Osisko Development Corp. ("
Osisko Development" or
the "
Company") (ODV: TSX-V) is pleased to report
its financial and operating results for the three months ended
December 31, 2021.
Fourth Quarter and Full Year 2021
Highlights
- The Company began test mining and
gold production from the Bonanza Ledge phase 2 mine and the
San Antonio Stockpile heap leach mine.
- The Company recently entered into
an agreement to acquire the high grade Trixie gold mine and
prolific East Tintic mining district in Utah. The Trixie project is
anticipated to add meaningful low-cost production to Osisko
Development with expected low capital intensity.
- The Company advanced permitting on
both its Cariboo and San Antonio Projects and expect to have
required permits in hand to begin construction in late 2022 and
early 2023.
- The Company invested significant
capital towards advancing the Cariboo and San Antonio gold projects
by purchasing long lead items such as roadheaders, milling
equipment, ore sorter and upgrading and or building new lodging,
energy and access infrastructure.
- The cash position for the Company
as of December 31, 2021 was $33.4 million, and the market value of
equity investments approximately CAD$87.4 million.
- During the quarter the Company
continued to operate in a safe and environmentally friendly manner
while continuing to develop and uphold relationships with the
community and Indigenous Nations. The Cariboo Gold Project is
advancing through Environmental Assessment Process for a
4,750 tonne per day underground operation with a feasibility
study targeted for completion in the first half of 2022. The
receipt of the Environmental Assessment Certificate remains on
schedule for the fall of 2022. The Cariboo Gold Project is the
first project in the Province of British Columbia going through the
new Environmental Assessment Process and has strong support from
the Province and the Cariboo Region to develop and diversify the
economy of the region affected by the pandemic.
- Other important highlights in
permitting are:
- The Company successfully obtained
approval for amendments to Mines Act Permits M-238 and M-198
allowing the expansion of the existing Bonanza Ledge II
underground mine during the fourth quarter.
- The Company received the Notice of
Work permit to commence underground development and collect a
10,000 tonnes bulk sample for its Cariboo Gold Project to further
increase confidence in the Project .The aim of the bulk sample is
to further test the ore sorting technology and roadheader
development.
- The roadheader tested at the
Bonanza Ledge site, which reached performance above expectation,
was purchased and Osisko Development placed an order to secure two
other roadheaders for the Cariboo Project. An ore sorter was
purchased and will be commissioned to use in this bulk sample test.
The portal construction for the bulk sample is completed and
development has begun.
- The Company purchased and installed
two water treatment plants (“WTP”) for the Bonanza Ledge site and
the QR Mill for environmental requirements. The WTP at Bonanza
Ledge was commissioned since June and the QR Mill will be
commissioned in March 2022. Both installations will be re-used for
the future Cariboo Gold Project and show the commitment of the
Company toward improving environmental performance.
- On the exploration and geology
fronts, the Company drilled 152,500 meters in 2021 principally to
support the feasibility study on the Cariboo Gold Project. The
drill program was successful in defining robustness of geologic
model, continuity of the high grade vein corridors as well as
adding potential at depth and along strike. The drilling will be
included in a mineral resource update to support the feasibility
study in Q2 2022. Highlights of the drill campaign included 35.25
g/t Au over 11.0 meters, 7.35 g/t Au over 23.98 meters, and 281 g/t
Au over 0.50 meter, 1,965 g/t Au over 0.50 meter at the Shaft Zone,
26.58 g/t Au over 5.05 meters and 7.87 g/t Au over 10.25 meters at
the Valley Zone. In Mexico, the 27,900 meters were drilled in 2021
on the San Antonio Gold Project to support a maiden open pit
mineral resource estimate to be completed in Q1 2022.
Complete drill results are yet to be released with the highlights
to date of 3.93 g/t Au over 13.5 meters, 2.14 g/t Au over 21.65
meters, 1.52 g/t Au over 29.2 meters 1.02 g/t Au over 39.90 meters,
1.30 g/t Au over 22.0 meters in oxide and sulphide zones at
Sapuchi, California and Golfo de Oro targets. For more information,
refer to our press releases filed on www.sedar.com.
