreign direct investments. So we look forward to, hopefully, some progress on that, if not this year. On slide s 18 and 19, we have kind of other layers of earlier-stage assets or in some cases, earlier stage assets to talk about. I won't go through them. The point of this is, and it's frankly not exhaustive. These two pages. The point of it is, it's a really deep portfolio, and it's getting a significant and increasing amount of exploration dollars spent on it. And it's proving itself across the board. So we look forward to continued success by our operating partners on those fronts. Maybe on slide '19, the one or two that I'll pick out.

To talk about El Dorado, we have the 1% NSR on the Lamac mine, seeing a maiden resource as significant as it was at Ormac, about 800,000 ounces of just shy of 10 grams. Within a year of discovery hole, if I'm not mistaken, that's a positive, especially when you take into account that the mill there at Sigma is quite under fed. And certainly, there's ability to increase capacity. So we look forward to that story playing out. And then Eldorado's proposed acquisition of QMX, I think also benefits us as we have not a 1% NSR, but a 2.5% NSR on that ground and look forward to increased exploration work by Eldorado once it's in their stable. I think I'll pause there, except to say that for a recent year, 2020 worked out quite well. In my mind, a lot of advancements. The portfolio is doing quite well. We remain focused as we start 2021 on getting paid for that existing portfolio.

There's a lot of value within it that we don't think we're currently getting credit for. And that is our main priority. We'll remain disciplined thereafter and try to pick our spots in terms of improving it. But we think we did a lot of the hard work in 2020. I think many of you have heard us say that -- heard me say that. And I think I think we have a lot of room to catch up this year.

So with that said, operator, happy to take questions.

Questions and Answers:

Operator

[Operator Instructions] [Foreign Speech] The first question comes from Cosmos Chiu from CIBC. Your line is open.

Cosmos Chiu -- CIBC -- Analyst

Hi, thanks Sandeep, Fred and team. Maybe my first question is on your 2021 guidance here. It's certainly good to see that it's increasing by quite a bit from 2020 levels. But can you give us a bit more color in terms of how it could look like on a quarter-over-quarter basis? The reason why I ask is, Sandeep, as you mentioned, for example, the Eagle mine here. Right now, it's in the coldest months, not stacking. But at the same time, we didn't really get the full benefit out of Q4, given that there's timing differences. So how should we look at it in terms of, I guess, more specifically, Eagle and how that could impact your overall production quarter-over-quarter. Are we expecting lower in the first few quarters and then higher in the later quarters? Could you give us a bit more color, Sandeep?

Sandeep Singh -- President, Chief Executive Officer and Director

Sure. I can try, Cosmos. Look, I think that's a fair assessment. But I think overall, we didn't get the benefit of that Q4 number, so that will drift into Q1. There's always -- I mean, it happens on all of our assets. There's a bit of a lag in terms of when ounces are produced and when we get them from the refineries. At the end of the day, I think that generally tends to wash itself out. Eagle is one exception where as it's starting to get to its full run rate, we'll continue to have that story play out, that short delay. So you're right, there may be a little bit of volatility.

But overall, I think even with the colder months here and the lack of stacking, I think there's been a lot of improvement at the mine. I think they've taken the opportunity to, whatever you want to call it, debottleneck or work on their optimization efforts. So hopefully, there isn't that kind of that dip after Q1 into Q2, and we see continued improvement toward the end results. So it's premature for me to say because it's not in our control, but I do look forward to maybe a little bit of variability on that one quarter-over-quarter, but generally, I expect that variability to be positive, if that makes sense.

Cosmos Chiu -- CIBC -- Analyst

Yes, for sure. And then, Sandeep, can you remind us what's the usual lag here at Eagle? And when would you expect them to start stacking again at the mine?

Sandeep Singh -- President, Chief Executive Officer and Director

Yes. So maybe I'll take the other -- the second question first. And Fred, I don't know if you have a specific answer month wise, off the top of your head on Eagle. But I would say, soon, in terms of stacking again. I don't know if that -- when that means, if that means in March. I remember it was a 90-day proposed shutdown from a -- just a stacking perspective, they continue to mine minus the coldest days where they're worried about just inefficiencies of trying to do things. So I would suspect they're probably most of the way through that, maybe that carries into a little bit of March, but that's -- it's a 90-day period of the coldest part of the year. So I'm speculating a little bit, but I think it's pretty fair to say that we're through most of that by now. And Fred, I don't know if you have an answer, if you don't, we can get back to Cosmo. But do you have an answer in terms of the typical delay, month wise at Eagle?

Frederic Ruel -- Chief Financial Officer and Vice President, Finance

Well, I would say it's between one and two months, usually. You see -- we receive, for example, a good delivery on January 4, 2021. That was, of course, related to production of end of November and December. So sometimes, there is this one-two month delay, that can create some volatility between one month to another -- one quarter to another. But that's usually within one or two months that will receive our delivery for the royalties for the mineral piece.

