---

Exhibit 99.3



|Management's Discussion and Analysis      
|------------------------------------------
|For the year
      ended December 31, 2016

The following management discussion and analysis
(MD&A) of the consolidated operations and financial position of Osisko
Gold Royalties Ltd (Osisko, Osisko Gold Royalties or the Company) and its
wholly owned subsidiaries for the year ended December 31, 2016 should beread in conjunction with the Companys audited consolidated financial
statements and related notes for the year ended December 31, 2016. The audited
consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB). Management is responsible for
the preparation of the consolidated financial statements and other financial
information relating to the Company included in this report. The Board of
Directors is responsible for ensuring that management fulfills its
responsibilities for financial reporting. In furtherance of the foregoing, the
Board of Directors has appointed an Audit Committee composed of independent
directors. The Audit Committee meets with management and the auditors in order
to discuss results of operations and the financial condition of the Company
prior to making recommendations and submitting the consolidated financial
statements to the Board of Directors for its consideration and approval for
issuance to shareholders. The information included in this MD&A is as of
March 15, 2017, the date when the Board of Directors has approved the Company's
audited consolidated financial statements for the year ended December 31, 2016
following the recommendation of the Audit Committee. All monetary amounts
included in this report are expressed in Canadian dollars, the Companys
reporting currency, unless otherwise noted. This MD&A contains
forward-looking statements and should be read in conjunction with the risk
factors described in the Forward-Looking Statements section.

Table of Contents

|Description
      of the Business                                                                                 | 2 
|----------------------------------------------------------------------------------------------------------------- | --
|Business
      Model and Strategy                                                                                 | 2 
|Highlights                                                                                                        | 2 
|Portfolio
      of Royalty Interests                                                                              | 3 
|Portfolio
      of Investments                                                                                    | 7 
|Exploration
      and Evaluation Activities                                                                       | 9 
|Revolving
      Credit Facility                                                                                   | 10
|Quarterly
      Dividends                                                                                         | 10
|Gold
      Market and Currency                                                                                    | 11
|Selected
      Financial Information                                                                              | 13
|Overview
      of Financial Results                                                                               | 13
|Liquidity
      and Capital Resources                                                                             | 16
|Cash
      Flows                                                                                                  | 16
|Quarterly
      Information                                                                                       | 19
|Outlook                                                                                                           | 22
|Related
      Party Transactions                                                                                  | 22
|Contractual
      Obligations and Commitments                                                                     | 23
|Off-balance
      Sheet Items                                                                                     | 23
|Outstanding
      Share Data                                                                                      | 23
|Subsequent
      Events to 2016                                                                                   | 23
|Annual
      General Meeting                                                                                      | 23
|Corporate
      Update                                                                                            | 24
|Risks
      and Uncertainties                                                                                     | 24
|Disclosure
      Controls and Procedures and Internal Control Over Financial Reporting                            | 24
|Basis
      of Presentation of Consolidated Financial Statements                                                  | 25
|Critical
      Accounting Estimates and Judgements                                                                | 27
|Financial
      Instruments                                                                                       | 27
|Non-IFRS
      Financial Performance Measures                                                                     | 28
|Forward-looking
      Statements                                                                                  | 29
|Cautionary
      Note to U.S. Investors Regarding the Use of Mineral Reserve and Mineral
      Resource Estimates | 30
|Corporate
      Information                                                                                       | 31

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Description of the Business

Osisko Gold Royalties Ltd was formed following the friendly
acquisition of Osisko Mining Corporation by Yamana Gold Inc. (Yamana) and
Agnico Eagle Mines Limited (Agnico Eagle) and commenced active operations on
June 16, 2014. Osisko is a public company traded on the Toronto Stock Exchange
and the New York Stock Exchange and is domiciled in the Province of Québec,
Canada. The Company is incorporated under the Business Corporations Act
(Québec) and is focused on acquiring and managing precious metal and other
high-quality royalties and streams and similar interests in the Americas. The
cornerstone assets include the 5% net smelter return (NSR) royalty on the
Canadian Malartic mine located in Malartic, Québec and the sliding scale 2.0% -
3.5% NSR royalty on the Éléonore mine, located in the James Bay area in Québec.
The Company has also entered into a silver stream agreement on the Gibraltar
mine located in British Columbia (in February 2017) and owns a portfolio of
royalties, options on royalties/stream financing and exclusive rights to
participate in future royalty/stream financings on various projects in Canada
and the U.S.A. In addition, the Company invests in equities of exploration,
development and royalty companies and has interests (directly or indirectly) in
exploration and evaluation projects in four gold camps: the Abitibi Gold Belt
(Val-dOr - Kirkland Lake), the James Bay area, the Cariboo mining district and
the Guerrero Gold Belt in Mexico.

Business Model and Strategy

The Companys objective is to maximize returns for its
shareholders by growing its asset base, both organically and through accretive
acquisitions of precious metal and other high-quality royalties, streams and
similar interests, and by returning capital to its shareholders by dividend
payments. The Company believes it can achieve this by putting its teams strong
technical expertise to work seeking out high margin growth opportunities that
provide exposure to the upside of commodity prices and optionality of reserve
growth and new discoveries. Osiskos main focus is on high quality gold assets
located in favourable jurisdictions and operated by established mining
companies, as these assets are expected to support a premium valuation in the
marketplace. The Company will also evaluate opportunities in other commodities
and jurisdictions. Given that a core aspect of the Companys business is the
ability to compete for investment opportunities, Osisko plans to maintain a
strong balance sheet and ability to deploy capital. The Company may also invest
or maintain investments in gold bullion as part of its overall treasury
management, through the acquisition of gold bullion on the market or through
holding in-kind royalties received.

Highlights  2016

| |  | Record 38,270 gold equivalent ounces (GEO)1earned (25% increase compared to 2015);                                                                            
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Record revenues of $62.7 million (38% increase compared
      to 2015);                                                                                         
| |  | Net cash flows from operating activities of $53.4
      million;                                                                                                
| |  | Net earnings attributable to Osisko shareholders of $42.1
      million, $0.40 per basic share (compared to $28.7 million, $0.33 per basic
      share in 2015);
| |  | Adjusted earnings2of $34.2 million, $0.33 per
      basic share2(compared to 29.0 million, $0.33 per basic share);                                              
| |  | Cash and cash equivalents of $499.2 million as at
      December 31, 2016;                                                                                      
| |  | Realized gain of $15.9 million on sale of equity
      holdings;                                                                                                
| |  | Generated proceeds of $129.2 million on sale of
      investments mainly from the sale of its interest in Labrador Iron Ore
      Royalty Corporation;          
| |  | Completed a $50.0 million financing in the form of a
      convertible debenture with Investissement Québec;                                                    
| |  | Completed a bought deal public offering for gross
      proceeds of $172.6 million;                                                                             
| |  | Entered into a 1.5% NSR royalty agreement with
      Barkerville Gold Mines Ltd. on the Cariboo gold project for cash
      consideration of $25.0 million;     
| |  | Entered into a 1% NSR royalty agreement with Arizona
      Mining Inc. on the Hermosa project for cash consideration of $10.0
      million;                    
| |  | Entered into a $10.0 million financing agreement with
      Falco Resources Ltd. for a future stream financing or a 1% NSR royalty on
      the Horne 5 project;
| |  | On July 6, 2016, Osisko began trading on the New York
      Stock Exchange (NYSE) under the ticker OR;                                                      
| |  | Declaration of quarterly dividends of $0.04 per common
      share for a total of $0.16 per common share; and                                                   
| |  | On October 5, 2016, Osisko announced the closing of an
      exploration earn-in agreement to streamline its operations.                                        

|1 | Gold equivalent ounces earned includes NSR royalties in gold, silver and other cash royalties. Silver was converted to gold equivalent ounces by multiplying the silver
ounces by the average silver price for the period and dividing by the average gold price for the period. Cash royalties were converted into gold equivalent ounces by
dividing the associated revenue by the average gold price for the period. Refer to the portfolio of royalty interests section for average metal prices used.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Adjusted earnings and Adjusted earnings per share are nonIFRS financial performance measures which have no standard definition under IFRS. Refer to the non
IFRS measures provided under the NonIFRS Financial Performance Measures section of this Managements Discussion and Analysis.                                                                                                                                                                                                          

2

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Highlights  2017

| |  | On February 27, 2017, Osisko announced that it has
      entered into a US$33.0 million ($43.2 million) silver stream agreement
      with Taseko Mines Limited (Taseko), which was closed on March 3, 2017;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On March 15, 2017, declaration of a quarterly dividend of
      $0.04 per common share payable on April 17, 2017 to shareholders of record
      as of the close of business on March 31, 2017.               

Portfolio of Royalty Interests

Osisko holds two of the premier royalty assets in the gold
sector. All producing royalty interests are in Canada with no material cost of
sales and the following table details the GEO earned from Osiskos producing
royalty interests:

|                  |  | For the three
      months ended |  |  |              |  |  | For the year ended | 
|----------------- |  | -------------------------------- |  |  | ------------ |  |  | ------------------ | 
|                  |  |                                  |  |  | December 31, |  |  |                    | 
|                  |  | 2016                             |  |  | 2015         |  |  | 2016               | 
|                  |  |                                  |  |  |              |  |  |                    | 
|Gold              |  |                                  |  |  |              |  |  |                    | 
|                  |  |                                  |  |  |              |  |  |                    | 
|Canadian Malartic |  | 6,749                            |  |  | 7,587        |  |  | 28,748             | 
|Éléonore          |  | 1,343                            |  |  | 402          |  |  | 6,568              | 
|Island Gold       |  | 292                              |  |  | -            |  |  | 1,373              | 
|Vezza             |  | 342                              |  |  | -            |  |  | 830                | 
|Other             |  | 124                              |  |  | 40           |  |  | 294                | 
|                  |  | 8,850                            |  |  | 8,029        |  |  | 37,813             | 
|                  |  |                                  |  |  |              |  |  |                    | 
|Silver            |  |                                  |  |  |              |  |  |                    | 
|                  |  |                                  |  |  |              |  |  |                    | 
|Canadian Malartic |  | 114                              |  |  | 114          |  |  | 456                | 
|Vezza             |  | -                                |  |  | -            |  |  | 1                  | 
|                  |  | 114                              |  |  | 114          |  |  | 457                | 
|                  |  |                                  |  |  |              |  |  |                    | 
|Total GEO         |  | 8,964                            |  |  | 8,143        |  |  | 38,270             | 

Distribution by metal



Distribution by royalty interest



3

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Average Metal Prices and Exchange Rate

|                            |  | For the three
      months ended |  |  |              |  |  | For the year ended | 
|--------------------------- |  | -------------------------------- |  |  | ------------ |  |  | ------------------ | 
|                            |  |                                  |  |  | December 31, |  |  |                    | 
|                            |  | 2016                             |  |  | 2015         |  |  | 2016               | 
|                            |  |                                  |  |  |              |  |  |                    | 
|                            |  |                                  |  |  |              |  |  |                    | 
|Gold(1)                     |  | 1,222                            |  |  | 1,106        |  |  | 1,251              | 
|Silver(2)                   |  | 17                               |  |  | 15           |  |  | 17                 | 
|                            |  |                                  |  |  |              |  |  |                    | 
|Exchange rate (US$/Can$)(3) |  | 1.3341                           |  |  | 1.3354       |  |  | 1.3248             | 

| | (1) | The London Bullion Market Associations pm price in U.S.
      dollars
| | --- | ----------------------------------------------------------------------
| | (2) | The London Bullion Market Associations price in U.S.
      dollars   
| | (3) | Bank of Canada noon rate                                              

Canadian Malartic (Agnico Eagle and Yamana)

The Companys cornerstone asset is a 5% NSR royalty on the
Canadian Malartic property which is located in Malartic, Québec, and operated by
the Canadian Malartic General Partnership created by Agnico Eagle and Yamana
(the Partners). The Canadian Malartic property includes the Canadian Malartic
mine, which was constructed and developed by Osisko Mining Corporation at a cost
of approximately $1.2 billion and commenced production in April 2011. Canadian
Malartic is Canadas largest producing gold mine.

Osisko also holds a 3% NSR royalty on the Odyssey North zone
and a 5% NSR royalty on the Odyssey South zone. In February 2017, the Partners
have declared initial inferred mineral resources at Odyssey, estimated at 1.4
million ounces of gold (20.7 million tonnes grading 2.15 grams per tonne gold).

Éléonore (Goldcorp Inc.)

Through the acquisition of Virginia Mines Inc. in 2015, Osisko
owns a 2.0% to 3.5% NSR royalty in the Éléonore gold property located in the
Province of Québec and operated by Goldcorp Inc. (Goldcorp). Commercial
production for the Éléonore mine was declared on April 1, 2015.

Osisko was not entitled to receive any gold or silver ounces
until a US$5 million non-interest bearing royalty advance payment had been
recovered from production of Éléonore by Goldcorp (representing 4,328 ounces of
gold), which was completed in November 2015. The Company has been receiving gold
ounces from Éléonore since December 2015.

Gibraltar (Taseko Mines Limited)

On February 27, 2017, Osisko announced that it has agreed to
acquire from Gibraltar Mines Ltd. (Gibco), a wholly-owned subsidiary of
Taseko, a silver stream with reference to silver produced at the Gibraltar
copper mine (Gibraltar), located in British Columbia, Canada. Osisko will pay
Taseko cash consideration of US$33.0 million ($43.2 million) for the silver
stream. In addition, Osisko will make ongoing payments of US$2.75 ($3.60) per
ounce of silver delivered.