- The Company incurred a net loss of
$56.5 million during the quarter. The net loss is mostly due to the
recognition of a non-cash impairment in the amount of $47.8
million, of which $42.0 million is related to an impairment on
certain exploration and evaluation properties, including the James
Bay properties and the Coulon zinc project in Canada. The remaining
$5.8 million non-cash impairment is related to the revaluation of
the stockpile inventory held at Sapuchi Minera.
- The Company divested of certain
investments from its portfolio generating gross proceeds of
$20.6 million in 2022.
“We are pleased by the progress
achieved to date at both Cariboo and San Antonio. The ongoing work
at Cariboo has advanced our Environmental Assessment and
Feasibility Study bringing us closer to our major milestones. The
exploration model and metallurgical test work at Cariboo have
continued to build value as we finish this work and better
understand this project and the upside. It is a rare exceptional
opportunity in Canada. The San Antonio project has more than
fulfilled our original expectations and we continue to see near
surface exploration results and upside. We have achieved first
production and look forward to building on that success.
The Tintic opportunity is one of the most
exceptional high grade opportunities we have seen and we look
forward to closing this acquisition and doing what Osisko does best
and unlock the geological potential of this historic camp. I want
to thank all the Shareholders, Stakeholders and employees for their
support throughout a very challenging period for everyone. It is
truly appreciated by all of us.” Commented Sean Roosen, Chair and
Chief Executive Officer of Osisko Development.
Financing and Future
Projects
- On January 25th, 2022, the
Company announced that it had entered into binding agreements to
acquire 100% ownership of the ultra high grade, producing and
permitted Trixie Mine, as well as a land package covering over
17,000 acres and hosting 23 past-producing mines in Central Utah’s
historic Tintic Mining District (the “Tintic
Acquisition”). Closing of the Tintic Transaction is
expected to occur in Q2 2022.
- Concurrently with, or shortly
following the Tintic Acquisition, the Company entered into the
financing arrangements set out below:
- A non-binding metals stream term
sheet with Osisko Gold Royalties which, on closing of the Tintic
Acquisition, would provide the Company with upfront cash proceeds
of at least US$20 million and up to US$40 million;
- A non-brokered private placement
for aggregate gross proceeds to the Company of approximately
US$110.3 million, which will be held in escrow until certain
conditions are met, including the Company listing its common shares
on the New York Stock Exchange; and
- A bought-deal private placement
with a syndicate of underwriters for aggregate proceeds of
CAD$90 million, which will be held in escrow subject to
closing of the Tintic Acquisition.
Consolidated Financial
StatementsOsisko Development’s audited annual consolidated
financial statements and management's discussion and analysis for
the three months and full year ended December 31, 2021 are
available on the Company’s website at www.osiskodev.com, and on
SEDAR under the Company’s profile at www.sedar.com.
Conference CallOsisko Development will host a
conference call on February 25, 2022 at 9:00 A.M., Eastern
Time to discuss the quarterly and year-end results.
Date: February 25, 2022 at 9:00 A.M., ESTDial-in Numbers:
- North American Toll-Free: 1 (888) 880-5501
- Local and International: 1 (438) 800-1833
- Access Code: 8787742
The replay will also be available on the Company’s website
athttps://osiskodev.com/investors/#events
Qualified Persons
Per National Instrument 43-101 Standards of
Disclosure for Mineral Projects, Maggie Layman, P.Geo. Vice
President Exploration of Osisko Development Corp., is a Qualified
Person and has prepared, validated, and approved the technical and
scientific content of this news release.
For further details on the Tintic project please
see the press release of Osisko Development Corp. dated January 25,
2022.
For further details about the Cariboo Gold
project described above, please see the following technical report,
available on the website of the Company and www.sedar.com, titled
"NI 43-101 Technical Report and Mineral Resource Estimate for the
Cariboo Gold Project", British Columbia, Canada" dated October 5,
2020, by Christine Beausoleil, P.Geo. and Carl Pelletier, P.Geo. of
InnovExplo Inc., Val-d’Or (Québec).
About Osisko Development Corp.
