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Osisko Gold Royalties (OR.TO) on Wednesday reported lower revenue and deliveries in the first quarter.

The company posted preliminary revenue of US$54.9 million, down from US$60.7 million, as deliveries of gold equivalent ounces slipped to 19,014 from 22,259. As of March 31, Osisko said its cash position was approximately US$63.1 million, following a US$19.6 million net repayment on its revolving credit facility during the first quarter.

Subsequent to the end of the first quarter, Osisko said it paid down an additional US$25 million against its revolving credit facility, reducing the outstanding balance to US$49.3 million.

National Bank of Canada maintained its outperform rating and $35.50 price target on the company's share following the results.

"Given the royalty sector is expected to generate strong [free cash flow] at current gold prices, a competitive deal environment is likely to contribute to consolidation within the industry," the bank said. "We view several companies in the sector motivated to acquire OR's high-quality portfolio given its strong near-term growth pipeline."

"There's scope for a further re-rating given the company's depressed valuation relative to royalty peers and premium valuations ascribed to recent acquisitions within the sector," National Bank added.

Osisko shares were last seen up $0.61 to $28.05 on the Toronto Stock Exchange.