Osisko will receive from Taseko an amount equal to 100% of the
Gibco silver production until the delivery of 5.9 million ounces of silver,
which is equivalent to Tasekos 75% share of the silver in the current
proven and probable reserves, and 35% of silver production thereafter for the
life of mine. Gibraltar is the second largest open pit copper mine in Canada and
fourth largest in North America. The life of mine yearly average production from
Gibraltar is approximately 140 million pounds (lbs) of copper and 2.6 million
lbs of molybdenum. With a large reserve of 3.2 billion lbs of recoverable copper
and 58 million lbs of molybdenum, the estimated mine life of the project is 23
years (proven and probable reserves as of January 1, 2016). The acquisition is
expected to increase Osiskos production by approximately 200,000 ounces of
silver for the next 14 years, increasing to an average of 350,000 ounces of
silver for the remainder of the 23-year reserve life of Gibraltar. Any silver in respect of which a
delivery is made after January 1, 2017, is subject to the stream.

Island Gold (Richmont Mines Inc.)

The Company started receiving in-kind royalties from its Island
Gold NSR royalty (ranging from 1.7% to 2.55%) operated by Richmont Mines Inc.
(Richmont Mines) during the first quarter of 2016.

4

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Vezza Royalties (Ressources Nottaway Inc.)

The Company holds a 5% NSR royalty and a 40% net profit
interest (NPI) royalty in the Vezza gold property operated by Ressources
Nottaway Inc. The property is located 25 kilometres from Matagami, Québec.
Operations are currently ramping up at Vezza and Osisko has been receiving
royalty payments since the second quarter of 2016.

Lamaque Royalty (Integra Gold Corp.)

Osisko holds a 1.7% royalty on the Lamaque property located in
Abitibi and owned by Integra Gold Corp. (Integra). Cariboo Gold Project
(Barkerville Gold Mines Ltd.)

The Company holds a 1.5% NSR royalty on the Cariboo Gold
Project located in British Columbia, Canada, and owned by Barkerville Gold Mines
Ltd. (Barkerville), an associate of Osisko.

Hermosa Project (Arizona Mining Inc.)

In April 2016, Osisko acquired for $10.0 million a 1% NSR
royalty on any lead/zinc/silver sulfide ores mined from the Hermosa Project
owned by Arizona Mining Inc. (Arizona Mining). The Hermosa Project is located
in Santa Cruz County, Arizona.

Horne 5 Project (Falco Resources Ltd.)

On May 30, 2016, Osisko closed a financing agreement with Falco
Resources Ltd. (Falco), an associate of Osisko, whereby Osisko provided a
$10.0 million loan to be used for the advancement of the Horne 5 Project
(Rouyn-Noranda, Québec) and for general corporate purposes. The loan has an 18
month maturity and bears an interest of 7%. Under the terms of the financing,
Falco and Osisko shall negotiate, by the end of October 2017, the terms,
conditions and form of a silver and/or gold stream agreement ("Stream
Agreement"), which shall be substantially in the form typical for such
transaction in the industry, whereby Osisko may provide Falco with a portion of
the development capital required to build the Horne 5 Project. In this case, the
principal amount of the loan and any accrued interest will be applied against
the stream deposit. At the maturity date, if Falco and Osisko have not concluded
a Stream Agreement, the principal amount of the loan will be converted into a 1%
NSR royalty on the Horne 5 Project and accrued interests will be paid in cash.
Under certain events of default, Osisko may, at its option, require the
repayment of the principal amount and the accrued interest in cash.

Windfall Lake (Osisko Mining Inc.)

On October 4, 2016, Osisko exercised its option to acquire a 1%
NSR royalty on Osisko Mining Inc.s (Osisko Mining) Windfall Lake property for
$5.0 million. Osisko was already the holder of a 0.5% NSR royalty on Windfall
Lake. Therefore, the royalty on the Windfall Lake property increased to a total
of 1.5% . Osisko Mining is an associate of Osisko.

Marban (Osisko Mining)

Osisko is the holder of a 0.425% NSR royalty on the Marban gold
project, located in the Abitibi region of Québec, and is entitled to receive a
payment of $4.25 million on a production decision.

Options on royalties - Summary

|Asset                 | Operator | Interest       | Price to Exercise | Commodities | Jurisdiction          | Stage      
|--------------------- | -------- | -------------- | ----------------- | ----------- | --------------------- | -----------
|                      |          |                |                   |             |                       |            
|Neita                 | Unigold  | 2% NSR Royalty | $2.0 million      | Au          | Dominican Republic    | Exploration
|Yellowknife City Gold | TerraX   | 3% NSR Royalty | $4.0 million      | Au          | Northwest Territories | Exploration

5

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Stream and Royalties - Summary

|Asset                    | Operator                 | Interest                                   | Commodities             | Jurisdiction     | Stage      
|------------------------ | ------------------------ | ------------------------------------------ | ----------------------- | ---------------- | -----------
|                         |                          |                                            |                         |                  |            
|Canadian Malartic        | Agnico/Yamana            | 5.0% NSR royalty                           | Au                      | Québec           | Production 
|Éléonore                 | Goldcorp                 | 2.0-3.5% NSR royalty                       | Au                      | Québec           | Production 
|Gibraltar(6)             | Taseko Mines             | Stream                                     | Ag                      | British Columbia | Production 
|Island Gold(1),(2)       | Richmont Mines           | 1.7-2.55% NSR royalty                      | Au                      | Ontario          | Production 
|Hewfran Block(1), (2)    | Metanor Resources        | 1.7% NSR royalty                           | Au                      | Québec           | Production 
|Vezza                    | Ressources Nottaway Inc. | 5% NSR royalty & 40% NPI
      royalty     | Au                      | Québec           | Production 
|Horne 5(5)               | Falco                    | Gold/silver
      stream or 1% NSR royalty | Au, Ag, Cu              | Québec           | Exploration
|Lamaque(1),(2)           | Integra Gold             | 1.7% NSR royalty                           | Au                      | Québec           | Exploration
|Cariboo                  | Barkerville              | 1.5% NSR royalty                           | Au                      | British Columbia | Exploration
|Windfall Lake            | Osisko Mining            | 1.5% NSR Royalty                           | Au                      | Québec           | Exploration
|Marban                   | Osisko Mining            | 0.425% NSR
      royalty                   | Au                      | Québec           | Exploration
|Hermosa                  | Arizona Mining           | 1% NSR royalty                             | Zn, Pb, Ag              | Arizona, USA     | Exploration
|Pandora                  | Agnico/Yamana            | 2% NSR royalty                             | Au                      | Québec           | Exploration
|Malartic  Odyssey North | Agnico/Yamana            | 3% NSR royalty                             | Au                      | Québec           | Exploration
|Malartic  Odyssey South | Agnico/Yamana            | 5% NSR royalty                             | Au                      | Québec           | Exploration
|Upper Beaver             | Agnico/Yamana            | 2% NSR royalty                             | Au, Cu                  | Ontario          | Exploration
|Hammond Reef             | Agnico/Yamana            | 2% NSR royalty                             | Au                      | Ontario          | Exploration
|Kirkland Lake Camp       | Agnico/Yamana            | 2% NSR royalty                             | Au, Cu                  | Ontario          | Exploration
|Copperwood               | Highland Copper          | 3% NSR
      royalty(3)                    | Ag, Cu                  | Michigan, USA    | Exploration
|James Bay properties     | Osisko Mining            | 1.5-3.5% NSR royalty(4)                    | Au, Ag                  | Québec           | Exploration
|James Bay properties     | Osisko Mining            | 2.0 NSR
      royalty(4)                   | Other than
      Au, Ag | Québec           | Exploration

| | (1) | In 2015, the Company acquired a portfolio of 28 Canadian
      royalties held by Teck Resources Limited (Teck) for cash consideration
      of $24.2 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | After the sale of a 15% interest in the royalties
      acquired from Teck to Caisse de dépôt et placement du Québec.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (3) | 3.0% NSR royalty on the Copperwood project. Upon closing
      of the acquisition of the White Pine project, Highland Copper Company will
      grant Osisko a 1.5% NSR royalty on all metals produced from the White Pine
      project, and Osisko's royalty on Copperwood will be reduced to
  1.5%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (4) | Effective October 4, 2016, Osisko entered into an earn-in
      agreement with Osisko Mining, which was subsequently amended to create two
      separate earn-in agreements. Under the first earn-in agreement, Osisko
      Mining may earn a 100% interest in 26 of Osiskos exploration properties
      located in the James Bay area and Labrador Through (excluding the Coulon
      copper-zinc project and four other exploration properties) upon completing
      expenditures of $26.0 million over a 7-year period; Osisko Mining may earn
      a 50% interest upon completing expenditures totaling $15.6 million over a
      4-year period. Under the second earn-in agreement, Osisko Mining may earn
      a 100% interest in the Kan property upon completing expenditures totaling
      $6.0 million over a 7-year period, which represents the guaranteed
      expenditures to be incurred by Barrick Gold Corporation (Barrick),
      following an earn-in agreement signed between Osisko Mining and Barrick
      where Barrick committed to spend $15.0 million on the Kan property; Osisko
      Mining may earn a 50% interest upon completing expenditures totaling $3.6
      million over a 4-year period. Osisko will retain an escalating NSR royalty
      ranging from 1.5% to 3.5% on precious metals and a 2.0% NSR royalty on
      other metals and minerals produced from the 27 properties. New properties
      acquired by Osisko Mining in a designated area during the 7-year term will
      be subject to a royalty agreement in favour of Osisko with similar
      terms.
| | (5) | In May 2016, Osisko entered into a financing agreement of
      $10.0 million with Falco, which will be applied against a stream deposit
      to be negotiated by October 31, 2017 or converted into a 1% NSR royalty on
      the Horne 5 project if no stream agreement is concluded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (6) | Silver stream acquired on February 27, 2017. Any silver
      in respect of which a delivery is made after January 1, 2017, is subject
      to the stream.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

6

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     





Portfolio of Investments

7

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

The Companys assets include a portfolio of shares of publicly
traded companies. Osisko invests, and intends to continue to invest, from time
to time in companies where it holds a royalty interest and in various companies
within the mining industry for investment purposes and with the objective of
improving its ability to acquire interests in exploration assets, future
royalties or revenue streams. In addition to investment objectives, in some
cases, the Company may decide to take a more active role, including providing
management personnel, technical and/or administrative support, as well as
nominating individuals to the investees board of directors. These investments
are reflected in investments in associates in the consolidated financial
statements and include Osisko Mining, Falco and Barkerville.

Osisko may, from time to time and without further notice except
as required by law, increase or decrease its investments at its discretion.

During the year ended December 31, 2016, Osisko acquired
investments for $82.4 million and sold investments for $129.2 million with a
gain of $15.9 million ($14.7 million net of income taxes) recorded in other
comprehensive income (loss).

The following table presents the carrying value and fair value
of the investments in marketable securities as at December 31, 2016:

Marketable securities
    
    Carrying value(i)
    
    
    Fair value(ii)$
    
    
    $Associates
    
    82,902
    
    
    124,455Other
    
    97,274
    
    
    97,274180,176
    
    
    221,729


|(i)  | The carrying value corresponds to the amount recorded on
      the balance sheet, which is the equity method for the investments in
      marketable securities of associates and the fair value for the other
      investments in marketable securities, as per IFRS 9, Financial
      Instruments.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii) | The fair value corresponds to the quoted price of the
      investments in a recognized stock exchange as at December 31,
  2016.                                                                                                                                                                     

Main strategic investments

Osisko Mining Inc.

In August 2015, Osisko Mining acquired Eagle Hill Exploration
Corporation, Ryan Gold Corp. and Corona Gold Corporation to combine leadership,
treasuries and assets to form a new Canadian focused gold exploration and
development company. In 2015, Osisko invested $17.8 million in shares of Osisko
Mining and was granted a right to acquire a 1% NSR royalty on all properties
held by Osisko Mining at the date of the financing. The right was exercised in
October 2016 for $5.0 million and includes a 1% NSR royalty on the Windfall Lake
gold project (bringing the total NSR royalty on the Windfall Lake gold project
to 1.5%), where Osisko Mining is currently pursuing significant drilling
activities. In March 2016, Osisko Mining acquired all of the outstanding shares
of NioGold Mining Corporation. In 2016, Osisko entered into an earn-in agreement
with Osisko Mining, which was subsequently amended in 2017 to create two earn-in
agreements, on properties held by Osisko in the James-Bay area. The transaction
is detailed in the Streams and Royalties  Summary section of this MD&A. In
2016, the Company invested an additional $6.8 million in Osisko Mining. As at
December 31, 2016, the Company has a 13.5% interest in Osisko Mining (15.7% as
at December 31, 2015). As some officers and directors of Osisko are also
officers and directors of Osisko Mining, the Company concluded that it exercises
significant influence over Osisko Mining since 2014 and accounts for its
investment using the equity method.

8

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Falco Resources Ltd.

Falcos main asset is the Horne 5 gold project, for which a
feasibility study is expected to be released by the end of the second quarter of
2017. In 2015 and 2016, Osisko acquired additional common shares in Falco for
$2.4 million and $3.3 million, respectively. In addition, Osisko entered into a
financing agreement of $10.0 million with Falco, which will be applied against a
stream deposit to be negotiated by October 31, 2017 or converted into a 1% NSR
royalty on the Horne 5 project if no stream agreement is concluded. As at
December 31, 2016, the Company has a 14.2% interest in Falco (16.2% as at
December 31, 2015). As the chair of the Board of Directors and Chief Executive
Officer of Osisko is also the chair of the Board of Directors of Falco, the
Company concluded that it exercises significant influence over Falco since 2014
and accounts for its investment using the equity method.