Cosmos Chiu -- CIBC -- Analyst

Great. Just -- maybe switching gears a little bit here. Sandeep, as you mentioned, one of the highlights, many highlights, I guess, but one of them is the Alamos and their discovery or the increase in inferred ounces here at Ad and gold. So my understanding is that a lot of those inferred ounces, higher grades came from Island Gold East. Just to confirm, as you mentioned, I guess, you are -- the NSR over there is higher at 2% to 3%?

Sandeep Singh -- President, Chief Executive Officer and Director

Yes, that's correct. And look, I think it's tough to say exactly. We have our own views, but they're based on our views. But I think definitely, as you go to the East, you get into our 2% ground. As you go deeper, including some of the deeper inferred ounces that are currently in the mix, you get into both our 2% and 3% ground. So we have our internal views as to what that averages out to. But at the end of the day, what it is, is positive.

Cosmos Chiu -- CIBC -- Analyst

And I understand that Adam has recently acquired Trillium Mining, which is again, do even further east than Island Gold East. Do you have any kind of royalty on that ground, by any chance?

Sandeep Singh -- President, Chief Executive Officer and Director

Not to my knowledge. I don't think we do. I think it's a pretty fair assessment to say that we don't. But I think overall, I think all of that is positive. For the most part, I think what we're seeing for Alamos, dating back to their acquisition of one of the other royalties that was on the ground, the exploration effort they put into it, they keep breeding results. The $25 million roughly, I believe it's exactly but roughly $25 million exploration budget this year. That acquisition of other ground in the area, just shows the importance of that asset within the portfolio. It's obviously working out exceptionally well for them. And we hope that continues overall to their benefit, obviously, disproportionately, but also for ours.

Cosmos Chiu -- CIBC -- Analyst

Of course. And maybe going to Eldorado's Lamac, as you mentioned, they made a recent -- they made the discovery last year, actually, but the inaugural inferred resources at or Mac here. I think if I look at it, some of the further of course, they're still expanding or Mac, but they're also looking at new sort of areas. Fortune is one. They're also looking at the area between or Mac and the parallel zone. I just want to get a better understanding in terms of your ground for that royalty here. And would it include everything that's expansionary at Ormac and then also at some of these new zones as well, like Fortune and this area between Ormac and the parallel?

Sandeep Singh -- President, Chief Executive Officer and Director

Yes. Look, I can definitely go back to double check for you, Cosmo, and if I misspeak, I'll correct myself. But I think the answer is yes. On the 1% ground? And then what is incremental to that is the 2.5% ground that we have on -- it might -- it has a little -- I think it misses a couple of post-it stamps, but on the QMX ground, particularly, it's 2.5% on everything of consequence, including the Bonafont area. So I think it's pretty safe to understand it as 1% on everything that Eldorado has today and then 2.5% on anything they acquire through Q Max.

Cosmos Chiu -- CIBC -- Analyst

And then Sandeep, maybe if I can, one last question here. As you mentioned in your opening remarks, you talked about looking forward to higher gold and silver prices, which is great. But in that context, can you maybe comment on how that could potentially impact the overall sort of new streaming, new royalty financing acquisition market? And then maybe bigger picture, how is that market right now?

Sandeep Singh -- President, Chief Executive Officer and Director

Sure. No, it's a good question. It's -- and we've talked about it Cosmo. I think I probably talked about it with many of you on the phone. Look, I think it's safe to say, I said it earlier, the market for new transactions, that has gotten tougher. I mean, with equity markets open, with debt available with new players on the smaller end, private equity's very active on the on the middle to larger end, operators buying back royalties in significant ways in 2020. If you think about Alamos' acquisition, you think about Newcrest on Lundin Gold. So I think it's -- anyone who tells you there isn't more competition in the sector is lying. So I think that's fair. It happens in the sector. I mean, it ebbs and flows. There are certainly periods of time when our capital as a royalty company is more required and you have to wait for those moments, I think, is our view.

I'm certainly happy that Sean and the team have been investing in growth -- building this portfolio over the last seven years. Such that we have so much growth that we've already paid for in lower commodity price environments that we can benefit from. Not only that we can benefit from as it comes online, but also that more open equity markets can push those assets faster than they've been pushed in the past several years. I think it -- does it make it more competitive? Yes. At the same time, does the pie grow when new assets are advanced, and new assets are constructive, it does. So I think, generally speaking, there's probably been a lack of equity dollars to fund many of these projects. There's an overreliance on debt and streaming, which can benefit us as royalty and streaming companies, but it can also hurt us when things go wrong. So I think finding the right balance within that and having generally more equity dollars in the mix is a good thing.

It's certainly a good thing for our portfolio, the way it's constructed with as much growth as we have on the come in the next several years. And because of that, we can afford to be, I think, a lot more disciplined, maybe more disciplined than anyone in our sector right now. I certainly wouldn't want to be building a portfolio from scratch. I'm happy we have the one review.

