Osisko Mining Inc. (OSK:TSX. "
Osisko" or the
"
Corporation") is pleased to announce it has
concluded a 50/50 joint venture agreement with a subsidiary of Gold
Fields Limited ("
Gold Fields") for the joint
ownership and development of Osisko's Windfall gold project,
located in the Abitibi greenstone belt, Urban Township, Eeyou
Istchee James Bay, Québec (the "
Transaction").
Transaction Highlights
- Gold Fields
initial cash payment to Osisko of C$300 million on signing.
- Gold Fields
additional (“Deferred”) cash payment to Osisko of C$300 million on
issuance of the applicable permits authorizing the construction,
operation and mining of the Windfall Project.
- Gold Fields to
sole fund expenditures for regional exploration up to a maximum of
C$75 million, after which regional exploration programs would be
proportionately funded by each of Osisko and Gold Fields.
- In addition to
the initial cash payment and the Deferred cash payment, Gold Fields
to make two additional separate C$17 million cash payments to
Osisko (C$34 million in total, the first on July 31, 2023 and the
second on December 31, 2023). These represent reimbursement of
items already incurred by Osisko as part of pre-construction
spend.
- Gold Fields and
Osisko share all pre-construction costs (provisional budget
estimated at C$250 million) and construction costs (feasibility
capital expenditure estimated at C$789 million) on a 50/50 basis
going forward.
- Governance
arrangements with equal representation in the Partnership from
Osisko and Gold Fields, to leverage each party's skillsets.
Osisko's Chairman and Chief Executive Officer,
John Burzynski, stated: “We are very pleased to partner with Gold
Fields on the Windfall project and our exploration property
portfolio. Today is the start of what we believe will prove to be a
long and fruitful partnership with Gold Fields at Windfall, and in
what we both believe is a significant emerging gold district in
Québec. This partnership further strengthens our strong balance
sheet, allows us to significantly de-risk Windfall and brings us a
very important step closer to realizing our objective of becoming a
leading Canadian gold producer. With the proceeds from this
Transaction, Osisko is fully-funded for our share of development
capital to bring Windfall into production. Osisko shareholders
retain considerable upside in the project while also benefiting
from the mine building, operating and technical expertise of Gold
Fields. Assuming the project is ultimately permitted and approved
by the partners consistent with the Windfall Feasibility Study,
Gold Fields’ acquisition cost, exploration commitment, and
contribution to pre-construction and project capital would
ultimately represent an investment of C$1.2 billion to acquire its
interest, bring Windfall into production and further unlock the
regional exploration upside. This Transaction is highly compelling
on many fronts and represents the best path forward to maximize
value for all stakeholders.”
Mr. Burzynski continued: “Osisko Mining would
like to acknowledge and thank Sean Roosen in particular and the
directors of Osisko Gold Royalties Ltd. (“OGR”) for their
forward-looking vision in supporting the 2015 re-creation of Osisko
Mining - one of the key first investment decisions in OGR’s very
innovative and successful “accelerator model” concept to create new
high-value negative-cost royalties tied to equity investment in new
exploration companies. OGR holds a 2% - 3% NSR royalty on the
Windfall area claims and 13% of the undiluted equity in the
Corporation.”
Transaction Details
The Transaction closed on May 2, 2023, with Gold
Fields acquiring a 50% partnership interest in the "Windfall Mining
Group", a partnership formed under the laws of the Province of
Ontario (the "Partnership"), which will develop
the Windfall project and the surrounding Urban Barry and Quévillon
exploration properties (collectively, the
"Property"). The Transaction was implemented in
accordance with, among other things, a framework agreement dated
May 2, 2023 (the "Framework Agreement") among
Osisko, Gold Fields, Gold Fields Holdings Company Limited, Windfall
Mining Group and 1000516419 Ontario Inc., the manager of the
Partnership (the "Manager"). Pursuant to the terms
of the Framework Agreement, Gold Fields acquired 50% interest in
the Partnership for an aggregate consideration of C$600 million in
cash to Osisko. The Partnership Agreement also requires Gold Fields
to sole fund up to C$75 million in contributions to the Partnership
for regional exploration. Prior to the acquisition of the 50%
Partnership interest by Gold Fields, Osisko had contributed to the
Partnership the Property together with any claims, permits, leases,
all other real property, personal property, contractual rights and
other assets currently held or acquired for the benefit of the
Property.