Barkerville Gold Mines Ltd.

Barkerville is focused on the development of its extensive land
package located in the historical Cariboo Mining District of central British
Columbia, Canada. In November, 2015, Osisko and Barkerville entered into an
agreement for Osisko to acquire a 1.5% NSR royalty on the Cariboo Gold project
for cash consideration of $25.0 million. Osisko and Barkerville have also agreed
to negotiate a gold stream agreement (Gold Stream Agreement) following the
completion by Barkerville of a feasibility study on the Cariboo gold project.
Following a 60-day negotiation period, if Osisko and Barkerville have not
entered into a Gold Stream Agreement, Barkerville shall either grant a right to
Osisko to purchase an additional 0.75% NSR royalty for consideration of $12.5
million, or make a payment of $12.5 million to Osisko. In 2015 and 2016, Osisko acquired
common shares of Barkerville for $11.0 million and $8.2 million, respectively.
As at December 31, 2016, the Company has a 17.3% interest in Barkerville (13.4%
as at December 31, 2015). As the chair of the Board of Directors and Chief
Executive Officer of Osisko is also the co-chair of the Board of Directors of
Barkerville, the Company concluded that it exercises significant influence over
Barkerville since 2016 and accounts for its investment using the equity
method.

Other significant investment

Labrador Iron Ore Royalty Corporation

Over the course of the fourth quarter of 2016 and January 2017,
Osisko sold its 9.8% interest in Labrador Iron Ore Royalty Corporation
(LIORC). The Company received $113.4 million in proceeds (including $98.2
million in 2016). Since the initial investment in LIORC, the Company received
$10.7 million in dividends (including $6.3 million in 2016 and $0.2 million in
2017).

Exploration and Evaluation Activities

Effective October 4, 2016, Osisko entered into an earn-in
agreement with Osisko Mining, which was subsequently amended to create two
separate earn-in agreements. Under the first earn-in agreement, Osisko Mining
may earn a 100% interest in 26 of Osiskos exploration properties located in the
James Bay area (excluding the Coulon copper-zinc project and four other
exploration properties) and Labrador Trough upon completing expenditures of
$26.0 million over a 7-year period; Osisko Mining will earn a 50% interest upon
completing expenditures totaling $15.6 million over a 4-year period. Under the
second earn-in agreement, Osisko Mining may earn a 100% interest in the Kan
property upon completing expenditures totaling $6.0 million, which represents
the guaranteed expenditures to be incurred by Barrick, following an earn-in
agreement signed between Osisko Mining and Barrick where Barrick committed to
spend $15.0 million on the Kan property; Osisko Mining may earn a 50% interest
upon completing expenditures totaling $3.6 million over a 4-year period. Osisko
will retain an escalating NSR royalty ranging from 1.5% to a maximum of 3.5% on
precious metals and a 2.0% NSR royalty on other metals and minerals produced
from the 27 properties. Additionally, new properties acquired by Osisko Mining
in a designated area during a 7-year term will be subject to a royalty agreement
in favour of Osisko with similar terms. Osisko undertakes not to participate in
any exploration activity and is bound not to compete with Osisko Mining in areas
covered by the agreement, except for the continuation of activities on its
Coulon copper-zinc project held by Osisko and other Québec institutional
shareholders and on four other exploration properties. As part of the
transaction, Osisko Mining hired all of the Osisko Québec based exploration team
(former Virginia Mines Inc. employees) and took over the Québec office lease.
The transaction in respect of the properties is subject to third parties
approval, as applicable.

As a result of this transaction, the exploration and evaluation
activities have been significantly reduced and will be concentrated on the
Coulon project (James Bay area). During the fourth quarter of 2016, Osisko
invested $0.4 million, net of tax credits, in exploration and evaluation
activities on the Coulon project for a total of $3.0 million for the year ended
December 31, 2016. As at December 31, 2016, the carrying value of the Coulon
project was $57.8 million ($54.7 million as at December 31, 2015) and the
carrying value of the other properties, including those under the earn-in
agreements with Osisko Mining, was $42.2 million ($41.5 million as at December
31, 2015).

9

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

On the Coulon project, a diamond drill program was conducted
from January through spring 2016. For the year 2016, 30 new holes were drilled
and one hole was extended for a total of 23,075 metres.

Revolving Credit Facility

In December 2015, the Company increased its revolving credit
facility (Facility) from $100.0 million to $150.0 million. The Facility was
extended by one year and was syndicated between National Bank of Canada and Bank
of Montreal. The Facility may be increased by $50.0 million at Osiskos request,
subject to standard due diligence procedures. The Facility is to be used for
investments in the mineral industry, including the acquisition of royalties and
the funding of precious metal streams. The Facility is secured by the Companys
assets (including the royalty interests) and has a two-year term (December 23,
2017), which can be extended by one year on each of the two anniversary dates of
the amendment. As at December 31, 2016, the Facility was not drawn.

Quarterly Dividends

The Board of Directors has approved the initiation of the
Companys quarterly dividend program on November 16, 2014.

The following table provides details on the dividends declared:

|                           |  |           |  |  |                         |  |  |                  |  |  |            |  |  | Dividend     | 
|-------------------------- |  | --------- |  |  | ----------------------- |  |  | ---------------- |  |  | ---------- |  |  | ------------ | 
|                           |  | Dividend  |  |  |                         |  |  |                  |  |  | Dividend   |  |  | reinvestment | 
|Declaration date           |  | per share |  |  | Record date             |  |  | Payment date     |  |  | payable    |  |  | plan(ii)     | 
|                           |  | **$**     |  |  |                         |  |  |                  |  |  | **$**      |  |  |              | 
|                           |  |           |  |  |                         |  |  |                  |  |  |            |  |  |              | 
|November 16,
      2014(i) |  | 0.03      |  |  | December 31,
      2014 |  |  | January 15, 2015 |  |  | 1,551,000  |  |  | -            | 
|                           |  | 0.03      |  |  |                         |  |  |                  |  |  | 1,551,000  |  |  | -            | 
|                           |  |           |  |  |                         |  |  |                  |  |  |            |  |  |              | 
|February 19, 2015(i)       |  | 0.03      |  |  | March 31, 2015          |  |  | April 15, 2015   |  |  | 2,782,000  |  |  | -            | 
|May 14, 2015               |  | 0.03      |  |  | June 30, 2015           |  |  | July 15, 2015    |  |  | 2,834,000  |  |  | -            | 
|August 5, 2015             |  | 0.03      |  |  | September 30, 2015      |  |  | October 15, 2015 |  |  | 2,830,000  |  |  | 5,430,858    | 
|November 4, 2015           |  | 0.04      |  |  | December 31,
      2015 |  |  | January 15, 2016 |  |  | 3,783,000  |  |  | 7,712,746    | 
|                           |  | 0.13      |  |  |                         |  |  |                  |  |  | 12,229,000 |  |  |              | 
|                           |  |           |  |  |                         |  |  |                  |  |  |            |  |  |              | 
|February 16, 2016          |  | 0.04      |  |  | March 31, 2016          |  |  | April 15, 2016   |  |  | 4,248,000  |  |  | 7,144,004    | 
|May 4, 2016                |  | 0.04      |  |  | June 30, 2016           |  |  | July 15, 2016    |  |  | 4,259,000  |  |  | 11,594,125   | 
|August 4, 2016             |  | 0.04      |  |  | September 30, 2016      |  |  | October 14, 2016 |  |  | 4,264,000  |  |  | 4,460,148    | 
|November 9, 2016           |  | 0.04      |  |  | December 31,
      2016 |  |  | January 16, 2017 |  |  | 4,266,000  |  |  | 4,591,999    | 
|                           |  | 0.16      |  |  |                         |  |  |                  |  |  | 17,037,000 |  |  |              | 
|                           |  |           |  |  |                         |  |  |                  |  |  |            |  |  |              | 
|March 15, 2017(i)          |  | 0.04      |  |  | March 31, 2017          |  |  | April 14, 2017   |  |  | tbd(iii)   |  |  | tbd(iii)     | 
|                           |  | 0.04      |  |  |                         |  |  |                  |  |  |            |  |  |              | 

| | (i)   | The 1.2 million common shares that were held in escrow
      prior to June 30, 2015 were not eligible to the dividend.                                                                       
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Number of common shares held by shareholders
      participating to the dividend reinvestment plan described below.                                                                          
| | (iii) | To be determined (tbd) on March 31, 2017 based on the
      number of shares outstanding and the number of shares participating in the
      dividend reinvestment plan on the record date.

Dividend reinvestment plan

On September 21, 2015, the Company announced the implementation
of a dividend reinvestment plan (DRIP). The DRIP allows Canadian shareholders
to reinvest their cash dividends into additional common shares either purchased
on the open market through the facilities of the TSX, or issued directly from
treasury by the Company, or acquired by a combination thereof. In the case of a
treasury issuance, the price will be the weighted average price of the common
shares on the TSX during the five (5) trading days immediately preceding the
dividend payment date, less a discount, if any, of up to 5%, at the Companys
sole election. No commissions, service charges or brokerage fees are payable by
shareholders who elect to participate in the DRIP.

As at December 31, 2016, the holders of 4,591,999 common shares
had elected to participate in the DRIP, representing dividends payable of
$184,000.

10

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

For the year 2016, the number of common shares issued by the
Company under the DRIP, at a discount rate of 3%, amounted to 83,533.

Gold Market and Currency

Gold Market

After a spectacular rally during the first quarter of 2016
where gold reached its best quarterly performance since 1986, the gold price
continued its recovery during the second quarter of 2016 from the lows of 2015.
Gold prices continued to rise to a two-year high to reach US$1,375 in early July
after rallying on the Brexit turmoil, and spent the rest of the third quarter of
2016 in a consolidation phase.

After dropping sharply in early October to set a low of
US$1,240, gold prices consolidated and rebounded again to a high of US$1,308 in
early November. Gold dropped by US$70 on election night of the U.S. presidential
race and continued its drop to a low of US$1,122 in mid-December. The fiscal
policy-driven post-election optimism surrounding U.S. growth and better
employment conditions kept equity prices near record highs. This has also
contributed to a sell-off in the bond markets, reflected in a jump in U.S.
treasury yields and a substantial rally in the U.S. dollar. Inflation
expectations have risen driven by firmer commodity prices. Aggressive tax cuts
and new infrastructure expenditures proposed by the new U.S. administration have
fueled expectations of a strong global economy and diverted investors from
safe-haven assets.

Toward the end of the fourth quarter of 2016, prices started to
build a base. In 2017, markets have already seen a partial recovery of US$80 in
early January 2017 in response to the oversold conditions. Investors are looking
for affordable safe-haven assets in the weeks and months ahead given
geopolitical uncertainties with the new U.S. administration.

Gold prices finished up 8% in 2016, breaking 3 years of
consecutive declines. The price per ounce averaged US$1,251 in 2016 compared to
$1,161 in 2015. A combination of macroeconomic drivers were among factors
supporting investors to come back in the market last year, such as accommodative
policies by major central banks, reluctance by the Federal Reserve to raise
rates in a low-growth environment, the unexpected results of the Brexit
referendum and the U.S. presidential election.

In the fourth quarter of 2016, gold prices lost US$177 quarter
over quarter on the London Fix and closed at US$1,146. The gold price averaged
US$1,222 during the period, which was a significant decrease compared to the
US$1,335 average in the third quarter of 2016, but gained US$86 on a year over
year basis.

In 2017, gold can offer relatively affordable safe-haven
alternatives for investors with a lot of unknowns on the political side with
critical European elections and near term developments with the Brexit vote. In
the U.S., the start of a new presidency with an unconventional president should
keep participants on edge. Geopolitical tensions around the world will continue,
currency volatility, higher debt and moves towards protectionism should provide
support to the price.

The historical price is as follows:

|(US$/ounce) |   | High  |  |   | Low   |  |   | Average |  |   | Close | 
|----------- | - | ----- |  | - | ----- |  | - | ------- |  | - | ----- | 
|            |   |       |  |   |       |  |   |         |  |   |       | 
|2016        | $ | 1,366 |  | $ | 1,077 |  | $ | 1,251   |  | $ | 1,146 | 
|2015        |   | 1,296 |  |   | 1,049 |  |   | 1,160   |  |   | 1,060 | 
|2014        |   | 1,385 |  |   | 1,142 |  |   | 1,266   |  |   | 1,206 | 
|2013        |   | 1,694 |  |   | 1,192 |  |   | 1,411   |  |   | 1,205 | 
|2012        |   | 1,792 |  |   | 1,540 |  |   | 1,669   |  |   | 1,658 | 
|2011        |   | 1,895 |  |   | 1,319 |  |   | 1,572   |  |   | 1,531 | 
|2010        |   | 1,421 |  |   | 1,058 |  |   | 1,225   |  |   | 1,406 | 

In Canadian dollar terms, the average price per ounce for the
fourth quarter of 2016 averaged at $1,630 compared to $1,478 in the fourth
quarter of 2015. In 2016, the average price per ounce of gold averaged at $1,657
compared to $1,483 in 2015.