Cosmos Chiu -- CIBC -- Analyst

Great. Thanks, Sandeep. And those are the questions I have. Looking forward to the remainder of 2021.

Sandeep Singh -- President, Chief Executive Officer and Director

Thanks so much Cosmos.

Operator

And the next question comes from the line of Jackie Pryzybylowski from BMO Capital Markets. Your line is open.

Jackie Pryzybylowski -- BMO Capital Markets -- Analyst

Thanks very much. I just have one question, I guess, more strategic for you. You mentioned this at the beginning. So I just wanted some clarification on your North Spirit division. Now that you restructured with ODV, is North Spirit still something that's active and separate for yourselves? Are you still pursuing that avenue with private equity? Or is that sort of a mission that's been accomplished with the creation of ODV?

Sandeep Singh -- President, Chief Executive Officer and Director

Thanks for your question. No, it's the latter. And hopefully, we were clear with that when we did it. I mean, North Spirit was the working name, I guess when the transaction was announced in the fall of 2019. North Spirit, in our mind, was renamed Osisko development Corp. and started life in the fall of 2020. So yes, that's very much North Spirit reincarnated, if you will. I think -- so that hopefully answers your question on that front. Tangential for that, if the question is, are we still looking to do traditional accelerator type business. I think I've been pretty clear with everybody that, that business has been in its purest form, wildly successful for us, not only on a financial perspective. But also in terms of building out the pipeline.

So if we can find -- continue to find avenues to deploy $5 million or $10 million to turn them into 50s and hundreds and take back valuable royalties without competition or with far less competition as opposed to having to pay up for them, picking up on the last conversation we had. I think that's something we'll look to do all day long. The gating item on that is noninterest. It's availability of assets that we actually like. So on the bigger end, to your point, we found the right home for Barkerville. That was always the intent when we now see transactions. It was to put that right -- put that back into the right vehicle, so that it had value for us. That value, I think, is undeniable in terms of how it's gotten created. And we -- we're happy being back in our lane, so to speak, as a royalty company.

Jackie Pryzybylowski -- BMO Capital Markets -- Analyst

Yes. I guess you answered it exactly. I guess I was kind of wondering if you would use that North Spirit vehicle to do other accelerator model type transactions. But I think you've answered that perfectly. I think Cos covered off my other questions. So I will leave it there, and I'll talk to you next week.

Sandeep Singh -- President, Chief Executive Officer and Director

No problem. No problem. Look forward to talking next we check.

Operator

And the next question comes from the line of Ralph Profiti from Eight Capital. Your line is open.

Ralph Profiti -- Eight Capital -- Analyst

Hi there. Good morning everyone.

Sean Roosen -- Osisko Gold Royalties Ltd

Good morning Ralph.

Ralph Profiti -- Eight Capital -- Analyst

Can you hear me?

Sandeep Singh -- President, Chief Executive Officer and Director

Yes. I can hear you. It sounds like you're in a tunnel or something, but I can hear you if you speak up.

Ralph Profiti -- Eight Capital -- Analyst

Okay. I'll do that. I want to come back specifically to the 2021 guidance. And maybe we can exclude Renard because there seems to be some good disclosure on the potential contribution. But maybe, Sandeep, can you can you tell me which assets you're comfortable seeing that there's upside versus current expectation and with for out performance versus guidance? Because there seems to be a fair amount of conservatism baked into the 2021 guidance? Is it from Mentos where you could see some contribution where there's none?

Sandeep Singh -- President, Chief Executive Officer and Director

Sure. Happy to do that, Ralph, to the extent I can, obviously. Look, I think conservatism is probably a fairer word. And it was intentional. I think with Mantos, we -- for our guidance perspective, we kicked that into next year. I just didn't feel it was worthwhile trying to cribble about a month here or there. Initially, confident phases. But initially, that expansion was due to get completed midyear. And then as soon as COVID hit, normal, just normal -- sorry, this buzzing is distracting. But normal construction delays plus -- thank you so much, COVID-related delays push that to the end of the year. I think saying at the end of the year and getting the benefit of it in 2022 is fine by me. I think we've also been a little bit conservative on the Eagle side. Last year, we, like everybody else budgeted more and didn't receive it.

So I think we've taken a slightly conservative track on that side. And hopefully, there's some upside there. And then also on things like San Antonio, we've said really only given ourselves the benefit of a trickle of stockpile production really at the end of the year. The prize there is the bigger asset. But despite the desire and what's happening is pushing out for or debt pushing that asset forward faster. It's still reliant on Mexican permitting and bureaucracy, which within COVID, I think you've probably seen throughout the sector has gotten pretty delayed. So I think, overall, we've taken the tax, including with Renard, I mean we took the decision last year that until we're getting paid for those ounces, it's unfair to put them in guidance.

So we've tried to take a conservative approach to everything. Hopefully, when that asset comes back and we are getting paid on it, it's a positive net surprise as opposed to something we're putting out there and then trying to chase it. So I don't know if that answers your question directly, I probably answer directly as I can, but that's the path we've taken. And I think it probably serves us well.