Osisko Development Corp. is uniquely positioned
as a premier gold development company in North America to advance
the Cariboo Gold Project and other Canadian and Mexican properties,
with the objective of becoming the next mid-tier gold producer. The
Cariboo Gold Project, located in central British Columbia, is
Osisko Development's flagship asset with measured and indicated
resources of 21.44 Mt at 4.6 Au g/t for a total of 3.2 million
ounces of gold and inferred resource of 21.69 Mt at 3.9 Au g/t
for a total of 2.7 million ounces of gold (see NI 43-101 Technical
Report and mineral resource estimate effective October 5th,
2020). The considerable exploration potential at depth and along
strike distinguishes the Cariboo Gold Project relative to other
development assets as does the historically low, all-in discovery
costs of US $19 per ounce. The Cariboo Gold Project is
advancing through permitting as a 4,750 tonnes per day underground
operation with a feasibility study on track for completion in the
first half of 2022. Osisko Development's project pipeline is
complemented by potential near-term production targeted from the
San Antonio gold project, located in Sonora Mexico and early
exploration stage properties including the Coulon Project and James
Bay Properties located in Québec as well as the Guerrero Properties
located in Mexico. Osisko Development began trading on the TSX
Venture Exchange under the symbol “ODV” on December 2, 2020
and the Company’s 14,789,373 outstanding share purchase warrants
were listed on the TSX Venture Exchange under the symbol “ODV.WT”
on October 25, 2021.
For further
information, please contact Osisko Development Corp.: |
|
Jean Francois LemondeVP Investor
Relationsjflemonde@osiskodev.comTel: 514-299-4926 |
|
Forward Looking Statements
Certain statements contained in this press
release may be deemed “forward‐looking statements” within the
meaning of applicable Canadian and U.S. securities laws. 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
management’s perceptions of historical trends, current conditions
and expected future developments, results of further exploration
work to define and expand mineral resources, that all conditions
for the acquisition of 100% of Tintic Consolidated Metals LLC will
be met in a timely manner and that expected the benefits of such
acquisition will be achieved, that all conditions to the closing of
the non-brokered private placement and the bought-deal private
placement will be met in a timely manner, the results of permitting
processes as well as the timely delivery of such permits, including
the Environmental Assessment Certificate, the result of the buck
sample, the timely commissioning of the WTP at the QR mill, the
exploration potential at the San Antonio project, the ability to
execute projects pursuant to permits, the ability to obtain
equipment on time and budget on terms acceptable to Osisko
Development, the ability to continue safe operations and
relationships with communities in which we operate, the ability to
continue test mining in Utah following acquisition and the results
of such mining, as well as other considerations that are believed
to be appropriate in the circumstances. Osisko Development
considers its assumptions to be reasonable based on information
currently available, but cautions the reader that their assumptions
regarding future events, many of which are beyond the control of
Osisko Development, may ultimately prove to be incorrect since they
are subject to risks and uncertainties that affect Osisko
Development and its business. Such risks and uncertainties include,
among others, the ability to meet all conditions for the
acquisition of 100% of Tintic Consolidated Metals LLC the closing
of the non-brokered private placement and the bought-deal private
placement, risks relating to the ability of exploration activities
(including drill results) to accurately predict mineralization;
errors in management’s geological modelling; the ability of to
complete further exploration activities, including drilling and
development of the Cariboo and San Antonio properties; and the
royalty and stream interests affecting respectively the Cariboo
project and the San Antonio gold project; the ability of the
Corporation to obtain required approvals; the results of
exploration activities; risks relating to exploration, development
and mining activities; the global economic climate; metal prices;
dilution; environmental risks; and community and non-governmental
actions and the responses of relevant governments to the COVID-19
outbreak and the effectiveness of such responses.
For additional information with respect to these
and other factors and assumptions underlying the forward‐ looking
statements made in this news release concerning Osisko Development,
see the Filing Statement available electronically on SEDAR
(www.sedar.com) under Osisko Development's issuer profile. The
forward‐looking statements set forth herein concerning Osisko
Development reflect management's expectations as at the date of
this news release and are subject to change after such date. Osisko
Development disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, other than as required by
law.
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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