Currency

The Company is subject to currency fluctuations as its revenues
are mainly in U.S. dollars and its expenses are mainly denominated in Canadian
dollars. The Company also holds significant cash balances in U.S. dollars to
diversify its resources (US$181.0 million as at December 31, 2016), which can
create volatility in gains and losses on foreign exchange on the consolidated
statement of income. A weaker Canadian dollar increases the revenues presented
in Canadian dollars on the consolidated statement of income as the
sales of gold and silver are traded in U.S. dollars. To compensate for the risk
that a weaker Canadian dollar would have on the Companys purchasing power of
U.S. dollar denominated investments, the Company holds a certain percentage of
its cash in U.S. dollars.

11

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

The Canadian dollar weakened heavily in 2015 for the second
  year in a row, depreciating by over 15% in 2015 following its 8% decline in
  2014. The Canadian dollar suffered an intense volatility during the first
  quarter of 2016, delivering sharp and unexpected moves. In early January, the
  currency plunged against the U.S. dollar to a 13-year low at 1.46. Later in the
  first quarter, the dollar made a significant come back and closed at 1.2971
compared to 1.3840 as at December 31, 2015.

During the second quarter of 2016, the Canadian dollar was
influenced by the recovery of the commodity prices, an improving Chinese economy
and a weaker U.S. dollar. The Canadian dollar briefly traded below 1.25 until
the Fort McMurray complex fire in Alberta got out of control. The Canadian
dollar traded between a range of 1.2544 and 1.3170 during the second
quarter.

During the third and fourth quarters of 2016, the Canadian
dollar averaged respectively 1.3050 and 1.3341 to close at 1.3427. The Canadian
dollar depreciated by the end of 2016 compared to the U.S. dollar following the
U.S. presidential election, which moved the U.S. dollar to a 14-year high. The
prospect of more stimulating U.S. fiscal policies supported a rally in stocks
and a rise in U.S. Treasury yields towards the end of 2016.

In 2016, the Bank of Canada maintained its policy rate
unchanged for the overnight rate at 0.5% and is expected to be on hold until at
least the second half of 2017.

The exchange rate for the U.S./Canadian is outlined below:

|     |  | High   |  |  | Low    |  |  | Average |  |  | Close  | 
|---- |  | ------ |  |  | ------ |  |  | ------- |  |  | ------ | 
|2016 |  | 1.4589 |  |  | 1.2544 |  |  | 1.3248  |  |  | 1.3427 | 
|2015 |  | 1.3990 |  |  | 1.1728 |  |  | 1.2787  |  |  | 1.3840 | 
|2014 |  | 1.1643 |  |  | 1.0614 |  |  | 1.1045  |  |  | 1.1601 | 
|2013 |  | 1.0697 |  |  | 0.9839 |  |  | 1.0299  |  |  | 1.0636 | 
|2012 |  | 1.0418 |  |  | 0.9710 |  |  | 0.9996  |  |  | 0.9949 | 
|2011 |  | 1.0604 |  |  | 0.9449 |  |  | 0.9891  |  |  | 1.0170 | 
|2010 |  | 1.0778 |  |  | 0.9946 |  |  | 1.0299  |  |  | 0.9946 | 

For 2017, the outlook for the Canadian dollar remains
challenging with a range of uncertainties. The market is waiting to see the
impact of the new administration on U.S. growth and trade policy with the
resurgence of protectionism. New mortgage rules restricting credit for
homebuyers, benefits of the federal governments recovery plan and elections in
several European countries will also bring volatility to the markets.

12

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Selected Financial Information(1)(in thousands of dollars, except figures for ounces and amounts per
ounce and per share)

|                                                         |  | 2016      |  |  | 2015      |  |  | 2014    |  
|-------------------------------------------------------- |  | --------- |  |  | --------- |  |  | ------- | -
|                                                         |  | **$**     |  |  | **$**     |  |  | **$**   |  
|                                                         |  |           |  |  |           |  |  |         |  
|Revenues                                                 |  | 62,677    |  |  | 45,415    |  |  | 17,179  |  
|Operating income (loss)                                  |  | 29,089    |  |  | 18,224    |  |  | (1,735  | )
|Net earnings
      (loss)(2)                             |  | 42,113    |  |  | 28,749    |  |  | (2,095  | )
|Basic net earnings (loss) per
      share(2)             |  | 0.40      |  |  | 0.33      |  |  | (0.05   | )
|Diluted net earnings (loss)
      per share(2)           |  | 0.40      |  |  | 0.32      |  |  | (0.05   | )
|                                                         |  |           |  |  |           |  |  |         |  
|Total assets                                             |  | 1,416,304 |  |  | 1,081,433 |  |  | 269,965 |  
|                                                         |  |           |  |  |           |  |  |         |  
|Operating cash
      flows(3)                            |  | 54,219    |  |  | 32,181    |  |  | 5,894   |  
|                                                         |  |           |  |  |           |  |  |         |  
|Gold royalties earned
      (ounces)                     |  | 37,519    |  |  | 30,126    |  |  | 12,327  |  
|Gold ounces sold                                         |  | 37,402    |  |  | 30,104    |  |  | 12,327  |  
|                                                         |  |           |  |  |           |  |  |         |  
|Average selling price of gold
      (per ounce sold)     |  |           |  |  |           |  |  |         |  
|In
      C$(4)                                           |  | 1,643     |  |  | 1,486     |  |  | 1,374   |  
|In US$                                                   |  | 1,245     |  |  | 1,153     |  |  | 1,229   |  
|                                                         |  |           |  |  |           |  |  |         |  
|Weighted average shares
      outstanding (in thousands) |  |           |  |  |           |  |  |         |  
|Basic                                                    |  | 104,671   |  |  | 87,856    |  |  | 45,964  |  
|Diluted                                                  |  | 104,824   |  |  | 88,938    |  |  | 45,964  |  

| | (1) | Unless otherwise noted, financial information is in
      Canadian dollars and prepared in accordance with IFRS.
| | --- | ----------------------------------------------------------------------------------------------------------------
| | (2) | Attributable to Osisko shareholders.                                                                            
| | (3) | Before change in non-cash working capital
items.                                                                
| | (4) | Using actual exchange rates at the date of the
      transactions.                                              

Overview of Financial Results

Financial Summary  2016

| |  | Revenues of $62.7 million compared to $45.4 million in
      2015;                                                                                                                                         
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Operating income of $29.1 million compared to $18.2
      million in 2015;                                                                                                                                 
| |  | Net earnings attributable to Osisko shareholders of $42.1
      million or $0.40 per basic share and diluted share, compared to $28.7
      million or $0.33 per basic and $0.32 per diluted share in 2015;
| |  | Adjusted earnings1of $34.2 million or $0.33
      per basic share1compared to $29.0 million or $0.33 per basic
      share in 2015;                                                                        
| |  | Net cash flows provided by operating activities before
      change in non-cash working capital items of $54.2 million compared to
      $32.2 million in 2015.                                            

Revenues increased in 2016 as a result of higher in-kind
royalties earned and sold. Gold royalties earned from the Canadian Malartic mine
decreased by 3% or 975 ounces (sales decreased by 972 ounces), but the decrease
from the Canadian Malartic mine was more than offset by the gold royalties
earned from the Éléonore, Island Gold and Vezza NSR royalties. The Company
earned and sold 6,568 ounces of gold from the Éléonore mine compared to 402
ounces in 2015. In addition, the Company received and sold 1,373 ounces of gold
from its Island Gold mine NSR royalty and received 830 ounces of gold from its
Vezza NSR royalty and sold 730 ounces of gold. The average selling price of gold
per ounce in Canadian dollars was also higher in 2016 at $1,643 compared to
$1,486 in 2015.

|_____________________________
|-----------------------------
|1                            

13

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

In 2016, operating income amounted to $29.1 million compared to
$18.2 million in 2015. The increase in net operating income in 2016 is mainly
the result of higher revenues generated from the sale of gold and silver, lower
business development expenses, a recovery of exploration tax credits of $2.2
million, lower exploration and evaluation expenses and higher cost recoveries
from associates, partially offset by the depletion of royalty interests and
higher general and administrative expenses (G&A). The increase in G&A
expenses is mainly due to higher legal costs and costs related to the listing on
the NYSE as well as higher share-based compensation expenses and was mostly
offset by an increase in cost recoveries from associates The decrease in
business development is mainly due to the $2.2 million fees incurred in 2015 for
the acquisition of Virginia and the streamlining of operations in 2016.

The increase in net earnings in 2016 is mainly the result of an
increase of $10.9 million in operating income and net gains on investments of
$30.2 million compared to $1.6 million in 2015, partially offset by a loss on
foreign exchange of $5.8 million compared to a gain of $11.1 million in 2015,
higher finance costs, higher share of loss of associates, higher income tax
expense and lower interest and dividend income.

The increase of $5.2 million in adjusted earnings in 2016
compared to 2015 is mainly due to an increase in operating income of $10.9
million, partially offset by lower interest and dividend revenues of $1.7
million, higher finance costs of $2.8 million and current income taxes of $1.3
million. As at December 31, 2016, there is no income tax payable.

Net cash flows provided by operating activities increased in
2016 as a result of higher revenues and operating income when compared to 2015.

Consolidated Statements of Income

The following table presents summarized consolidated statements
of income for the years ended December 31, 2016 and 2015 (in thousands of
dollars, except amounts per share):

|                                     |  |     |  |  | 2016    |   |  | 2015    |  
|------------------------------------ |  | --- |  |  | ------- | - |  | ------- | -
|                                     |  |     |  |  | **$**   |   |  | **$**   |  
|                                     |  |     |  |  |         |   |  |         |  
|Revenues                             |  | (a) |  |  | 62,677  |   |  | 45,415  |  
|                                     |  |     |  |  |         |   |  |         |  
|Expenses                             |  |     |  |  |         |   |  |         |  
|Depletion of royalty interests       |  | (b) |  |  | (11,291 | ) |  | (588    | )
|General and administrative           |  | (c) |  |  | (16,858 | ) |  | (15,046 | )
|Business development                 |  | (d) |  |  | (8,282  | ) |  | (10,982 | )
|Exploration and evaluation           |  | (e) |  |  | 1,240   |   |  | (2,409  | )
|Other gains (expenses), net          |  | (f) |  |  | (1,436  | ) |  | 308     |  
|Cost recoveries from associates      |  | (g) |  |  | 3,039   |   |  | 1,526   |  
|                                     |  |     |  |  |         |   |  |         |  
|Operating income                     |  |     |  |  | 29,089  |   |  | 18,224  |  
|                                     |  |     |  |  |         |   |  |         |  
|Other income, net                    |  | (h) |  |  | 22,489  |   |  | 18,498  |  
|                                     |  |     |  |  |         |   |  |         |  
|Earnings before income taxes         |  |     |  |  | 51,578  |   |  | 36,722  |  
|                                     |  |     |  |  |         |   |  |         |  
|Income tax expense                   |  | (i) |  |  | (9,724  | ) |  | (8,194  | )
|                                     |  |     |  |  |         |   |  |         |  
|Net earnings                         |  |     |  |  | 41,854  |   |  | 28,528  |  
|                                     |  |     |  |  |         |   |  |         |  
|Net earnings (loss) attributable to: |  |     |  |  |         |   |  |         |  
|Osiskos
      shareholders          |  |     |  |  | 42,113  |   |  | 28,749  |  
|Non-controlling
      interests      |  |     |  |  | (259    | ) |  | (221    | )
|                                     |  |     |  |  |         |   |  |         |  
|Basic net earnings per share         |  |     |  |  | 0.40    |   |  | 0.33    |  
|Diluted net earnings per share       |  |     |  |  | 0.40    |   |  | 0.32    |  

14

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

| | (a) | Revenues are comprised of the
following:
| | --- | ----------------------------------------

| |                          |  | Year ended December 31, 2016 |  |  | Year ended December 31, 2015 | 
| | ------------------------ |  | ---------------------------- |  |  | ---------------------------- | 
| |                          |  | Average                      |  |  |                              | 
| |                          |  | selling price                |  |  | Ounces                       | 
| |                          |  | per ounce                    |  |  | Sold                         | 
| |                          |  | ($)                          |  |  |                              | 
| |                          |  |                              |  |  |                              | 
| |                          |  |                              |  |  |                              | 
| | Gold sold                |  | 1,643                        |  |  | 37,402                       | 
| | Silver sold              |  | 23                           |  |  | 32,836                       | 
| | Royalties (paid in cash) |  | -                            |  |  | -                            | 
| |                          |  |                              |  |  |                              | 