Ralph Profiti -- Eight Capital -- Analyst

Understood. Well, that's great. I appreciate the color. Thank you.

Sandeep Singh -- President, Chief Executive Officer and Director

My pleasure.

Operator

And your next question comes from the line of Trevor Turnbull from Scotia Bank. Your line is open.

Trevor Turnbull -- Scotia Bank -- Analyst

Yeah, thank you. Sandeep, just a follow-up on San Antonio. And I may have -- you may have just addressed this with Ralph, but I didn't quite catch it. Did you say San Antonio, there are a few ounces potentially coming through. But did you include that in 2021 guidance?

Sandeep Singh -- President, Chief Executive Officer and Director

I did. And maybe I'll let Sean speak for San Antonio himself as opposed to me paraphrasing for him. But even if we did, which we did, Trevor, it's small, that's not the larger production story there. So us factoring in a little bit of it this year does not change the answer all that much. But Sean, maybe if you're, if you're on, you can pick up on kind of the general plan for San Antonio as it were.

Sean Roosen -- Osisko Gold Royalties Ltd

Yes, so I mean, we expect a little bit of production at San Antonio this year according to where we sit right now. From the existing stockpile is about 1.1 million, 1.2 million tons of stockpile that we hope have under irrigation sometime in Q4. And it's mostly oxide, it's at least fairly quick. But I don't anticipate it to be a big contributor this year. But certainly, 2022 looks like a great year for the development there as we're also pursuing the permit for the larger Saputi project. We have the necessary permits for the stockpile now. But the big kahuna here will be to get Saputi itself under each which we hope to be able to build next year. And we've already secured a 15,000 tonne a day crushing and screening circuit from the Britannica mine for that purpose, and we're shipping that to Mexico as we speak.

Trevor Turnbull -- Scotia Bank -- Analyst

And I think you just answered the second part of my question, Sean. So the permit's only for the larger project. And what you have on the stockpile that you'll be processing toward end of this year is not dependent on getting that permit or kind of getting delayed by COVID?

Sean Roosen -- Osisko Gold Royalties Ltd

No, it's already mined that stuff. The big thing about the stockpile is we just have to restack it on a purpose-built leach pad. So it's basically load haul screen and a little bit of crushing. And hopefully, the equipment that we have in hand now, we can set that up and get that running as I say for Q4.

Trevor Turnbull -- Scotia Bank -- Analyst

Okay, perfect. And then I have a bit of a financial question. And I guess, in some ways, it's also related to San Antonio. You did mention, I guess, Fred and Sandeep both talked a little bit about the noise related to the transaction and how that's come through on the consolidated financials. Going forward, do you think there's much noise left to shake out? Or will things be a little bit clearer other than the fact that they're consolidated in future quarters.

Sandeep Singh -- President, Chief Executive Officer and Director

Maybe I'll start, Fred, and if I miss something, you want to add, feel free. I'd say certainly, we think it's mostly behind us, Trevor. I think the transaction itself was pretty complicated, had a lot of facets to it. So that's all been factored into our Q4, for the most part, if I'm missing something, Fred, you can contradict me. But going forward, we do see clearer lines from that. We tried to incorporate as much of that as we could in Q4. And yes, there'll be continuous ongoing noise with respect to the royalty business and the mining business, we've done in these several financials and the MD&A, our best first effort of trying to separate that for you as analysts and investors, and we'll continue to do that and hopefully get a little bit better at it, smarter at it as we go. But that's certainly the intent, Trevor. Fred, did I miss anything?

Frederic Ruel -- Chief Financial Officer and Vice President, Finance

No, no. I mean, of the all costs related to the RTO, these onetime items were accounted for in 2020, and we are not expecting any additional costs related to the transaction in 2020.

Trevor Turnbull -- Scotia Bank -- Analyst

And Fred, you -- I know you commented on this earlier. But specifically with respect to Q4, what was the tax impact you said from San Antonio, kind of on the earnings in Q4?

Frederic Ruel -- Chief Financial Officer and Vice President, Finance

Yes. That was -- it was a tax payment of USD4.5 million. In Mexico when there's -- because if you recall, the transaction was done just prior to the RTO, while Saputi, which is holding the San Antonio project was still a direct subsidiary of Osisko Gold Royalties. It's now a subsidiary of Osisko development. It's still being consolidated. But the project was within Saputi and when Osisko Bermuda, our subsidiary, acquired a stream from the San Antonio project for USD15 million. There's a 30% corporate tax in Mexico and the treatment of a stream when you are receiving the deposit in Mexico is different than in Canada.

In Canada, the taxes and that revenue will be deferred to the moment that you will produce the ounces. In Mexico, it's taxed on day 1, so generating a USD4.5 million payment in taxes and cash tax that will be paid in Q1, but of course, it will reduce the taxes payable by Saputi when they will start their production. So it's like a prepayment of taxes if we want, if we compare to what would be the treatment in Canada.