The Framework Agreement contains customary
representations and warranties, covenants and indemnification
provisions for a transaction of this nature. The obligations of
Gold Fields are guaranteed by Gold Fields Holdings Company Ltd, a
significant intermediate holding company with material indirect
interests in a number of Gold Fields operations.
About Windfall Mining Group
The business and affairs of the Partnership are
managed by the Manager, which has the exclusive right to act on
behalf of the Partnership. Each of Osisko and Gold Fields holds 50%
of the common shares in the Manager, as well as a 50% partnership
interest in the Partnership (apart from a nominal interest in the
Partnership held by the Manager).
The relationship among the parties is governed
by a second amended and restated partnership agreement (the
"Partnership Agreement") and a shareholders'
agreement (together with the Partnership Agreement, the
"Governing Documents"). The Governing Documents
contain customary transfer rights restrictions, governance and
decision-making mechanisms which are typical in a transaction of
this nature. The Partnership Agreement contains provisions relating
to programs and budgets in respect of the Property, funding
obligations and remedies for breaches of funding obligations, cost
overruns as well as a mutual standstill.
AdvisorsMaxit Capital
LP acted as financial advisor to Osisko and
Bennett Jones LLP acted as Osisko's legal
counsel.
Conference
CallOsisko and Gold Fields will host a joint conference
call on Tuesday, May 2, 2023 at 9:00 am ETPlease follow the link
below to register for the call and receive your dial-in
number:https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=3419948&linkSecurityString=8a7caf648
About the Windfall Gold
DepositThe Windfall gold deposit is located between
Val-d'Or and Chibougamau in the Abitibi region of Québec, Canada.
The mineral resource estimate on Windfall (with an effective date
of June 7, 2022 ) (the "Windfall Resource Estimate") and the
mineral reserve estimate on Windfall (with an effective date of
November 25, 2022) (the "Windfall Reserve Estimate") are described
in the technical report entitled "Feasibility Study for the
Windfall Project, Eeyou Istchee James Bay, Québec, Canada" and
dated January 10, 2023 (with an effective date of November 25,
2022) (the "FS Technical Report"). The Windfall Resource Estimate,
assuming a cut-off grade of 3.50 g/t Au, comprises 811,000 tonnes
at 11.4 g/t Au (297,000 ounces) in the measured mineral resource
category, 10,250,000 tonnes at 11.4 g/t Au (3,754,000 ounces) in
the indicated mineral resource category and 12,287,000 tonnes at
8.4 g/t Au (3,337,000 ounces) in the inferred mineral resource
category. The Windfall Reserve Estimate, assuming 3.5 g/t
operating, 2.5 g/t incremental, and 1.7 g/t development cut-off
grade, comprises 12,183,000 tonnes at 8.06 g/t Au (3,159,000
ounces) in the probable mineral reserves category. The key
assumptions, parameters, limitations and methods used in the
feasibility study for Windfall, including the related Windfall
Resource Estimate and Windfall Reserve Estimate, are described in
the FS Technical Report, which was prepared in accordance with
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects ("NI 43-101"). The FS Technical Report is available on
SEDAR (www.sedar.com) under Osisko's issuer profile. The Windfall
gold deposit is currently one of the highest-grade resource-stage
gold projects in Canada and has world-class scale. Mineralization
occurs in three principal areas: Lynx, Main, and Underdog.
Mineralization is generally comprised of sub-vertical lenses
following intrusive porphyry contacts plunging to the northeast.
The resources are defined from surface to a depth of 1,600 metres,
including the Triple 8 (TP8) zone. The reserves are defined from
surface to a depth of 1,100 metres. The deposit remains open along
strike and at depth. Mineralization has been identified at surface
in some areas and as deep as 2,625 metres in others with
significant potential to extend mineralization down-plunge and at
depth.
About Osisko Mining Inc.Osisko
is a mineral exploration company focused on the acquisition,
exploration, and development of precious metal resource properties
in Canada. Subsequent to this announcement, Osisko holds a 50%
interest in the high-grade Windfall gold deposit located between
Val-d'Or and Chibougamau in Québec and a 50% interest in a large
area of claims in the surrounding Urban Barry area and nearby
Quévillon area (over 2,300 square kilometres).
