MONTRÉAL, July 15, 2024 (GLOBE NEWSWIRE) -- Osisko Gold Royalties Ltd (the "Corporation" or "Osisko") (OR: TSX & NYSE) is pleased to announce that its wholly-owned subsidiary, Osisko Bermuda Limited ("OBL"), in partnership with Franco-Nevada (Barbados) Corporation ("FNB"), a wholly-owned subsidiary of Franco-Nevada Corporation ("Franco-Nevada") (FNV: TSX & NYSE), has entered into a definitive Purchase and Sale Agreement (Gold) (the "Gold Stream") with SolGold plc and certain of its wholly-owned subsidiaries (collectively, "SolGold") (SOLG: LSE & TSX), with reference to gold production from SolGold's 100%-owned Cascabel copper-gold project located in Ecuador (the "Project" or "Cascabel"). Osisko also holds a 0.6% NSR royalty on Cascabel which it purchased from SolGold in 2022.
Pursuant to the terms of the Gold Stream, OBL and FNB (collectively, the "Stream Purchasers") will make initial deposits totaling US$100 million to SolGold in three equal tranches to fund the Project's pre-construction costs (the "Pre-Construction Deposit"). The first tranche of the Pre-Construction Deposit will be funded at closing, with the two subsequent tranches subject to the achievement of key development milestones.
Thereafter, the Stream Purchasers will make additional deposits totaling US$650 million to SolGold to fund construction costs once the Project is fully financed and further derisked (the "Construction Deposit", and together with the Pre-Construction Deposit, the "Deposit"). OBL will provide 30% of the Deposit in exchange for a 30% interest in the Gold Stream and FNB will provide 70% of the Deposit in exchange for a 70% interest in the Gold Stream.
Jason Attew, President & CEO of Osisko commented: "Cascabel is a world-class copper-gold project that has the potential to become a multi-generational mine. SolGold's focus on sustainable development has generated very strong support from the Government of Ecuador and the local communities near the Project. This new stream investment, which complements Osisko's existing royalty on Cascabel, further enhances Osisko's peer leading growth profile at an attractive rate of return. We are excited to be partnering with Franco-Nevada to continue to support SolGold and the development of this exceptional asset."
INVESTMENT HIGHLIGHTS
- Increasing Exposure to a Long Life, Tier-1i Copper-Gold Asset
- Cascabel represents one of the most significant copper-gold discoveries in recent history and one of the few long life, high production projects that is not currently owned by a major mining company.
- The 2024 pre-feasibility study for the Project's Alpala deposit (the "2024 PFS") estimates total production over an initial 28-year mine life of 2.9 million tonnes of copper, 6.9 million ounces of gold and 18.4 million ounces of silver at an all-in sustaining cost of US$0.69 per pound of copper, placing it in the 1st quartile on the global copper mine cost curve.
- The Exploitation Contract signed with the Government of Ecuador on June 5, 2024 outlines the fiscal and legal frameworks for the development of Cascabel.
- SolGold has demonstrated a strong commitment to responsible and sustainable operating practices, with the aim of establishing one of the lowest carbon footprint copper mines globally.
- Potential to Materially Extend Mine Life through Near-Mine Exploration
- The initial 28-year mine life outlined in the 2024 PFS only considers the exploitation of 18% of the Measured and Indicated Mineral Resources from the Alpala deposit.
- There are numerous regional exploration targets that have similar geophysical and geochemical characteristics to Cascabel's known mineralized porphyry clusters.
- The Tandayama-America deposit, located just 3km north of the Alpala deposit, has the potential to be exploited by open-pit mining methods and could provide additional mill feed and project development flexibility.
- Robust Gold Stream with Phased Investment as Project Advances
- Based on the 2024 PFS, annual deliveries to OBL over the initial 28-year mine life are expected to average approximately 12,000 gold equivalent ounces ("GEOs"), including an average of approximately 23,000 GEOs per annum for the first 10 years.
- OBL's investment is staged and based on the achievement of key development milestones, with US$30 million available pre-construction and the balance available for construction once the Project is further derisked and fully financed.
- The Gold Stream includes adjustment mechanisms to preserve the economics to the Stream Purchasers in the event of changes to the scale of the Project or timeline of development.
STREAM DETAILS (ATTRIBUTABLE TO OBL)
- Pre-Construction Deposit: OBL will make initial cash deposits totaling US$30 million to SolGold to fund pre-construction costs of the Project, including:
- US$10 million on closing; and
- two additional staged deposits of US$10 million each, subject to satisfaction of key development milestones and other conditions precedent.
- Construction Deposit: OBL will provide additional deposits to SolGold totaling US$195 million to fund construction costs of the Project, subject to customary conditions including execution by SolGold of an Investment Protection Agreement with the Government of Ecuador related to the construction and development of the Project, receipt of all material permits, a board-approved construction decision and the balance of the construction financing being available.
- Streamed Metal: OBL will purchase refined gold equal to 6% of the contained gold produced from the Project until 225,000 ounces of gold have been delivered to it, and 3.6% thereafter for the remaining life of the mine. Over the initial 28-year mine life, SolGold estimates contained gold production from the Project to average approximately 253,000 ounces per annum, including an average of approximately 392,000 ounces per annum for the first 10 years.
- Production Payments: OBL will make ongoing cash payments for refined gold delivered equal to 20% of the spot price of ...