Operator

And the next question comes from the line of John Tumazos John Tumazos Very Independent Research LLC. Mr. Tumazos, your line is open.

John Tumazos -- John Tumazos Very Independent Research, LLC -- Analyst

Thank you very much. The ODC restructuring was splendid, and you did everything you said you were going to do, better than you said you were going to. And you have all the progress outlined in some of your slides today, which are really very effective in communicating that the new resources and projects on the come. When OR first started trading in July 2014, the shares were almost USD15. And I guess the good news is that since July, August, gold price peaks, OR has gone sideways and the other leading royalty streaming companies have gone down 30%, 40%. So maybe ODC is effective in that regard. But my sense is that the market just can't digest all the progress you're making. Do you think there's another simplification you could do or a better way to help the market understand the 20 or 30 moving parts that are all moving ahead?

Sandeep Singh -- President, Chief Executive Officer and Director

John, look, thanks for your question. I mean, there's a fair bit to unpack there, so I'll do my best. I mean to answer a part of your question, we missed out, we feel like we lost ground, obviously, in the fall of 2019 from a share price perspective, that's a given. And then we missed out on the run-up in the first half of 2020 as gold prices ran, gold equities ran. Despite that, in 2020, we still ended up being, I think, the second best-performing royalty company in the sector. Whilst I wish that would have been by us going up. It happened to be by us outperforming, as you say, in the second half by standing still. In what was a downdraft over the second part of the year or part of it, at least. I think the transaction we announced I would, all bias aside, agree with you, did more than most people probably would have expected of us when we started communicating our intent at the start of 2020, unlock a considerable amount of value that we can't argue with, given how much money, Sean has been able to raise on the Osisko development front to justify that value. Happened into a downdraft. Again, that same downdraft. We announced that transaction, I think it was October two or three.

We closed it December two or three. Generally a downward momentum from a gold price perspective and a gold equities perspective. But nonetheless, the value has been created. We certainly don't think we've gotten the credit for that or what's happening within our royalty portfolio. We're working toward that. Eventually, we will say and do enough to get the benefit of it. And really, at some point, I think that benefit will be undeniable. I mean, the assets are just working beautifully. They're making more money than they ever have for us. And at some point, that growth pipeline is going to kick in, in a bigger way than it already has. So those development assets that people are discounting pretty heavily become pretty tough to discount when they're actually hitting the bottom line. So that's ongoing. We'll do what we can, John, to fast track it. I think 2020, we did the hardest part of the restructuring. Obviously, we hear a lot about the ownership in Osisko development.

It was 88%. It's now 75%, without us having sold a share, but there's a lot of value that was created there. And as we've said, we'll be smart about how we can tap into that value. But those are the things that we can control. The portfolio that we can't is doing really well. So eventually, we do expect that to prove out. I mean this is a portfolio that matters in the sector. These are assets that matter. Our flagship asset was the best gold royalty in the business. It just got twice as good. So we do think we will go back and get better value for these assets, Jon.

John Tumazos -- John Tumazos Very Independent Research, LLC -- Analyst

Do you think it would help if you had a little real-time excel model for your stockholdings or yours and ODC stockholdings? Or do you think your attorneys would let you take some of the things you put on your slides, and have a model where someone could download the excel and put their own gold and silver and diamond prices and -- or click to include AML SAR and non AML SAR?

Sandeep Singh -- President, Chief Executive Officer and Director

Yes. Look, I mean your -- to the first part of your question, look, I mean, I think from a full GR and I think a royalties perspective, really, the two biggest chunks of value we have on the equity on the investment side are Osisko development and Osisko mining, to a lesser extent, Osisko metals, that's really it. So people can value those on a day like today, that's $1 billion of value. And a pretty paltry remainder for the royalty business. Even if you don't take market values at a given. Any kind of discount you want, you apply on that. The answer is still the same. The royalty portfolio deserves to be trading better than it is. That's the job we've set out for ourselves to undo. Your question's an interesting one. We're looking to do whatever we can to daylight the value of our portfolio. It's an interesting spot we're in. If you think about the larger companies in our peer group, they generally tend to have 80% or 90% of their value in the producing space in the producing side of their portfolio. So they're getting credit for 85%, 90% of their asset value.

If you look at the smaller companies, they have a handful of assets, a half dozen assets, whatever it may be. Everyone models every single one to the last dollar and they get full credit for that as well. Us in between, we have what is a pretty deep, meaningful set of assets, pretty deep portfolio, and 50% of it give or take is in the development category. So we're not getting the benefit of that in cash flow today, but it matters. And if you look to duplicate that portfolio, I don't know what it costs you today. I mean on these pages, wherever they are '16, '17 at the back of our deck -- or sorry, '18, '19, these are the types of things people are paying $50-plus million for in our market. And we have in our portfolio, and we don't talk nearly enough about them, which is also something that we're looking to rectify. So the good news is, the value is there, and we'll make sure we do a better job of daylighting it to people, different ideas on how to do that, John, are welcome and it will definitely give us some thoughts.

