Osisko Gold Royalties Ltd (TSX:OR) (NYSE:OR) (“Osisko”) is
pleased to announce that it has completed the previously announced
C$148 million financing transaction (the “Financing”) with
Victoria Gold Corp. (TSX-V:VIT) (“Victoria”), pursuant to
which Osisko acquired from Victoria a 5% net smelter return (“NSR”)
royalty (the “Royalty”) for C$98 million (the “Royalty Purchase”)
on the Dublin Gulch property (the “Property”) which hosts the Eagle
Gold project located in Yukon, Canada, and purchased from Victoria,
on a private placement basis, 100 million common shares of Victoria
at a price of C$0.50 per common share (the “Private Placement”).
Sean Roosen, Chair and Chief Executive Officer
of Osisko, commenting on the transaction, “The addition of the
Eagle royalty strengthens our Canadian asset base and adds
near-term Canadian gold to Osisko’s growth profile from a fully
permitted, fully-financed and shovel-ready project located in
Yukon, a premier mining jurisdiction. We are very pleased to
partner with Victoria to develop Canada’s next premier gold mine,
and to generate important benefits for all project
stakeholders.”
The Royalty Purchase
As part of the transaction, Osisko has purchased
a 5% NSR royalty on all metals and minerals produced from the
Property, which includes the Eagle and Olive deposits, until an
aggregate of 97,500 ounces of refined gold have been delivered to
Osisko, and a 3% NSR royalty thereafter. The purchase price for the
royalty is an aggregate of C$98 million, of which a first tranche
of C$49 million was advanced as of the date hereof, and the second
tranche of C$49 million will be funded pro rata to drawdowns under
the subordinated debt component of the Orion debt facilities.
The Private Placement
As part of the Private Placement, Osisko has
purchased 100 million common shares of Victoria at a price of
C$0.50 per common share.
Immediately prior to the closing of the Private
Placement, Osisko had beneficial ownership of, or control and
direction over, 20,427,087 common shares of Victoria, representing
approximately 4.0% of Victoria’s issued and outstanding common
shares. Immediately following the closing of the Private Placement,
Osisko owns beneficial ownership of, or control and direction over
120,427,087 common shares, representing approximately 15.7% of
Victoria’s issued and outstanding common shares. All securities
issued to Osisko under the Private Placement are subject to a
four-month hold period from the date hereof, pursuant to applicable
securities legislation. Additionally, in connection with the
Financing, Osisko has obtained the right to nominate one of the
members of Victoria’s board of directors.
Osisko acquired the common shares described in
this press release for investment purposes and in accordance with
applicable securities laws, Osisko may, from time to time and at
any time, acquire additional shares and/or other equity, debt or
other securities or instruments (collectively, “Securities”) of
Victoria Gold in the open market or otherwise, and reserves the
right to dispose of any or all of its Securities in the open market
or otherwise at any time and from time to time, and to engage in
similar transactions with respect to the Securities, the whole
depending on market conditions, the business and prospects of
Victoria and other relevant factors.
This news release is issued under the early
warning provisions of the Canadian securities legislation. A copy
of the early warning report to be filed by Osisko in connection
with the Private Placement described above will be available on
SEDAR under Victoria’s profile. To obtain a copy of the early
warning report, you may also contact Vincent Metcalfe, Vice
President, Investor Relations of Osisko at (514) 940-0670.
Victoria's head office is located at 80 Richmond St. West, Suite
303, Toronto, Ontario, M5H 2A4.
In connection with the Financing, Victoria has
also entered into, as of the date hereof, definitive and binding
agreements with an affiliate of Orion Mine Finance (“Orion”),
pursuant to which Orion has agreed to provide debt facilities to
Victoria, and has purchased from Victoria, on a private placement
basis, 150 million common shares of Victoria at a price of C$0.50
per common share. Victoria has also entered into definitive
agreements with Caterpillar Financial Services Limited with respect
to a US$50 million equipment financing facility. All of such
agreements were entered into with respect to a construction
financing package totaling approximately C$505 million in aggregate
(including the Financing) that is expected to fully fund the
development of the Project through to commercial production.
The Dublin Gulch Property and the Eagle
Gold Project
Victoria Gold’s 100%-owned Dublin Gulch gold
property is situated in the central Yukon Territory, Canada,
approximately 375 kilometres north of the capital city of
Whitehorse, and approximately 85 kilometres from the village of
Mayo. The Property is accessible by road year-round, and is located
within Yukon Energy’s electrical grid.
The Property covers an area of approximately 555
square kilometres, and is the site of Victoria’s Eagle Gold
Deposit. The Eagle Gold mine is expected to be Yukon’s next
operating gold mine and, between the Eagle and Olive deposits,
include Proven and Probable Reserves of 2.7 million ounces of gold
from 123 million tonnes of ore with a grade of 0.67 grams of gold
per tonne, as outlined in a National Instrument 43-101 feasibility
study. The NI 43-101 Mineral Resource for the Eagle and Olive
deposits has been estimated to host 191 million tonnes averaging
0.65 grams of gold per tonne, containing 4.0 million ounces of gold
in the “Measured and Indicated” category, inclusive of Proven and
Probable Reserves, and a further 24 million tonnes averaging 0.61
grams of gold per tonne, containing 0.5 million ounces of gold in
the “Inferred” category.
About Osisko Gold Royalties
Ltd
Osisko Gold Royalties Ltd is an intermediate
precious metal royalty company focused on the Americas that
commenced activities in June 2014. Osisko holds a North American
focused portfolio of over 130 royalties, streams and precious metal
offtakes. Osisko’s portfolio is anchored by five cornerstone
assets, including a 5% net smelter return royalty on the Canadian
Malartic mine, which is the largest gold mine in Canada. Osisko
also owns a portfolio of publicly held resource companies,
including a 15.5% interest in Osisko Mining Inc., a 12.7% interest
in Falco Resources Ltd. and a 32.6% interest in Barkerville Gold
Mines Ltd.
Osisko is a corporation incorporated under the
laws of the Province of Québec, with its head office located at
1100 avenue des Canadiens-de-Montréal, Suite 300, Montréal, Québec,
H3B 2S2.
Forward-Looking Statement
Certain statements contained in this press
release may be deemed “forward-looking information” and
“forward-looking statements” within the meaning of applicable
Canadian Securities Laws and the United States Private Securities
Litigation Reform Act of 1995 (collectively, the
“forward-looking statements”). All statements in
this release, 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 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
its investments and the transaction with Victoria. 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
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 held by Osisko (gold and silver); fluctuations
in the value of the Canadian dollar relative to the U.S. dollar;
regulatory changes in national and local government, 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,
influence of macroeconomic developments; 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, delays or
adverse climatic conditions 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 press release 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
further information please contact, please contact
Osisko: |
Vincent MetcalfeVice
President, Investor RelationsTel. (514)
940-0670vmetcalfe@osiskogr.com |
Joseph
de la PlanteVice President, Corporate DevelopmentTel. (514)
940-0670jdelaplante@osiskogr.com |
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