| | (b) | The royalty interests are depleted using the
      units-of-production method over the life of the properties. Depletion of
      royalty interests represents mainly the depletion of the Éléonore royalty
      interest acquired in February 2015 and the depletion of the Island Gold
      and Vezza royalty interests.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (c) | In 2016, G&A expenses were $16.9 million compared to
      $15.0 million in 2015. The increase is mainly due to higher legal costs
      and costs related to the listing on the NYSE as well as higher share-based
      compensation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The increase in G&A expenses was mostly offset by an
      increase in cost recoveries from associates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (d) | Business development expenses totaled $8.3 million
      compared to $11.0 million in 2015. In 2015, business development expenses
      included costs related to the acquisition of Virginia for $2.2 million.
      The decrease in business development expenses was also the result of the
      streamlining of the Companys operations in the third quarter of
    2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (e) | In 2016, the use of exploration tax credits of $2.2
      million resulted in a net recovery of $1.2 million in exploration and
      evaluation. Excluding these exploration tax credits, expenses in
      exploration and evaluation amounted to $1.0 million in 2016 compared to
      $2.4 million in 2015. Through the farm-out agreement concluded with Osisko
      Mining in October 2016 and reduction of activities in Mexico, the
      Companys exploration and evaluation expenses have been significantly
      reduced.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (f) | In 2016, other expenses are comprised of a loss on
      disposal of an exploration and evaluation asset of $0.3 million (the
      Company disposed of an exploration property having a carrying value of
      $0.8 million in exchange for shares in a new associate having a fair value
      of $0.5 million), a write-off of property and equipment of $0.5 million
      and an impairment charge on exploration and evaluation assets of $0.7
      million (the Company wrote-off a grassroots project in the James Bay area
      where it does not expect substantial expenses to be incurred in the
      future).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | In 2015, other gains are comprised of gain on disposal of
      an exploration and evaluation asset (the Company sold a property in
      exchange for common shares, which resulted in a non-cash gain of $0.5
      million based on the fair value of the common shares received at the date
      of the closing of the transaction), partially offset by an impairment
      charge on exploration and evaluation assets of $0.2 million (the Company
      wrote-off some abandoned grassroots projects in the James Bay
  area).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (g) | Cost recoveries from associates represent costs incurred
      by Osisko for professional services rendered to associates as well as
      renting of office space. The number of service agreements and the level of
      services with associates have increased in the last year, explaining the
      increase in cost recoveries in 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (h) | Other income, net, of $22.5 million in 2016 includes a
      net gain on investments of $30.2 million (including a gain of $3.4 million
      on the disposal of NioGold Mining Corporation, an associate, acquired by
      Osisko Mining, another associate), dividend income of $4.9 million and
      interest revenues of $3.3 million, partially offset by a loss on foreign
      exchange of $5.8 million, a share of loss of associates of $6.6 million
      and finance costs of $3.4 million. Other net income in 2015 amounted to
      $18.5 million and includes a net gain on investments of $1.6 million
      (including a gain on a deemed disposal of $7.9 million on the shares of
      Virginia held prior to the acquisition date and a loss of $2.4 million on
      a disposal on an investment transferred to the investments in associates),
      dividend income of $5.9 million, interest income of $4.1 million and a
      foreign exchange gain of $11.1 million, partially offset by a share of
      loss of associates of $3.5 million and finance costs of $0.6
    million.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (i) | The effective income tax rate for 2016 is 19% compared to
      22% in 2015. The statutory rate in 2016 and 2015 is 26.9%. The elements
      that impacted the effective income taxes are the non-taxable (or
      deductible) part of capital gains (or losses) (50%), the investments in
      flow-through shares, non-taxable dividend income, non-deductible expenses
      and a reduction in the tax rate over the next four years in the Province
      of Québec. In addition, in the fourth quarter of 2016, the Company
      incurred a current income tax expense of $1.3 million related to
      exploration tax credits claimed. As at December 31, 2016, there is no
      income tax payable.                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | In 2015, the income tax expense is only related to
      deferred income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

15

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Liquidity and Capital Resources

As at December 31, 2016, the Companys cash and cash
equivalents amounted to $499.2 million compared to $258.5 million as at December
31, 2015.

On February 12, 2016, the Company closed a financing with
Ressources Québec, a wholly-owned subsidiary of Investissement Québec, a public
corporation of the Government of Québec. Ressources Québec subscribed to a $50.0
million convertible debenture of Osisko, which will mature in five years and
will bear interest at an annual rate of 4% payable quarterly. Ressources Québec
will be entitled, at its option, to convert the debenture into common shares of
the Company at a price of $19.08 at any time during the term of the debenture.
Osisko paid a 1% financing fee to Ressources Québec and reimbursed its costs
incurred in connection with the financing.

On February 26, 2016, the Company closed a bought deal public
offering of 11,431,000 units of Osisko (Units), including the full exercise of
the over-allotment option by the underwriters of the Offering, at a price of
$15.10 per Unit for aggregate gross proceeds of $172.6 million (net proceeds of
$164.6 million).

The investments of non-controlling interests also increased
liquidities by $3.6 million in the first quarter of 2016 and $0.9 million in the
fourth quarter of 2016.

The exercise of share options generated $5.0 million and the
Company paid $15.3 million in dividends to its shareholders in 2016.

In 2016, Osisko invested $82.4 million in investments, $55.3
million in royalty interests and $8.3 million in exploration and evaluation
activities (net of governmental tax credits). The sale of royalty interests to
CDPQ generated $3.6 million in the same period and the sale of investments
generated $129.2 million.

Furthermore, the Company has access to a credit facility of
$150.0 million that can be increased by $50.0 million at Osiskos request,
subject to standard due diligence procedures by the financial institutions. The
Facility is to be used for investments in the mineral industry, including the
acquisition of royalties and the funding of precious metal streams. The Facility
is secured by the Companys assets (including the royalty interests) and has a
two-year term (December 23, 2017), which can be extended by one year on each
anniversary date.

Cash Flows

The following table summarizes the cash flows (in thousands of
dollars):

|                                                                    |  | Years ended December 31, |  
|------------------------------------------------------------------- |  | ------------------------ | -
|                                                                    |  | 2016                     |  
|                                                                    |  | **$**                    |  
|Cash flows                                                          |  |                          |  
|Operations                                                          |  | 54,219                   |  
|Working capital items                                               |  | (775                     | )
|Operating activities                                                |  | 53,444                   |  
|Investing activities                                                |  | (15,053                  | )
|Financing activities                                                |  | 208,200                  |  
|Effects of exchange rate
      changes on cash and cash equivalents |  | (5,851                   | )
|Increase in cash and cash
      equivalents                         |  | 240,740                  |  
|Cash and cash equivalents 
      January 1                         |  | 258,509                  |  
|Cash and cash equivalents  December 31                             |  | 499,249                  |  

Operating Activities

Cash flows provided by operating activities in 2016 amounted to
$53.4 million, compared to $28.9 million in 2015.

The increase in 2016 compared to 2015 is mainly due to higher
revenues from the sale of gold and silver received from royalty agreements as
royalties earned increased compared to the previous year.

16

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Investing Activities

Cash flows used in investing activities amounted to $15.1
million in 2016 compared to $140.7 million in 2015. In 2016, the Company
invested $82.4 million in marketable securities, $55.3 million in royalty
interests, including $23.0 million for a royalty on the Cariboo gold project
held by Barkerville (an associate), $10.0 million for a royalty on the Hermosa
project held by Arizona Mining and $10.0 million for a royalty or stream
financing (to be negotiated) on the Horne 5 project held by Falco (an associate)
and $8.3 million in exploration and evaluation assets (net of investment tax
credits), mainly on the Coulon project and other projects in the James Bay
territory. Osisko received proceeds of $129.2 million from the sale of
investments, including $98.2 million from the sale of shares of LIORC, and $3.6
million from the sale of royalty interests in 2016.

In 2015, the Company invested $171.5 million in marketable
securities, including $105.3 million in shares of LIORC. Investments in royalty
interests amounted to $32.2 million in 2015, including $24.2 million to acquire
a portfolio of royalty interests from Teck. Investments in exploration and
evaluation assets amounted to $6.1 million (net of investment tax credits),
mainly on the Coulon project and other projects on the James Bay territory.
Disposals of short-term investments in 2015 generated proceeds of $34.5 million
(these short-term investments were acquired through the acquisition of
Virginia). Cash acquired in the acquisition of Virginia in the first quarter of
2015 amounted to $34.9 million.

Financing Activities

In 2016, cash flows provided by financing activities reached
$208.2 million compared to $184.0 million in 2015. In 2016, cash inflows were
the results of a financing with Ressources Québec for a $50.0 million
convertible debenture and a bought deal public offering of 11,431,000 units of
Osisko for gross proceeds of $172.6 million, both completed during the first
quarter. Investments of non-controlling interests also increased liquidities by
$4.5 million and the exercise of share options and the shares purchase plan
generated $5.3 million. The Company paid $8.9 million in share issue costs and
financing fees and $15.3 million in dividends to its shareholders during the
same period.

In 2015, cash inflows were the results of a financing of
Special Warrants that generated gross proceeds of $200.0 million and the
exercise of replacement share options of Virginia that generated $4.9 million.
Special Warrants and share issue expenses of $10.9 million were paid in 2015.
Dividends of $9.8 million were paid to shareholders in 2015.

17

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

The following table summarizes the financings completed since
the creation of Osisko Gold Royalties Ltd:

|                                                    |  | No of Shares/ |  |  | Price |  |  | Gross    |   |  | Net Cash |  
|--------------------------------------------------- |  | ------------- |  |  | ----- |  |  | -------- | - |  | -------- | -
|                                                    |  | Units         |  |  | ($)   |  |  | Proceeds |   |  | Proceeds |  
|                                                    |  |               |  |  |       |  |  | ($000s  | ) |  | ($000s  | )
|                                                    |  |               |  |  |       |  |  |          |   |  |          |  
|2017 (as of March 15,
      2017)                   |  |               |  |  |       |  |  |          |   |  |          |  
|Exercise of replacement share
      options(iv)     |  | 38,519        |  |  | 11.75 |  |  | 453      |   |  | 453      |  
|Employee share purchase plan                        |  | 4,098         |  |  | 12.88 |  |  | 53       |   |  | 53       |  
|Total                                               |  | 42,617        |  |  |       |  |  | 506      |   |  | 506      |  
|2016                                                |  |               |  |  |       |  |  |          |   |  |          |  
|Convertible debenture(i)                            |  | n/a           |  |  | n/a   |  |  | 50,000   |   |  | 49,225   |  
|Issuance of Units
      (bought-deal financing)(ii) |  | 11,431,000    |  |  | 15.10 |  |  | 172,608  |   |  | 164,543  |  
|Exercise of share options                           |  | 12,335        |  |  | 15.22 |  |  | 188      |   |  | 188      |  
|Exercise of replacement share
      options(iv)     |  | 505,756       |  |  | 9.50  |  |  | 4,806    |   |  | 4,806    |  
|Employee share purchase plan                        |  | 21,762        |  |  | 15.27 |  |  | 332      |   |  | 332      |  
|Total                                               |  | 11,970,853    |  |  |       |  |  | 227,934  |   |  | 219,094  |  
|                                                    |  |               |  |  |       |  |  |          |   |  |          |  
|2015                                                |  |               |  |  |       |  |  |          |   |  |          |  
|Issuance of special warrants(iii)                   |  | 10,960,000    |  |  | 18.25 |  |  | 200,020  |   |  | 189,158  |  
|Exercise of replacement share
      options(iv)     |  | 750,837       |  |  | 6.51  |  |  | 4,887    |   |  | 4,887    |  
|Total                                               |  | 11,710,837    |  |  |       |  |  | 204,907  |   |  | 194,045  |  
|                                                    |  |               |  |  |       |  |  |          |   |  |          |  
|2014  from June 16                                 |  |               |  |  |       |  |  |          |   |  |          |  
|Private
      placements(v)                         |  | 2,794,411     |  |  | 15.03 |  |  | 42,000   |   |  | 39,173   |  
|Total                                               |  | 2,794,411     |  |  |       |  |  | 42,000   |   |  | 39,173   |  
|                                                    |  |               |  |  |       |  |  |          |   |  |          |  
|Cumulative cash proceeds                            |  |               |  |  |       |  |  | 475,347  |   |  | 452,818  |  

| | (i)   | On February 12, 2016, Osisko closed a convertible
      debenture with Investissement Québec, maturing in February 2021 and
      bearing interest at an annual rate of 4% payable quarterly. The debenture
      is convertible at the holder option into common shares of the Company at a
      price of $19.08 at any time during the term.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | On February 26, 2016, Osisko closed a bought deal public
      offering of 11,431,000 Units, including the full exercise of the over-
      allotment option by the underwriters, at a price of $15.10 per Unit for
      aggregate gross proceeds of $172.6 million (net proceeds of $164.5
      million).                                   
| | (iii) | On March 5, 2015, the special warrants were converted
      into 10,960,000 common shares and 5,480,000 warrants exercisable at a
      price of $36.50 for a period of 7 years.                                                                                                                                                               
| | (iv)  | On the date of acquisition of Virginia, the Virginia
      share options were converted into Osisko replacement share options using
      the same exchange rate than for the common shares (0.92 replacement share
      option for each Virginia share option).                                                                              
| | (v)   | On November 17, 2014, Osisko closed two private
      placements whereby Osisko issued a total of 2,794,411 common shares to
      CDPQ and Fonds de solidarité FTQ at a price of $15.03 per common share for
      total gross proceeds of $42.0 million.                                                                                     

18

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Quarterly Information

The selected quarterly financial information for the past eight
financial quarters is outlined below: (in thousands of dollars, except for
amounts per share)

|                                                                   |  | **2016(1)** |  |  | **2015(1)** | 
|------------------------------------------------------------------ |  | ----------- |  |  | ----------- | 
|                                                                   |  | Q4          |  |  | Q3          | 
|                                                                   |  |             |  |  |             | 
|Cash and cash equivalents                                          |  | 499,249     |  |  | 392,717     | 
|Short-term investments                                             |  | 2,100       |  |  | 100         | 
|Working capital                                                    |  | 494,882     |  |  | 389,074     | 
|Total assets                                                       |  | 1,416,304   |  |  | 1,399,012   | 
|Total long-term debt                                               |  | 45,780      |  |  | 45,552      | 
|Shareholders equity                                               |  | 1,214,304   |  |  | 1,200,734   | 
|Revenues                                                           |  | 13,709      |  |  | 17,570      | 
|Net cash flows from operating activities                           |  | 12,782      |  |  | 14,978      | 
|Net earnings (loss) attributable
           to Osisko shareholders |  | 8,679       |  |  | 17,757      | 
|Basic net earnings (loss) per share                                |  | 0.08        |  |  | 0.17        | 
|Weighted average shares
           outstanding (000s)             |  |             |  |  |             | 
|- Basic                                                            |  | 106,612     |  |  | 106,564     | 
|- Diluted                                                          |  | 106,675     |  |  | 106,757     | 
|Share price  TSX - closing(2)                                     |  | 13.09       |  |  | 14.36       | 
|Share price  NYSE  closing(3)                                    |  | 9.72        |  |  | 10.94       | 
|Warrant price  TSX - closing(4)                                   |  |             |  |  |             | 
|OR.WT                                                              |  | 2.75        |  |  | 3.42        | 
|OR.WT.A                                                            |  | 2.25        |  |  | 2.70        | 
|Price of gold (average US$)                                        |  | 1,222       |  |  | 1,335       | 
|Closing exchange rate(5)
      (US$/Can$)                          |  | 1.3427      |  |  | 1.3117      | 

|(1) | Unless otherwise noted, financial information in Canadian
      dollars and prepared in accordance with IFRS.                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Osisko common shares began officially trading on the TSX
      on June 16, 2014.                                                              
|(3) | In US$. Osisko common shares began officially trading on
      the NYSE on July 6, 2016. US$13.35 was the opening price on July 6,
      2016.
|(4) | Osisko warrants began trading on March 5, 2015 and
      February 26, 2016.                                                                   
|(5) | Bank of Canada Noon Rate.                                                                                                                     

During the first quarter of 2016, the Company closed a $172.6
million equity financing and issued a $50.0 million convertible debenture.
During the first quarter of 2015, Osisko acquired Virginia for a total
consideration of $556.0 million and closed a $200.0 million equity
financing.