John Tumazos -- John Tumazos Very Independent Research, LLC -- Analyst

Thank you. Good luck.

Sandeep Singh -- President, Chief Executive Officer and Director

My pleasure. Thank you, John.

Operator

And your next question comes from the line of Adrian Day from Adrian Day Asset Management. Your line is open.

Adrian Day -- Adrian Day Asset Management -- Analyst

Yes, good morning. Listen, you just answered my question about the selling down of the development shares. But you just answered it. Thank you.

Sandeep Singh -- President, Chief Executive Officer and Director

No problem, Adrian. Good morning to you.

Operator

And your next line comes from the line of Puneet Sing from Industrial Alliance. Your line is open.

Puneet Singh -- Industrial Alliance -- Analyst

Hi, good morning. Just a quick one on asset upside. A question for Elanor. Because it's been a key royalty for you over the years. I guess, Newmont is still working through their assets that they got from Goldcorp. But I just wanted to see if you can provide some color on this. That plant at Elenor has capacity over 7,000 tonnes per day. In years prior, I think it was Goldcorp's plan to eventually build to that. Today, you are still operating well under that. Do you think Newmont builds up to that in the years ahead? Or where do you think they will eventually take the throughput on that asset?

Sandeep Singh -- President, Chief Executive Officer and Director

Look, I mean, it's hard for me to say. I think, rightly so, the first thing they did when they picked up that asset id kind of reset the bar, in my mind, a little low after a couple of years or however many years of expectations being set and then not met. And when you think about a new owner picking up an asset, I mean, wouldn't that be the right thing to do. So that's what we experienced first. We dealt with that last year. So a steady state year now, frankly, a little bit better than steady state is positive. Replenishing of reserves. It's positive. We're not seeing that happening, across the board, frankly, based on what I've seen so far in other people's disclosure. They did that at -- I believe it was 12 or maybe it was $12.5 gold for the reserves.

So still among the lowest in the sector. And frankly, their reserve categories are maybe the most stringent in the sector. So I feel comfortable about the baseline. Thereafter, how they work to improve that, time will tell. Seem to recall kind of a circa $10 million exploration budget for 2021, targeting some of the deeper material, but also looking laterally close to the surface. So we look forward to getting some updates there. I know they were positive about some of the regional targets they have, and there's just more activity in that area overall. So premature, and probably isn't fair for me to comment. But overall, I'd say we'll take steady state until things improve. It's a marked improvement over the last couple of years.

Puneet Singh -- Industrial Alliance -- Analyst

Okay, Sandeep, fair enough. Thanks.

Sandeep Singh -- President, Chief Executive Officer and Director

My pleasure.

Operator

And the next question comes from the line of Brian Macarthur from Raymond James. Your line is open.

Brian Macarthur -- Raymond James -- Analyst

Good morning. Many of my questions have been answered, but just a couple of things I want to follow up on. And I thank you for breaking out some of the consolidation, because you had said it does take some time. But you mentioned investments of $215 million time the ODB. And again, obviously, that's metals and mining. But if I sort of look at the market value, there's some other stuff in there. Is that the Falco convertible? Or is there another, back to Jackie's question about cleaning up the investments. I mean, it looks like there's another $20 million or something in there. Is that right? Or can you comment on that at all?

Sandeep Singh -- President, Chief Executive Officer and Director

No. Happy to, Brian. I mean, and I was maybe a little flippant in that remark. I was trying to get to the bulk of that value. And the bulk of that value is, obviously, Osisko development, the lion's share, Osisko mining and metals behind that. But we do still have small investments in stable resources, in Talisker, for instance, and that will kind of round out the rest, if you will. So both of those earlier stage, still in nature, still, we thought a lot of value to unlock in those names. Both doing positive things, just not to go off on too much with tangent, but Sable having entered into a joint venture with South 32, where we have a 2% saw on that ground in Argentina. So look forward to them being more active. So yes, I was a bit short in terms of the list, but the list is not much, much longer than that.

Brian Macarthur -- Raymond James -- Analyst

Great. And then the second thing, so you're excluding Renard, and I'm just trying to figure out how to -- I assume it comes into the financials, but you're putting the cash back into the company right now. Do you ever get that back? Like you obviously have security at the end of the day? Or how does this actually work? Should we just think about the 8,000 GEOs this year, we could kind of just -- it's gone. And when you get it working next year, we start to include it again? Or is there a catch-up in the future? Or how should we actually think about that, as you said, from a pure cash flow basis going forward? That's available to OR?

Sandeep Singh -- President, Chief Executive Officer and Director

Yes, so it's not money that's being evaporated, Brian. It's money that's being reinvested into the business and with the expectation of it getting repaid. So it's essentially a loan into the business. And we're happy with where we are. I have to say, going through COVID, I did not expect luxury mit to rebound as quickly as they have. So that's promising. I guess, maybe the whole world has rebounded quicker than many of us thought. So getting $10 a carat higher than we were prior to COVID, I think, is a good step in the right direction.

