Osisko Development Secures US$50 Million Funding to Commence Underground Development at Cariboo Gold Project
March 04 2024 - 7:05AM
Osisko Development Corp. (NYSE: ODV, TSXV: ODV)
("
Osisko Development" or the
"
Company") is pleased to announce the Company has
entered into a credit agreement with National Bank of Canada (the
"
Lender") providing for a US$50 million delayed
draw term loan (the "
Credit Facility"), through
its wholly-owned subsidiary, Barkerville Gold Mines Ltd.
("
Barkerville").
The Credit Facility will be exclusively used to
fund ongoing detailed engineering and pre-construction activities
at the Company's 100%-owned Cariboo Gold Project
("Cariboo" or the "Project")
located in central British Columbia ("BC"),
Canada. This includes the commencement of an underground
development drift from the existing Cow Portal into the Project’s
mineral deposit at Lowhee Zone and extraction of 10,000 tonnes of
material under an existing permit from the Province of BC.
Sean Roosen, Chairman and CEO,
commented, "We are very pleased to secure funding that
will enable us to commence the development of a 1.2 kilometer
underground drift at Cariboo and advance important design and
engineering work ahead of the anticipated receipt of permits in Q2
2024. Completing this work is a significant step in further
de-risking the Project ahead of a construction decision by
accessing the orebody and demonstrating the performance of the
roadheader and ore sorter technologies, while we continue to
progress toward sourcing a fully-funded solution for the Project.
Importantly, this facility is non-dilutive with no early repayment
penalties, and provides us with financial flexibility to refinance
the facility prior to maturity. We appreciate National Bank's
strong support towards our vision of building Canada's next gold
mining district at Cariboo. Although the facility does not extend
to our Tintic Project, it provides for more efficient capital
allocation of our existing cash resources as we advance our ongoing
porphyry drilling efforts and exploration of epithermal gold
targets at Tintic."
KEY TERMS OF THE CREDIT
FACILITY
- Credit
Limit: US$50 million.
- Term &
Maturity Date: 12 months from the closing date, being
March 1, 2025, which may be extended, at the Lender's sole and
absolute discretion, to August 1, 2025, upon written request by the
Company at any time between December 1, 2024, and February 1, 2025
(the "Maturity Date").
-
Repayment: The full outstanding credit under the
Credit Facility, and all accrued and unpaid interest thereon, shall
be repaid on the Maturity Date.
- Interest
rate: The draws made under the Credit Facility can be by
way of a base rate loan or a term benchmark loan, on which
differing interest rate will apply. Interest will be payable on the
outstanding principal amount at a rate per annum equal to the
following, provided that each such rate shall be increased by 0.50%
per annum each 90 days following March 1, 2024:
- For a Base
Rate Loan: the greater of (i) the federal funds effective
rate plus 0.50% and (ii) the National Bank variable rate of
interest for United States dollar loans in Canada, plus (iii) 4.00%
per annum.
- For a Term
Benchmark Loan: (i) the Secured Overnight Financing Rate
("SOFR"); plus (ii) an additional 0.10% / 0.15% /
0.25% per annum for one / three / six month draws, respectively,
plus (iii) 5.00% per annum.
- Voluntary
Prepayments: Subject to the terms and conditions of the
credit agreement, the Company may prepay the outstanding loans
under the Credit Facility at any time, subject to a minimum
prepayment amount of US$1 million.
- Mandatory
Prepayments: Mandatory prepayments are required in certain
events, including in the case of asset dispositions, debt
incurrence and equity raises, for which 100% of the net cash
proceeds must be prepaid and a change of control, for which all of
the obligations under the Credit Facility must be prepaid.
-
Security: The obligations under Credit Facility
are guaranteed by the Company and secured by a first-ranking
security interest against all of the present and future assets and
property of Barkerville and the shares of Barkerville as held by
the Company.
-
Representations, Warranties and Covenants: The
credit agreement contains terms and conditions with respect to the
Credit Facility customary for a transaction of this nature,
including representations, warranties, borrower covenants,
permitted liens and indebtedness, assignment rights and events of
default. Specifically, the Company covenants to maintain its
tangible net worth (being shareholders' equity less goodwill and
intangible assets) to be at least C$500 million as calculated as at
the last day of each fiscal quarter and the Company and
Barkerville, on a consolidated basis, shall maintain liquidity
(being all unrestricted cash plus available credit under the Credit
Facility) of at least C$25 million as of the last day of each
fiscal quarter.
