Osisko to buy CDPQ’s 15 pct stake in precious metals royalties

Osisko Gold Royalties has agreed to acquire Caisse de dépôt et placement du Québec's 15 percent interest in a portfolio of 28 precious metals royalties on properties located in Canada.

Osisko Gold Royalties has agreed to acquire Caisse de dépôt et placement du Québec’s 15 percent interest in a portfolio of 28 precious metals royalties on properties located in Canada. The purchase price is C$12.5 million. Based in Montreal, Osisko is an intermediate precious metal royalty company.

PRESS RELEASE

MONTRÉAL, Aug. 12, 2020 (GLOBE NEWSWIRE) — Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX & NYSE) is pleased to announce that it has entered into a definitive agreement to acquire the outstanding 15% ownership in a portfolio of Canadian precious metals royalties held by the Caisse de dépôt et placement du Québec (the “Caisse”) for cash consideration of C$12.5 million (the “Transaction”). This 15% interest represents the remaining portion of the portfolio of royalties purchased from Teck Resources Ltd. in October 2015.

The portfolio consists of 28 royalties on properties located in Canada, including royalties on Alamos Gold’s Island Gold mine and Eldorado Gold’s Lamaque mine. In 2019, the Island Gold and Lamaque royalties contributed approximately 3,000 gold equivalent ounces to Osisko’s production. The operators of both mines are set to undergo meaningful capital programs to improve and expand operations.

Sean Roosen, Chair and Chief Executive Officer of Osisko, commenting on the transaction, “This transaction increases Osisko’s ownership in a quality royalty portfolio of Canadian assets and adds immediate cash flow on premium assets such as the Island Gold and Lamaque mines. Furthermore, this transaction also shows the quality of the partnership between Osisko and the Caisse.”

Following this transaction, the Caisse remains an important investor of Osisko.

Royalty Portfolio Details
The Transaction raises Osisko’s existing royalties by approximately 18% on the following key royalties:
Three net smelter royalties (“NSR”) on the producing Island Gold mine, located in Northern Ontario and operated by Alamos Gold Inc., ranging from 1.17%-2.55% have increased to 1.38%-3.0%.
NSR royalty increase from 0.85% to 1% on the Lamaque gold mine located in Abitibi, Quebec operated by Eldorado Gold Corp.

NSR royalty increase from 0.425% to 0.5% on the Marban property held by O3 Mining Inc. and located near the Canadian Malartic mine in Québec. A corresponding increase in a commercial production payment payable to Osisko from $4.25 million to $5 million.

The portfolio also includes other precious metal royalty assets on exploration and development properties on which Osisko will see its interests rise by approximately 18%. Certain of the remaining NSR royalties are subject to buy-back clauses.

The acquisition has been funded from cash on hand.

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 135 royalties, streams and precious metal offtakes. Osisko’s portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, which is the largest gold mine in Canada. Osisko also owns the Cariboo gold project in Canada as well as a portfolio of publicly held resource companies, including a 14.7% interest in Osisko Mining Inc., 18.6% interest in Osisko Metals Incorporated and a 18.3% interest in Falco Resources Ltd.