19

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Fourth Quarter Results

| |  | Revenues of $13.7 million compared to $12.8 million in
      the fourth quarter of 2015;                                                                                                                                   
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Operating income of $6.8 million compared to $4.0 million
      in the fourth quarter of 2015;                                                                                                                             
| |  | Net earnings attributable to Osisko shareholders of $8.7
      million or $0.08 per basic share and diluted share, compared to $4.6
      million or $0.05 per basic and diluted share in the fourth quarter of
      2015;
| |  | Adjusted earnings1of $6.9 million or $0.07
      per basic share1compared to $6.1 million or $0.06 per basic
      share in the fourth quarter of 2015;                                                                    
| |  | Net cash flows provided by operating activities before
      change in non-cash working capital items of $11.8 million compared to $8.2
      million in the fourth quarter of 2015;                                       
| |  | Sale of the majority of the investment in Labrador Iron
      Ore Royalty Corporation for proceeds of $98.2 million.                                                                                                       

Revenues increased in the fourth quarter of 2016 as a result of
higher in-kind royalties earned and sold. Gold royalties earned from the
Canadian Malartic mine decreased by 838 ounces or 11% (sales decreased by 1,308
ounces), but the decrease from the Canadian Malartic mine was more than offset
by the gold royalties earned from the Éléonore, Island Gold and Vezza NSR
royalties. The Company earned and sold 1,343 ounces of gold from the Éléonore
mine compared to 402 ounces in the fourth quarter of 2015. The Company received
and sold 292 ounces of gold from its Island Gold mine NSR royalty and received
342 ounces of gold from its Vezza NSR royalty and sold 242 ounces of gold in the
fourth quarter of 2016 compared to nil in the fourth quarter of 2015. These
royalties were acquired in 2015. The average selling price of gold in Canadian
dollars was also higher in the fourth quarter of 2016 at $1,549 compared to
$1,491 in the fourth quarter of 2015.

In the fourth quarter of 2016, operating income amounted to
$6.8 million compared to $4.0 million in the fourth quarter of 2015. The
increase in net operating income in the fourth quarter of 2016 is mainly the
result of higher revenues generated from the sale of gold and silver, an
exploration tax credit recovery and lower business development expenses,
partially offset by the depletion of royalty interests. The decrease in business
development expenses is mainly the result of the streamlining of the Companys
operations in the third quarter of 2016.

The increase in net earnings in the fourth quarter of 2016 is
mainly the result of the increase in operating income and other income. Dividend
revenues decreased in the fourth quarter of 2016, following the sale of most of
the investment in Labrador Iron Ore Royalty Corporation during the quarter.

The increase of $0.8 million in adjusted earnings in the fourth
quarter of 2016 compared to 2015 is mainly due to an increase in operating
income.

Net cash flows provided by operating activities before change
in working capital items increased in the fourth quarter of 2016 mainly as a
result of higher revenues when compared to the same period in 2015.

|_____________________________
|-----------------------------
|1                            

20

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

The financial results for the fourth quarter are as follows (in
thousands of dollars, except amounts per share):

|                                         |  |     |  |  | Three months
      ended December 31, |  
|---------------------------------------- |  | --- |  |  | ------------------------------------- | -
|                                         |  |     |  |  | 2016                                  |  
|                                         |  |     |  |  | **$**                                 |  
|                                         |  |     |  |  |                                       |  
|Revenues                                 |  | (a) |  |  | 13,709                                |  
|                                         |  |     |  |  |                                       |  
|Expenses                                 |  |     |  |  |                                       |  
|Depletion of royalty interests           |  | (b) |  |  | (2,828                                | )
|General and administrative               |  | (c) |  |  | (4,127                                | )
|Business development                     |  | (d) |  |  | (1,863                                | )
|Exploration and evaluation               |  | (e) |  |  | 2,176                                 |  
|Other expenses, net                      |  | (f) |  |  | (1,124                                | )
|Cost recoveries from associates          |  | (g) |  |  | 873                                   |  
|                                         |  |     |  |  |                                       |  
|Operating income                         |  |     |  |  | 6,816                                 |  
|                                         |  |     |  |  |                                       |  
|Other income, net                        |  | (h) |  |  | 3,405                                 |  
|                                         |  |     |  |  |                                       |  
|Earnings before income taxes             |  |     |  |  | 10,221                                |  
|                                         |  |     |  |  |                                       |  
|Income tax expense                       |  | (i) |  |  | (1,568                                | )
|                                         |  |     |  |  |                                       |  
|Net earnings                             |  |     |  |  | 8,653                                 |  
|                                         |  |     |  |  |                                       |  
|Net earnings (loss) attributable to:     |  |     |  |  |                                       |  
|Osiskos shareholders                    |  |     |  |  | 8,679                                 |  
|Non-controlling interests                |  |     |  |  | (26                                   | )
|                                         |  |     |  |  |                                       |  
|Basic and diluted net earnings per share |  |     |  |  | 0.08                                  |  

| | (a) | Revenues are comprised of the
following:
| | --- | ----------------------------------------

| |                          |  | Three months ended December 31,
      2016 |  |  | Three months ended December 31,
      2015 | 
| | ------------------------ |  | ------------------------------------------ |  |  | ------------------------------------------ | 
| |                          |  | Average                                    |  |  |                                            | 
| |                          |  | selling price                              |  |  | Ounces                                     | 
| |                          |  | per ounce                                  |  |  | Sold                                       | 
| |                          |  | ($)                                        |  |  |                                            | 
| |                          |  |                                            |  |  |                                            | 
| | Gold sold                |  | 1,549                                      |  |  | 8,605                                      | 
| | Silver sold              |  | 21                                         |  |  | 8,353                                      | 
| | Royalties (paid in cash) |  | -                                          |  |  | -                                          | 
| |                          |  |                                            |  |  |                                            | 

| | (b) | The royalty interests are depleted using the
      units-of-production method over the life of the properties. Depletion of
      royalty interests represents mainly the depletion of the Éléonore royalty
      interest acquired in February 2015 and the depletion of the Island Gold
      and Vezza royalty interests.                                                                                                                                                                                                                                                                         
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | In the fourth quarter of 2016, G&A expenses amounted
      to $4.1 million, similar to the fourth quarter of 2015 expenses of $4.2
      million.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (d) | Business development expenses totaled $1.9 million in the
      fourth quarter of 2016 compared to $3.5 million in the fourth quarter of
      2015. The decrease is mainly the result of the streamlining of the
      Companys operations.                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (e) | In the fourth quarter of 2016, the use of exploration tax
      credits of $2.2 million resulted in a net recovery of $2.2 million in
      exploration and evaluation. Excluding these exploration tax credits,
      expenses in exploration and evaluation amounted to $47,000 in the fourth
      quarter of 2016 compared to $1.0 million in the fourth quarter of 2015.
      Through the farm-out agreement concluded with Osisko Mining in October
      2016 and reduction of activities in Mexico, the Companys exploration and
      evaluation expenses have been significantly reduced.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (f) | In the fourth quarter of 2016, other expenses are
      comprised of a write-off of property and equipment of $0.5 million and an
      impairment charge on exploration and evaluation assets of $0.7 million
      (the Company wrote-off a grassroots project in the James Bay area where it
      does not expect substantial expenses to be incurred in the
  future).                                                                                                                                                                                                                          

21

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

| |     | In the fourth quarter of 2015, other gains are of an
      impairment charge on exploration and evaluation assets of $0.2 million
      (the Company wrote-off some abandoned grassroots projects in the James Bay
      area).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (g) | Cost recoveries from associates represent costs incurred
      by Osisko for professional services rendered to associates as well as
      renting of office space. The number of service agreements and the level of
      services with associates have increased in the last year, explaining the
      increase in cost recoveries in 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (h) | Other net income of $3.4 million in the fourth quarter of
      2016 includes a net gain on investments of $0.7 million, dividend income
      of $0.2 million, interest revenues of $1.0 million and a foreign exchange
      gain of $5.3 million, partially offset by a share of loss of associates of
      $2.9 million and finance costs of $0.9 million. Other net income in the
      fourth quarter of 2015 includes a gain on foreign exchange of $4.5
      million, dividend income of $1.6 million and interest income of $0.7
      million, partially offset by a share of loss of associates of $1.2
      million, a net loss on dilution of investments in associates of $0.5
      million, an impairment charge on investments in associates of $1.0
      million, a net loss on financial assets of $1.3 million and finance costs
      of $0.2 million.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (i) | The effective income tax rate for the three months ended
      December 31, 2016 is 15% compared to 30% in 2015. The statutory rate in
      2016 and 2015 is 26.9%. The elements that impacted the effective income
      taxes are the non-taxable (or deductible) part of capital gains (or
      losses) (50%), the investments in flow-through shares, non-taxable
      dividend income, non-deductible expenses and a reduction in the tax rate
      over the next four years in the Province of Québec. In addition, in the
      fourth quarter of 2016, the Company incurred a current income tax expense
      of $1.3 million related to exploration tax credits claimed. As at December
      31, 2016, there is no income tax payable.                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | In 2015, the income tax expense is only related to
      deferred income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Outlook

Osiskos 2017 outlook on royalties and stream is based on the
publicly available forecasts, in particular the forecasts for the Canadian
Malartic mine published by Yamana and Agnico Eagle, for the Éléonore mine
published by Goldcorp and for the Island Gold mine published by Richmont Mines.
For royalties earned on properties where no public information is available,
Osisko obtains internal forecasts from the producers or uses managements best
estimate.

Attributable gold equivalent ounces for 2017 are estimated
between 43,300 and 46,100 and are detailed as follows:

2017Canadian Malartic
    30,500  31,500Éléonore
    6,800  7,000Island Gold
    1,400  1,600Gibraltar stream
    2,600  3,000Others
    2,000  3,000Gold equivalent ounces
    43,300 46,100


For our 2017 guidance, silver and cash royalties have been
converted to GEOs using commodity prices of US$1,250 per ounce of gold and US$18
per ounce of silver and an exchange rate (US$/C$) of 1.30.

Following the earn-in agreement reached with Osisko Mining, the
Companys exploration and evaluation expenses will be mainly for the Coulon
project and is estimated at $3.1 million ($1.7 million net of estimated
exploration tax credits), of which about $2.2 million will be financed by Québec
institutions and other partners.

Related Party Transactions

In 2016, an amount of $4,750,000 ($1,526,000 in 2015) was
invoiced by Osisko to associates for recoveries of costs related to professional
services and rental of offices, including respectively $1,711,000 for
professional services related to capitalized exploration and evaluation
activities. In 2016, an amount of $231,000 (nil in 2015) was also invoiced to
Osisko by an associate for professional services and rental of offices,
including $227,000 related to capitalized exploration and evaluation activities.
As at December 31, 2016, an amount of $720,000 (including sales taxes) is
receivable from associates and included in accounts receivable ($1,188,000 as at
December 31, 2015) and an amount of $1,000 (including sales taxes) is payable to
an associate and included in accounts payable and accrued liabilities (nil as at
December 31, 2015).

22

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

During the years ended December 31, 2016 and 2015, certain
directors and officers of Osisko have participated in financings completed by
certain associates. Each of these transactions were concluded under the same
terms and conditions offered to the other participants.

In 2016, an interest revenue  of $418,000 (nil in
2015) was accounted for and is receivable as at December 31, 2016, with regards to the $10.0 million financing completed in
May 2016 with Falco, an associate of Osisko.

Please refer to the Portfolio of Investments section of this
MD&A for other related party transactions with associates.

Contractual Obligations and Commitments

The Company is committed to minimum amounts under long-term
lease agreements for office space, which expire at the latest in 2019. As at
December 31, 2016, minimum commitments remaining under these leases were
approximately $2,501,000 over the following years (in thousands of dollars):

|     |  | **$** | 
|---- |  | ----- | 
|     |  |       | 
|2017 |  | 847   | 
|2018 |  | 802   | 
|2019 |  | 852   | 
|     |  | 2,501 | 

Off-balance Sheet Items

There are no off-balance sheet arrangements.