-
Fees: In connection with the Credit Facility and
National Bank’s services, the Company agreed to pay the following
fees to National Bank: (a) an upfront fee of 2.00% per annum on the
principal amount, which has been paid in full; (b) a ticking fee
equal to 1.00% of the committed principal amount of the Credit
Facility, calculated on annualized basis, accruing daily commencing
30 days from the December 20, 2023 until January 31, 2024, which
amount has been paid in full by the Company; and (c) duration fees
of: (i) 0.75% of the committed principal amount, payable as of May
30, 2024 if the Credit Facility remains outstanding on such date;
(ii) 1.00% of committed principal amount, payable as of August 28,
2024 if the Credit Facility remains outstanding on such date; and
(iii) 1.25% of committed amount, payable as of November 26, 2024 if
the Credit Facility remains outstanding on such date.
The summary of the key terms of the Credit
Facility above is qualified in its entirety by the full text of the
Credit Agreement, a copy of which will be available on SEDAR+
(www.sedarplus.ca) under the Company's issuer profile.
ABOUT OSISKO
DEVELOPMENT CORP.
Osisko Development Corp. is a North American
gold development company focused on past-producing mining camps
located in mining friendly jurisdictions with district scale
potential. The Company's objective is to become an intermediate
gold producer by advancing its 100%-owned Cariboo Gold Project,
located in central B.C., Canada, the Tintic Project in the historic
East Tintic mining district in Utah, U.S.A., and the San Antonio
Gold Project in Sonora, Mexico. In addition to considerable
brownfield exploration potential of these properties, that benefit
from significant historical mining data, existing infrastructure
and access to skilled labour, the Company's project pipeline is
complemented by other prospective exploration properties. The
Company's strategy is to develop attractive, long-life, socially
and environmentally sustainable mining assets, while minimizing
exposure to development risk and growing mineral resources.
For further information, visit our website at
www.osiskodev.com or contact:
Sean Roosen |
Philip Rabenok |
Chairman and CEO |
Director, Investor Relations |
Email: sroosen@osiskodev.com |
Email: prabenok@osiskodev.com |
Tel: +1 (514) 940-0685 |
Tel: +1 (437) 423-3644 |
CAUTION REGARDING FORWARD LOOKING
STATEMENTS
Certain statements contained in this news
release may be deemed "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform
Act of 1995 and "forward-looking information" within the meaning of
applicable Canadian securities legislation (together,
"forward-looking statements"). These forward-looking statements, by
their nature, require Osisko Development to make certain
assumptions and necessarily involve known and unknown risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in these forward-looking
statements. Forward-looking statements are not guarantees of
performance. Words such as "may", "will", "would", "could",
"expect", "believe", "plan", "anticipate", "intend", "estimate",
"continue", or the negative or comparable terminology, as well as
terms usually used in the future and the conditional, are intended
to identify forward-looking statements. Information contained in
forward-looking statements is based upon certain material
assumptions that were applied in drawing a conclusion or making a
forecast or projection, including the assumptions, qualifications
and limitations relating to advancement and development of the
Cariboo Gold Project, the use of proceeds of the funds drawn down
from the Credit Facility, the impact of the Credit Facility on the
Company and its financial position and allocation, the contemplated
work plan and activities at the Cariboo Gold Project and the scope
thereof and associated costs thereto, the ability of the Company to
receive permits in the timing contemplated (if at all), the ability
of the Company to build the next gold mining district at Cariboo,
the ability to reach a construction decision in respect of the
Cariboo Gold Project and the timing thereof (if at all), the impact
and performance of roadheader and ore sorter technologies and the
ability of the Company to fulfill the conditions for drawdowns
under the Credit Facility. These statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking statements, including risks
associated with fulfilling the conditions to a drawdown under the
Credit Facility; the ability of the Company to comply with
covenants under the Credit Facility; risks related to exploration
and potential development of the Cariboo Gold Project; the accuracy
of the estimated costs for the development activities at the
Cariboo Gold Project and risks relating to cost overruns; risks
relating to performance of technologies deployed at the Cariboo
Gold Project; the ability to seek additional funding for the
Cariboo Gold Project and the Tintic Project; business and economic
conditions in the mining industry generally; fluctuations in
commodity prices and currency exchange rates; uncertainties
relating to interpretation of drill results and the geology,
continuity and grade of mineral deposits; the issuance of required
permits within the timeframe contemplated; regulatory framework and
presence of laws and regulations that may impose restrictions on
mining; the need to obtain additional financing to develop
properties and uncertainty as to the availability and terms of
future financing; and other risk factors facing the Company as
disclosed in the Company's most recent annual information form,
financial statement and management's discussion and analysis as
well as other public filings on SEDAR+ (www.sedarplus.ca) and SEC's
EDGAR website (www.sec.gov) under the Company's issuer profile.
Although the Company's believes the expectations
conveyed by the forward-looking statements are reasonable based on
information available as of the date hereof, no assurances can be
given as to future results, levels of activity and achievements.
The Company disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or results or otherwise, except as required by law. Forward-looking
statements are not guarantees of performance and there can be no
assurance that these forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release. No stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein.
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