About Gold FieldsGold Fields is
a globally diversified gold producer with nine operating mines in
Australia, South Africa, Ghana (including the Asanko JV) and Peru
and one construction project in Chile. It has total attributable
annual gold-equivalent production of 2.40Moz, proved and probable
gold Mineral Reserves of 46.1Moz, measured and indicated gold
Mineral Resources of 31.1Moz (excluding Mineral Reserves) and
inferred Gold Mineral Resources of 11.2Moz (excluding Mineral
Reserves). Gold Fields shares are listed on the Johannesburg Stock
Exchange (JSE) and its American depositary shares trade on the New
York Exchange (NYSE).
Qualified Person
The scientific and technical content in this
news release has been reviewed and approved by Mr. Mathieu Savard,
P.Geo (OGQ #510), President of Osisko, who is a "qualified person"
(within the meaning of NI 43-101).
Cautionary Note Regarding Forward-Looking
Information
This news release contains "forward-looking
information" within the meaning of the applicable Canadian
securities legislation that is based on expectations, estimates,
projections and interpretations as at the date of this news
release. Any statement that involves predictions, expectations,
interpretations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often, but not always,
using phrases such as "expects", or "does not expect", "is
expected", "interpreted", "management's view", "anticipates" or
"does not anticipate", "plans", "budget", "scheduled", "forecasts",
"estimates", "potential", "feasibility", "believes" or "intends" or
variations of such words and phrases or stating that certain
actions, events or results "may" or "could", "would", "might" or
"will" be taken to occur or be achieved) are not statements of
historical fact and may be forward-looking information and are
intended to identify forward-looking information.
This news release contains the forward-looking
information pertaining to, among other things: the timing and
ability of the Partnership to obtain all other authorizations
needed to begin the construction and operations at Windfall; the
timing (if at all) of the payment of the Deferred Payment Amount;
the timing and ability for the Property to reach a construction
decision; the ability of Osisko to realize on the benefit of the
Transaction; the impact on Osisko of the disposition of ownership
interest and control in the Property and Contributed Assets; the
estimated costs required to reach a construction decision in
respect of the Property; receipt of a positive recommendation for
the Windfall environmental impact assessment; the ability and
timing for the parties to fund cash calls to advance the
development of the Property and pursue planned exploration and
development; the Windfall gold deposit being one of the
highest-grade resource-stage gold projects in Canada and having
world-class scale; the key assumptions, parameters, limitations and
methods used in the FS Technical Report, including the related
Windfall Resource Estimate and Windfall Reserve Estimate; the
prospects, if any, of the Windfall gold deposit; the ability to
realize upon any mineralization in a manner that is economic; the
amount and type of drilling to be completed and the timing to
complete such drilling; the potential to extend mineralization
down-plunge and at depth; the ability of exploration work
(including drilling) to accurately predict mineralization;
upgrading an inferred mineral resource to a measured mineral
resource or indicated mineral resource category; future drilling
and advancement at the Property.
Forward-looking information involves risks,
uncertainties and other factors that could cause actual events,
results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward-looking
information. Factors that could cause actual results to differ
materially from such forward-looking information include, among
others, risks relating to the ability of exploration activities
(including drill results) to accurately predict mineralization;
errors in management's geological modelling; the ability of the
Partnership to complete further exploration activities, including
(infill) drilling, or further development of the Property; the
ability to continue current operations and exploration; property
and royalty interests in the Windfall gold deposit; the ability and
timing to obtain required approvals for the advancement of the
Property; regulatory framework; the results of exploration
activities; risks relating to exploration, development and mining
activities; reliance on third-parties for infrastructure, including
power lines; the global economic climate; capital market
conditions; Osisko's, Gold Field's and the Partnership's ability to
access capital and obtain project financing; metal prices;
dilution; environmental risks; and community and non-governmental
actions. Although the forward-looking information contained in this
news release is based upon what management believes, or believed at
the time, to be reasonable assumptions, Osisko cannot assure
shareholders and prospective purchasers of securities of the
Corporation that actual results will be consistent with such
forward-looking information, as there may be other factors that
cause results not to be as anticipated, estimated or intended, and
neither Osisko nor any other person assumes responsibility for the
accuracy and completeness of any such forward-looking information.
Osisko does not undertake, and assumes no obligation, to update or
revise any such forward-looking statements or forward-looking
information contained herein to reflect new events or
circumstances, except as may be required by law.
CONTACT INFORMATION:John
BurzynskiChairman and Chief Executive OfficerTelephone (416)
363-8653
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