Outstanding Share Data

As of March 15, 2017, 106,555,805 common shares were issued and
outstanding. A total of 3,015,278 share options and 11,195,500 warrants were
outstanding to purchase common shares. A convertible debenture of $50.0 million
with Ressources Québec is also outstanding, which entitles the holder to convert
the debenture, at its option, into 2,620,545 common shares of the Company
(conversion price of $19.08) at any time during the term of the debenture.

Subsequent Events to 2016

Gibraltar (Taseko Mines Limited)

As previously discussed in this MD&A, Osisko announced on
February 27, 2017, that it has agreed to acquire from Gibraltar Mines Ltd., a
wholly-owned subsidiary of Taseko, a silver stream with reference to silver
produced at the Gibraltar copper mine, located in British Columbia, Canada.
Osisko will pay Taseko cash consideration of US$33 million ($43.2 million) for
the silver stream. In addition, Osisko will make ongoing payments of US$2.75
($3.60) per ounce of silver delivered.

Dividends

On March 15, 2017, the Board of Directors declared a quarterly
dividend of $0.04 per common share payable on April 17, 2017 to shareholders of
record as of the close of business on March 31, 2017.

Annual General Meeting

On May 4, 2016, Osisko held its Annual General Meeting where
each of the 9 nominees listed in the Management Information Circular filed on
April 7, 2016 with regulatory authorities were elected as directors of the
Company. All other resolutions provided for in the Management Information
Circular were duly passed, including the advisory resolution on executive
compensation approved at 97.7% .

23

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Corporate Update

On May 4, 2016, Mr. Christopher C. Curfman was elected to the
Board of Directors of Osisko. During his 21 years of career at Caterpillar, Mr.
Curfman held several progressive positions in Asia, Australia and the USA,
including Senior Vice President of Caterpillar, and President of Caterpillar
Global Mining from 2011 to his retirement at the end of 2015.

On December 12, 2016, Osisko appointed Mr. Jacques Perron to
its Board of Directors. Mr. Perron has more than 30 years of progressive
experience in the mining industry. He was most recently the Chief Executive
Officer of Thompson Creek Metals Company Inc. (TCM) where he oversaw the
start-up and ramp-up of the Mount Milligan Mine and was instrumental in the sale
of TCM to Centerra Gold Inc.

On August 18, 2016, Osisko announced that Messrs. John
Burzynski, Senior Vice President New Business Development, and Robert Wares,
Chief Geologist, have resigned from their executive positions with Osisko
effective August 31, 2016 in order to focus their efforts on Osisko Mining. Mr.
Burzynski remains as a Director of Osisko.

Mr. André Gaumond, Senior Vice President, Northern Development,
has announced his retirement effective November 30, 2016. The Company continues
to benefit from his relationships and knowledge as he continues his
participation on the Board of Directors. Mr. Gaumond was the founder of Virginia
Mines and one of the Companys largest individual shareholders.

On November 9, 2016, Mr. Vincent Metcalfe and Mr. Frédéric Ruel
were appointed as Vice President, Investor Relations and Vice President and
Corporate Controller respectively. Both individuals have contributed to the
development of Osisko Gold Royalties and will continue to actively participate
in the growth of the Company.

Mr. Paul Archer, formerly Vice President, Northern Exploration
now undertakes the role of Chief Geologist for the Company. Mr. Archer joined
Osisko as part of the Virginia Mines transaction in February 2015 and was a
member of the Éléonore discovery team.

Risks and Uncertainties

The Company is a royalty holder and investor that operates in
an industry that is dependent on a number of factors that include environmental,
legal and political risks, the discovery of economically recoverable reserves
and the ability of third-party partners to maintain an economic production. An
investment in the Companys common shares is subject to a number of risks and
uncertainties. An investor should carefully consider the risks described below
and the other information filed with the Canadian securities regulators and the
U.S. Securities and Exchange Commission (SEC) before investing in the
Company's common shares. If any of the following risks occur, or if others
occur, the Company's business, operating results and financial condition could
be seriously harmed and investors may lose a significant proportion of their
investment.

There are important risks which management believes could
impact the Companys business. For information on risks and uncertainties,
please also refer to the Risk Factors section of our most recent Annual
Information Form filed with the Canadian securities regulatory authorities on
SEDAR at www.sedar.com and with the SEC on EDGAR at www.sec.gov.

Disclosure Controls and Procedures and Internal Control Over
Financial Reporting

Disclosure Controls and Procedures

The Chief Executive Officer (the CEO) and the Chief Financial
Officer (the CFO) of the Company are responsible for establishing and
maintaining the Companys disclosure controls and procedures (DCP) including
adherence to the Disclosure Policy adopted by the Company. The Disclosure Policy
requires all staff to keep senior management fully apprised of all material
information affecting the Company so that they may evaluate and discuss this
information and determine the appropriateness and timing for public disclosure.

The Company maintains DCP designed to ensure that information
required to be disclosed in reports filed under applicable Canadian securities
laws and the U.S. Securities Exchange Act of 1934, as amended, (the Exchange
Act), is recorded, processed, summarized and reported within the appropriate
time periods and that such information is accumulated and communicated to the
Companys management, including the CEO and CFO, to allow for timely decisions
regarding required disclosure.

24

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

As required by applicable Canadian securities laws and Rule
13a-15(b) under the Exchange Act, the Company conducted an evaluation, under the
supervision and with the participation of the management, including the CEO and
CFO, of the effectiveness of the design and operation of the Companys DCP as of
December 31, 2016. Based on that evaluation, the CEO and CFO concluded that, as
of December 31, 2016, the design and operation of the Companys DCP provide
reasonable assurance that they are effective.

In designing and evaluating DCP, the Company recognizes that
any disclosure controls and procedures, no matter how well conceived or
operated, can only provide reasonable, not absolute, assurance that the
objectives of the control system are met, and management is required to exercise
its judgment in evaluating the cost-benefit relationship of possible controls
and procedures.

Internal Control over Financial Reporting

The Companys management, including the CEO and the CFO, are
responsible for establishing and maintaining adequate internal control over
financial reporting (ICFR) for the Company to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with IFRS. The
fundamental issue is ensuring all transactions are properly authorized and
identified and entered into a well-designed, robust and clearly understood
accounting system on a timely basis to minimize risk of inaccuracy, failure to
fairly reflect transactions, failure to fairly record transactions necessary to
present financial statements in accordance with IFRS, unauthorized receipts and
expenditures, or the inability to provide assurance that unauthorized
acquisitions or dispositions of assets can be detected.

The CEO and CFO have evaluated whether there were changes to
the ICFR during the three months and year ended December 31, 2016 that have
materially affected, or are reasonably likely to materially affect, the ICFR. No
such changes were identified through their evaluation.

The CEO and CFO have also evaluated the effectiveness of the
Companys ICFR as required by National Instrument 52-109 issued by the Canadian
Securities Administrators and the Exchange Act based on the framework and
criteria established in Internal Control  Integrated Framework (2013) as issued
by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
Based on this evaluation, the CEO and CFO concluded that the Companys ICFR was
effective as of December 31, 2016.

The Companys ICFR may not prevent or detect all misstatements
because of inherent limitations. Additionally, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because changes in conditions or deterioration in the degree of
compliance with the Companys policies and procedures.

The Companys registered public accounting firm is not required
to provide, and has not provided, an attestation report on the Companys ICFR
due to a transition period established by rules of the SEC for newly listed
companies.

Basis of Presentation of Consolidated Financial Statements

The consolidated financial statements have been prepared in
accordance with IFRS as issued by the IASB. The accounting policies, methods of
computation and presentation applied in the consolidated financial statements
are consistent with those of the previous financial year, except for early
adoption of IFRS 9, Financial Instruments, as discussed below.

The accounting policies, methods of computation and
presentation applied to each of the 2016 quarterly unaudited condensed interim
consolidated financial statements are consistent with those applied by the
Company to the audited consolidated financial statements for the year ended
December 31, 2016.

The significant accounting policies of Osisko are detailed in
the notes to the audited consolidated financial statements for the year ended
December 31, 2016 filed on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).

New accounting standard - IFRS 9,Financial
Instruments(IFRS 9)

The Company has elected to early adopt IFRS 9. This standard
essentially completes the project to replace IAS 39, Financial Instruments:
Recognition and Measurement (IAS 39). IFRS 9 replaces the current multiple
classification and measurement models for financial assets and liabilities with
a single model that has only three classification categories: amortized cost, fair value through other comprehensive income
and fair value through profit or loss. The basis of classification depends on
the entitys business model and the contractual cash flow characteristics of the
financial asset or liability. It also introduces additional changes relating to
financial liabilities and aligns hedge accounting more closely with risk
management. Under IFRS 9, equity instruments are classified as financial
instruments carried at fair value, with changes in fair value recorded in the
consolidated statement of income unless such financial instruments are not held
for trading, in which case, the financial instrument may be irrevocably
designated as fair value through other comprehensive income on initial
recognition without subsequent reclassification to net income or loss.

25

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

The Company has adopted IFRS 9 on January 1, 2016 on a
retrospective basis without restating comparatives figures. Accordingly, the
Company has classified its financial instruments in the three new classification
categories as presented below. The main change concerns the classification of
investments in equity that were previously classified as
available-for-sale and are now designated as financial assets at fair
value through other comprehensive income under IFRS 9. The main objective of the
Companys investments in equity is to improve its ability to acquire interests
in exploration assets, future royalties or revenue streams. As a result, the
Company considers that this classification better reflects the main business
nature of the investment. The effect of the implementation of IFRS 9 to the
Companys consolidated financial statements was to reinstate in accumulated
other comprehensive loss, the impairment losses on investments in equity
securities (other than those held for trading, which include the derivatives)
previously included in profit or loss. Cumulative gains and losses on
investments in equity are transferred from accumulated other comprehensive
income to retained earnings upon derecognition of the investment. The
implementation of IFRS 9 did not result in any significant changes to the
measurement of the Companys financial instruments.

The net impact of the implementation of IFRS 9 on the balance
sheet as at January 1, 2016 is as follows:

|                                           |  | As at             |   |  | IFRS 9     |   |  | As at           |  
|------------------------------------------ |  | ----------------- | - |  | ---------- | - |  | --------------- | -
|                                           |  | December 31, 2015 |   |  | adjustment |   |  | January 1, 2016 |  
|                                           |  | **$**             |   |  | **$**      |   |  | **$**           |  
|Accumulated other
      comprehensive loss |  | (41,203           | ) |  | (7,610     | ) |  | (48,813         | )
|Retained earnings                          |  | 203,800           |   |  | 7,610      |   |  | 211,410         |  

Changes to accounting policies  Financial instruments

As a result of the early adoption of IFRS 9, the Company has
modified the following elements of its accounting policy for financial
instruments:

Measurement after initial recognition depends on the
classification of the financial instrument. The Company has classified its
financial instruments in the following categories depending on the purpose for
which the instruments were acquired and their characteristics.

|(i) | Financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Debt instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Investments in debt instruments are subsequently measured
      at amortized cost when the asset is held within a business model whose
      objective is to hold assets in order to collect contractual cash flows and
      when the contractual terms of the financial asset give rise on specified
      dates to cash flows that are solely payments of principal and interest on
      the principal amount outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Investments in debt instruments are subsequently measured
      at fair value when they do not qualify for measurement at amortized cost.
      Financial instruments subsequently measured at fair value can be carried
      at fair value with changes in fair value recorded in net income or loss
      unless they are held within a business model whose objective is to hold
      assets in order to collect contractual cash flows or sell the assets and
      when the contractual terms of the financial asset give rise on specified
      dates to cash flows that are solely payments of principal and interest on
      the principal amount outstanding, in which case unrealised gains and
      losses are initially recognized in other comprehensive income for
      subsequent reclassification to net income or loss through amortization of
      premiums and discounts, impairment or derecognition.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Equity instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Investments in equity instruments are subsequently
      measured at fair value with changes recorded in net income (loss). Equity
      instruments that are not held for trading can be irrevocably designated as
      fair value through other comprehensive income on initial recognition without subsequent
reclassification to net income (loss). Cumulative gains and losses are
transferred from accumulated other comprehensive income to retained earnings
upon derecognition of the investment.                                                                                                                                                                                                                                                                                                                                                                                                                     

26

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

|     | Dividend income on equity instruments measured at fair
      value through other comprehensive income is recognized in the statement of
      income.                                                                                                                                                            
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                  
|(ii) | Financial Liabilities                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                  
|     | Financial liabilities are subsequently measured at
      amortized cost using the effective interest method, except for financial
      liabilities at fair value through profit or loss. Such liabilities,
      including derivatives that are liabilities, shall be subsequently measured
      at fair value.

The Company has classified its financial instruments as
follows:

Category
    Financial instrumentFinancial assets at amortized cost
    Bank balances and cash on handGuaranteed investment certificatesShort-term debt securitiesBondsNotes receivableTrade receivablesInterest and dividend income receivableAmounts receivable from associates and other
      receivablesFinancial assets at fair value through profit or loss
    Investments in derivativesFinancial assets at fair value through other comprehensive
      income
    Investments in shares and equity instruments,
      other than in derivativesFinancial liabilities at amortized cost
    Accounts payable and accrued liabilitiesLiability related to share exchange rightsLiability component of convertible debenture


Critical Accounting Estimates and Judgements

Estimates and assumptions are continually evaluated and are
based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. The
determination of estimates requires the exercise of judgement based on various
assumptions and other factors such as historical experience and current and
expected economic conditions. Actual results could differ from those estimates.