The fact that with the reinvestment by not just us, but all the streamers of the stream back in, they're not having to draw on the working cap facility, they're making a little bit of money, that's all good news. I think it's fair to say that we still require another step change up before we can start getting paid on our stream and getting back some of those historical reinvestments. So Fred, I don't know if there's any more detail you think is warranted, but that's how to think of it, Brian. It's not being evaporated. We certainly are keeping a running tally as are our partners and hope that with a bit more joy from a diamond price perspective, that can come back into the black.

Brian Macarthur -- Raymond James -- Analyst

Right. So maybe evaporate wasn't the right term. I was just -- it is a decent sized GEO at the end of the day. So that's -- I'm just curious when you start getting back to get the cash back out.

Sandeep Singh -- President, Chief Executive Officer and Director

Yes. Look, it's certainly chunky. And we are absolutely focused on getting value for that. So trust me, it's not a forgotten asset. We think it's not in our value in any way, shape or form right now, which is fair. But in terms of option value assets that can be turned back on. I mean, there's $1 billion of infrastructure, a good infrastructure that's gone into that diamond mine. Balance sheet and diamond prices just went wrong at the same time. But that diamond mine should be profitable before any other diamond mine is built anywhere in the world. And frankly, we're not seeing any pound that could be built. So we look forward to -- we're still not out of the woods from a COVID perspective. We're happy it's back where we started. We're happy we're up on a diamond price perspective so far. But we want to keep that as a positive surprise, hopefully, as opposed to sticking our necks out too far than having to justify it.

Brian Macarthur -- Raymond James -- Analyst

Great. That color is very helpful. Maybe just one quick question, maybe for Fred. I just want to confirm I heard this right. When I go through your financials and try and deconsolidate the ODV stuff, there's that income tax payable of $6 million, which I guess is Canadian. That's that $4.3 million you talked about to true-up the San Antonio deal, which you said ODB is paying? That's right. So again, it's not cash you're going to owe?

Frederic Ruel -- Chief Financial Officer and Vice President, Finance

No, you're correct. It's -- it's a cash tax payable by Osisko development in Q1 2021, not by Osisko Gold.

Brian Macarthur -- Raymond James -- Analyst

Thank you very much.

Frederic Ruel -- Chief Financial Officer and Vice President, Finance

You're welcome.

Sandeep Singh -- President, Chief Executive Officer and Director

Thanks, Brian.

Operator

And your next question comes from the line of Greg Barnes from TD Securities. Your line is open.

Greg Barnes -- TD Securities -- Analyst

Thank you. Sandeep, I just want to follow-up on Brian's line of questioning on Renard. Is it a question of diamond prices there? Or is there more work to be done on the cost structure? What is it that we'll get that into a performing asset for you?

Sandeep Singh -- President, Chief Executive Officer and Director

Well, I mean, I think it's obviously always both, Greg. So I'm not saying it's only reliant on diamond prices. I think the good news for us is we saw the team sharpen their pencils, especially during the extended Covet shutdown, I would call it, to make sure that the cost could be reduced. It's always one of those things, as a group of owners, you ask for people to sharpen their pencils and cut as much cost as possible, until it's absolutely necessary, and the answer is always, we're lean as we can be and then lo and behold, you find more. So I think the group's been doing a great job from that perspective. I think there's continued possibility to optimize that.

But I think it's fair to say that the biggest chunk of gain there can come off the back of diamond prices, for sure. And then that's always true with any mine, in any commodity cycle. The commodity price can do a lot more good for you than the opex. Obviously, we want the team to be focused on the opex because that's the only thing they can control. But we've already seen a good move. We -- after years of waiting for it, we saw our Argyle finally to the towel in. And that's significant, because that -- not only the 15% of diamond annual supply, it's also in the same -- very similar, I guess, quality and size fraction as Renard. So we look forward to continued uptick on that side. I think it's certainly possible and obviously, necessary.

Greg Barnes -- TD Securities -- Analyst

And just on the mall side, you mentioned that they have unfettered access back to the site again. Is there any kind of time frame that you could lay out on what could happen there?

Sandeep Singh -- President, Chief Executive Officer and Director

I mean, maybe I could, but I won't. I think it'd be reckless of me to do that. I think we are -- I certainly am positive, more positive than I thought I'd be a year in. It sound -- it seemed like a pretty desperate situation a year ago, Christmas time, a bit longer than a year ago. The truth is, that was a good to very good asset at $1,400 gold. It's a company maker at 18, and it's arguably 70% or 80% build depending on the minor step back you have to take to get going again. So I think it's an asset that matters. Armenia was in a tough spot, before COVID and before a war with Azerbaijan.