Critical judgements in applying the Companys accounting
policies are detailed in the audited consolidated financial statements for the
year ended December 31, 2016 filed on SEDAR (www.sedar.com) and EDGAR
(www.sec.gov).

Financial Instruments

All financial instruments are required to be measured at fair
value on initial recognition. The fair value is based on quoted market prices,
unless the financial instruments are not traded in an active market. In this
case, the fair value is determined by using valuation techniques like the
Black-Scholes option pricing model or other valuation techniques. Measurement in
subsequent periods depends on the classification of the financial instrument. A
description of financial instruments and their fair value is included in the
audited consolidated financial statements for the year ended December 31, 2016
filed on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).

27

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Non-IFRS Financial Performance Measures

The Company has included certain non-IFRS measures including
Adjusted EarningsandAdjusted Earnings per shareto
supplement its consolidated financial statements, which are presented in
accordance with IFRS.

The Company believes that these measures, together with
measures determined in accordance with IFRS, provide investors with an improved
ability to evaluate the underlying performance of the Company. Non-IFRS measures
do not have any standardized meaning prescribed under IFRS, and therefore they
may not be comparable to similar measures employed by other companies. The data
is intended to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared in accordance
with IFRS.

To determine its method of calculation, the Company has
reviewed, during the first quarter of 2016, similar adjusted earnings
calculations by its peers. Following this review, the Company has decided to
exclude the gains and losses on foreign exchange from its adjusted earnings and
adjusted earnings per share as they do not reflect the operating performance of
the Company.

Adjusted Earnings and Adjusted Earnings per Share

Adjusted earnings is defined as Net earnings (loss)
attributable to Osiskos shareholders less certain items: Foreign exchange
gain (loss), Impairment of exploration and evaluation assets, Gains (losses)
on disposal of evaluation and evaluation assets, Write-off of property and
equipment, Unrealized gain (loss) on investments, Impairment on financial
assets and investments in associates, Share of income (loss) of associates,
Deferred income tax expense and other unusual items such as transaction costs.

Adjusted earnings per share is obtained from the adjusted
earnings divided by the Weighted average number of common shares outstanding
for the period.

|                                                                   |  | Three months
      ended |   |  |              |   |  | Years ended |  
|------------------------------------------------------------------ |  | ------------------------ | - |  | ------------ | - |  | ----------- | -
|                                                                   |  |                          |   |  | December 31, |   |  |             |  
|                                                                   |  | 2016                     |   |  | 2015         |   |  | 2016        |  
|(in thousands of dollars, except per                               |  | **$**                    |   |  | **$**        |   |  | **$**       |  
|share amounts)                                                     |  |                          |   |  |              |   |  |             |  
|                                                                   |  |                          |   |  |              |   |  |             |  
|Net earnings attributable to Osiskos
      shareholders           |  | 8,679                    |   |  | 4,614        |   |  | 42,113      |  
|                                                                   |  |                          |   |  |              |   |  |             |  
|Adjustments:                                                       |  |                          |   |  |              |   |  |             |  
|Foreign exchange loss (gain)                                       |  | (5,319                   | ) |  | (4,459       | ) |  | 5,851       |  
|Unrealized loss (gain) on
      investments                        |  | (660                     | ) |  | 1,527        |   |  | (30,202     | )
|Share of loss of associates                                        |  | 2,893                    |   |  | 1,248        |   |  | 6,623       |  
|Impairment on
      available-for-sale asset                       |  | -                        |   |  | 1,035        |   |  | -           |  
|Impairment of exploration
      and evaluation assets              |  | 668                      |   |  | 192          |   |  | 668         |  
|Loss (gain) on disposal of
      exploration and evaluation assets |  | -                        |   |  | -            |   |  | 312         |  
|Write-off of property and
      equipment                          |  | 456                      |   |  | -            |   |  | 456         |  
|Transaction costs - Virginia                                       |  | -                        |   |  | -            |   |  | -           |  
|Deferred income tax expense                                        |  | 216                      |   |  | 1,957        |   |  | 8,372       |  
|                                                                   |  |                          |   |  |              |   |  |             |  
|Adjusted earnings                                                  |  | 6,933                    |   |  | 6,114        |   |  | 34,193      |  
|                                                                   |  |                          |   |  |              |   |  |             |  
|Weighted average number of common shares
      outstanding (000s) |  | 106,612                  |   |  | 94,445       |   |  | 104,671     |  
|                                                                   |  |                          |   |  |              |   |  |             |  
|Adjusted earnings per share                                        |  | 0.07                     |   |  | 0.06         |   |  | 0.33        |  

28

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Forward-looking Statements

Certain statements contained in this MD&A may be deemed
"forward-looking statements" within the meaning of applicable Canadian and U.S.
securities laws. All statements in this MD&A, other than statements of
historical fact, that address future events, developments or performance that
Osisko expects to occur including managements expectations regarding Osiskos
growth, results of operations, estimated future revenues, requirements for
additional capital, mineral reserve and mineral resource estimates, production
estimates, production costs and revenue, future demand for and prices of
commodities, business prospects and opportunities and outlook on gold and
currency markets are forward-looking statements. In addition, statements
(including data in tables) relating to reserves and resources and gold
equivalent ounces are forward-looking statements, as they involve implied
assessment, based on certain estimates and assumptions, and no assurance can be
given that the estimates will be realized. Forward-looking statements are
statements that are not historical facts and are generally, but not always,
identified by the words "expects", "plans", "anticipates", "believes",
"intends", "estimates", "projects", "potential", "scheduled" and similar
expressions or variations (including negative variations), or that events or
conditions "will", "would", "may", "could" or "should" occur including, without
limitation, the performance of the assets of Osisko, the realization of the
anticipated benefits deriving from Osiskos investments and transactions and the
estimate of gold equivalent ounces to be received in 2017. Although Osisko
believes the expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements involve known and unknown risks,
uncertainties and other factors, most of which are beyond the control of Osisko,
and are not guarantees of future performance and actual results may accordingly
differ materially from those in forward-looking statements. Factors that could
cause the actual results to differ materially from those in forward-looking
statements include, without limitation: fluctuations in the prices of the
commodities that drive royalties and investments held by Osisko; fluctuations in
the value of the Canadian dollar relative to the U.S. dollar; regulatory changes
by national and local governments, including permitting and licensing regimes
and taxation policies; regulations and political or economic developments in any
of the countries where properties in which Osisko holds a royalty or other
interest are located or through which they are held; risks related to the
operators of the properties in which Osisko holds a royalty or other interests;
the unfavorable outcome of litigation relating to any of the properties in which
Osisko holds a royalty or other interests; business opportunities that become available to, or are pursued by Osisko;
continued availability of capital and financing and general economic, market or
business conditions; litigation; title, permit or license disputes related to
interests on any of the properties in which Osisko holds a royalty or other
interest; development, permitting, infrastructure, operating or technical
difficulties on any of the properties in which Osisko holds a royalty or other
interest; rate and timing of production differences from resource estimates or
production forecasts by operators of properties in which Osisko holds a royalty
or other interest; risks and hazards associated with the business of exploring,
development and mining on any of the properties in which Osisko holds a royalty
or other interest, including, but not limited to unusual or unexpected
geological and metallurgical conditions, slope failures or cave-ins, flooding
and other natural disasters or civil unrest or other uninsured risks. The
forward-looking statements contained in this MD&A are based upon assumptions
management believes to be reasonable, including, without limitation: the ongoing
operation of the properties in which Osisko holds a royalty or other interest by
the owners or operators of such properties in a manner consistent with past
practice; the accuracy of public statements and disclosures made by the owners
or operators of such underlying properties; no material adverse change in the
market price of the commodities that underlie the asset portfolio; no adverse
development in respect of any significant property in which Osisko holds a
royalty, stream or other interest; the accuracy of publicly disclosed
expectations for the development of underlying properties that are not yet in
production; and the absence of any other factors that could cause actions,
events or results to differ from those anticipated, estimated or intended. For
additional information on risks, uncertainties and assumptions, please refer to
the Annual Information Form of Osisko filed on SEDAR at www.sedar.com and EDGAR
at www.sec.gov which also provides additional general assumptions in connection
with these statements. Osisko cautions that the forego ing list of risk and
uncertainties is not exhaustive. Investors and others should carefully consider
the above factors as well as the uncertainties they represent and the risk they
entail. Osisko believes that the assumptions reflected in those forward-looking
statements are reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements included in this
MD&A should not be unduly relied upon. These statements speak only as of the
date of this MD&A. Osisko undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise, other than as required by applicable law.

29

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Cautionary Note to U.S. Investors Regarding the Use of
Mineral Reserve and Mineral Resource Estimates

Osisko is subject to the reporting requirements of the
applicable Canadian securities laws, and as a result reports its mineral
reserves according to Canadian standards. Canadian reporting requirements for
disclosure of mineral properties are governed by NI 43-101. The definitions of
NI 43-101 are adopted from those given by the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM). U.S. reporting requirements are governed by
the SECs Industry Guide 7 (Guide 7). This MD&A includes estimates of
mineral reserves and mineral resources reported in accordance with NI 43-101.
These reporting standards have similar goals in terms of conveying an
appropriate level of confidence in the disclosures being reported, but embody
different approaches and definitions. For example, under Guide 7, mineralization
may not be classified as a reserve unless the determination has been made that
the mineralization could be economically and legally produced or extracted at
the time the reserve determination is made. Consequently, the definitions of
Proven Mineral Reserves and Probable Mineral Reserves under CIM standards
differ in certain respects from the standards of the SEC. Osisko also reports
estimates of mineral resources in accordance with NI 43-101. While the terms
Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource
and Inferred Mineral Resource are recognized by NI 43-101, they are not
defined terms under standards of the SEC and, generally, U.S. companies are not
permitted to report estimates of mineral resources of any category in documents
filed with the SEC. As such, certain information contained in this MD&A
concerning descriptions of mineralization and estimates of mineral reserves and
mineral resources under Canadian standards is not comparable to similar
information made public by United States companies subject to the reporting and
disclosure requirements of the SEC. Readers are cautioned not to assume that all
or any part of Measured Mineral Resources or Indicated Mineral Resources will
ever be converted into Mineral Reserves. Readers are also cautioned not to
assume that all or any part of an Inferred Mineral Resource exists, or is
economically or legally mineable. Further, an Inferred Mineral Resource has a
great amount of uncertainty as to its existence and as to its economic and legal
feasibility, and a reader cannot assume that all or any part of an Inferred
Mineral Resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of Inferred Mineral Resources may not form the basis of
feasibility or other economic studies.

|(Signed) Sean Roosen              | (Signed) Elif Lévesque                                   
|--------------------------------- | ---------------------------------------------------------
|Sean Roosen                       | Elif Lévesque                                            
|Chair and Chief Executive Officer | Vice President, Finance and Chief Financial
      Officer

March 15, 2017

30

---

|Osisko Gold Royalties      | Managements Discussion and Analysis
|-------------------------- | ------------------------------------
|2016 
      Annual Report |                                     

Corporate Information

|Corporate Office                   |                           
|---------------------------------- | --------------------------
|1100 av. des Canadiens-de-Montréal |                           
|Suite 300                          |                           
|Montréal, Québec, Canada H3B 2S2   |                           
|Tel.: (514) 940-0670               |                           
|Fax: (514) 940-0669                |                           
|Email: info@osiskogr.com           | Web site: www.osiskogr.com

|Directors                                        | Officers                                                        
|------------------------------------------------ | ----------------------------------------------------------------
|Sean Roosen, Chair and Chief Executive Officer * | Sean Roosen, Chair and Chief Executive Officer                  
|Joanne Ferstman, Lead Director                   | Bryan A. Coates, President                                      
|Françoise Bertrand                               | Luc Lessard, Senior Vice President, Technical
      Services    
|Victor H. Bradley                                | Elif Lévesque, Vice President, Finance and
      Chief          
|John Burzynski *                                 | Financial Officer                                               
|Christopher C. Curfman                           | Joseph de la Plante, Vice President, Corporate
      Development
|André Gaumond *                                  | André Le Bel, Vice President, Legal Affairs and                 
|Pierre Labbé                                     | Corporate Secretary                                             
|Charles E. Page                                  | Vincent Metcalfe, Vice President, Investor
      Relations      
|Jacques Perron                                   | Frédéric Ruel, Vice President and Corporate
      Controller    

* Non-independent

Chief Geologist and Qualified Person(as defined by
NI 43-101) Paul Archer

|Exchange listings       |                                                                        
|----------------------- | -----------------------------------------------------------------------
|Toronto Stock Exchange 
|- Common shares:        | OR                                                                     
|- Warrants:             | OR.WT (Exercise price: $36.50 / Expiry date:
      March 5, 2022)      
|                        | OR.WT.A (Exercise price: $19.08 / Expiry date:
      February 25, 2019)
|New York Stock Exchange
|- Common shares:        | OR                                                                     

Dividend Reinvestment PlanInformation available at
http://osiskogr.com/en/dividends/drip/

Transfer AgentsCanada: CST Trust Company Unites
States of America: American Stock Transfer & Trust Company, LLC

AuditorsPricewaterhouseCoopers
LLP/s.r.l./s.e.n.c.r.l.

Legal CounselsBennett Jones LLP Lavery, de
Billy LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP

31

---