So I think this is always an asset that really the -- even the community wanted in large swaps, the government certainly wanted -- it's approved. The unfortunate aspects there are just the -- the pushbacks were really, largely artificial in nature, or it's a wrong terminology, but I think you know what I mean. So with that kind of out of the way, we look forward to some positive developments, but until they happen, I think it's tough for us to bang on the table and to talk about it. But I think if you look at the sector as a whole, certainly a ton of examples where if the asset is good enough and the asset is clearly good enough, there are people that decide to take another run at it. And this one, frankly, being as far advanced as it is, it's one of the few mines that can hit the cycle pretty quickly.

Greg Barnes -- TD Securities -- Analyst

Okay, great. Thank you.

Sandeep Singh -- President, Chief Executive Officer and Director

No problem, Greg. Thank you.

Operator

Your next question comes from the line of Jeremy Hoy from Cannacord Genuity. Your line is open.

Jeremy Hoy -- Cannacord Genuity -- Analyst

Hi, good morning, everyone. You guys have answered most of my questions so far. Just one quick one left on G&A. Previously, you guys had indicated with the ODB spinout that it would drop for OR with a significant chunk of the management team going over to ODB. Going forward, can we expect to see the G&A expenses for ODB split out? Or will it be consolidated? I know we touched on this earlier, talking about those, but a little more detail would be appreciated.

Sandeep Singh -- President, Chief Executive Officer and Director

Yes. Look, Jeremy, it's a good question. And I think that's a fair way to think about it going forward in terms of that division. I think you'll see a bit more segment information going forward. It didn't -- we didn't try to overdo it this time around, because we kind of owned -- we did own the assets all within OR for the vast majority of the year, 11-plus months out of the year. So we kept it a little bit simpler. But going forward, we'll do our -- we'll do our best job of being able to show you exactly what's happening on each side of the business because it's important to, obviously, each set of shareholders.

Jeremy Hoy -- Cannacord Genuity -- Analyst

Great, thank you very much.

Sandeep Singh -- President, Chief Executive Officer and Director

No problem.

Operator

And your final question comes from the line of Don Blyth from Paragon Capital. Your line is open.

Don Blyth -- Paragon Capital -- Analyst

May be little further on that consolidation accounting. Presumably at some point, when you allow your ownership to be diluted down, you will remove that consolidation? Would you do that when you dilute to under 50%? And secondly, if you still are under consolidation accounting when ODB is into production, would you have to report both ODB's gold and your share of ODB gold production and your attributable royalty production in your results?

Sandeep Singh -- President, Chief Executive Officer and Director

Yes. Don, look, the answer to your first question is yes. So obviously, at some point, we will not be consolidating. Again, we started out in December at 88% we're down to 75%. That's just based on dilution. Eventually when we're below. It's not exactly a bright line at 50, but you can think of it as such I think, reasonably closely. There's other determinants that go into it. So below that level, obviously, we will stop consolidating. I think that's obviously noise that everyone would prefer to not have.

And the second part of your question, the answer is yes, while we are still consolidating, and obviously, we will have to deal with that. I think, as I said, we took a good crack at it this quarter in terms of separating things for people. We will continue to do that, and Frank will probably get better at it. But well, I'll say, accounting is important. It's not what drives decisions, value matters, and we'll do our best to uncomplicate things. But the heading is value, and we're not going to lose sight of that. But hopefully, that answers your question, Don.

Don Blyth -- Paragon Capital -- Analyst

No, that's good. Again, I think part of your under valuation is a little bit of confusion. So anything maybe you can make to get it more simple, probably helps in long term.

Sandeep Singh -- President, Chief Executive Officer and Director

And that's completely fair. And it's not lost on any of us. So trust me, we're reminded that way. Operator. Were you serious when you said that was the last question?

Operator

It was. So this concludes the Q&A session. I would like to turn it over to you, Mr. Singh for conclusion remarks.

Sandeep Singh -- President, Chief Executive Officer and Director

Okay. Well, thank you for the time and the interest, everybody. I think we're useful to get that output and that back and forth with you. So thanks for your questions and your time, and have a good rest of your day.

Operator

[Operator Closing Remarks]

Duration: 78 minutes

Call participants:

Sandeep Singh -- President, Chief Executive Officer and Director

Frederic Ruel -- Chief Financial Officer and Vice President, Finance

Sean Roosen -- Osisko Gold Royalties Ltd

Cosmos Chiu -- CIBC -- Analyst

Jackie Pryzybylowski -- BMO Capital Markets -- Analyst

Ralph Profiti -- Eight Capital -- Analyst

Trevor Turnbull -- Scotia Bank -- Analyst

John Tumazos -- John Tumazos Very Independent Research, LLC -- Analyst

Adrian Day -- Adrian Day Asset Management -- Analyst

Puneet Singh -- Industrial Alliance -- Analyst

Brian Macarthur -- Raymond James -- Analyst

Greg Barnes -- TD Securities -- Analyst

Jeremy Hoy -- Cannacord Genuity -- Analyst

Don Blyth -- Paragon Capital -- Analyst

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