Osisko Metals Incorporated (the “
Company” or
“
Osisko Metals”) (TSX-V: OM; OTCQX: OMZNF;
FRANKFURT: 0B51) is pleased to announce that it signed, on March 25
2022, a binding term sheet with Glencore Canada Corporation
(“
Glencore” and collectively the
“
Parties”), providing Osisko Metals with an option
(the “
Option”) to acquire a 100% interest in the
past-producing Gaspé Copper Mine (
“Gaspé Copper”)
located near Murdochville, Québec for an up-front payment of US$25
million, to be paid by Osisko Metals by way of a convertible note
issued to Glencore upon the successful closing of the transaction,
and a cash payment of US$20 million, payable upon start of
commercial production. The Company must also incur drilling costs
of C$5 million before June 30, 2022, to test oxidation levels
within the mineralization that surrounds the historical Mount
Copper open pit deposit.
Gaspé Copper Option
Overview
Assuming exercise of the Option, the acquisition
by Osisko Metals of Gaspé Copper could provide the following
benefits to the Company:
- Transformational
acquisition for the Company, providing shareholder exposure to a
significant copper development asset that is located in a safe
jurisdiction with an excellent track record of mine permitting,
especially for metals critical to global decarbonization
objectives;
- Substantial
exploration and resource development potential at Gaspé Copper,
which includes the past-producing Mount Copper open pit mine, the
higher-grade Needle Mountain and E-Zone underground mines, as well
as the undeveloped Porphyry Mountain bulk tonnage deposit;
- Drill program to
start in April 2022 for the purpose of validating an internal
resource model and the oxidation levels of mineralization at the
Mount Copper deposit, which is a critical phase of due diligence on
the project that will lead to a decision on whether to exercise the
Option before June 30 2022, and
- Supportive
infrastructure necessary for mine development is already in place,
including green hydroelectric power with an electrical substation
on the former mine site.
Osisko Metals will host a conference call at
10:00AM ET. Participants are requested to log in 15 minutes prior
to the call using the following numbers:
Participant Toll-Free Dial-In Number:1 (888)
880-5501
Participant Toll Dial-In Number:1 (438)
800-1833
A digital recording of the conference call will
be available for replay two hours after the call's completion until
March 31st 2022. To access the recording, please use the dial-in
number listed below and the following conference ID 3093894.
Toll Free Dial in Number: 1- 800- 770- 2030
Toll Dial in Number: 1- 647- 362- 9199
Robert Wares, Chairman & CEO,
commented: “Gaspé Copper was a significant copper producer
in Eastern Canada for over forty years, and we believe in the
potential to unlock value from this asset through drilling and
re-evaluation of remaining resources. If our internal model is
validated, we expect to close the transaction and release a maiden
Inferred Mineral Resource estimate on the Mount Copper deposit this
year.”
“The successful closing of this transaction will
give Osisko Metals shareholders significant copper exposure and
make Glencore a major shareholder of the Company. We welcome the
new partnership with Glencore and look forward to other
collaborative opportunities that the partnership may bring. In
addition to the ongoing development of our Pine Point zinc-lead
project, we are convinced that this combination of projects will
cement Osisko Metals’ position as one of the premier base metal
development companies in Canada. Our combined expertise will allow
us to rapidly advance both projects and create shareholder value in
safe jurisdictions with a celebrated mining history.”
Transaction Overview
- Glencore has
granted Osisko Metals an exclusive Option to acquire 100% of its
interest in the past-producing Gaspé Copper mine, subject to the
following terms:
- The Company
incurring drilling costs of C$5 million to test oxidation levels
within the mineralization that surrounds the historical Mount
Copper open pit deposit;
- Completion by
the Parties of all necessary due diligence inquiries of the other
Party, and negotiating any outstanding matters by the Parties,
and
- Provide a letter
indicating its intent to exercise the option by June 30,
2022.
- The Parties will
work toward finalizing and signing a Definitive Agreement and all
related documents no later than May 16, 2022,
which will only become effective upon exercise of the Option.
- Once Osisko
Metals has exercised the Option, if at all, and the Definitive
Agreement and all related documents are signed by the Parties, then
the Parties will have three months (on or before September
30, 2022) to close the transaction, including the payment
by Osisko Metals to Glencore of the US$25 million purchase price.
The payment will be paid by way of issuance of a convertible note
to Glencore.
- The note will be
convertible by Glencore into units of Osisko Metals at a price of
$0.40 per unit. Each unit will consist of one share and a
half-warrant. Each whole warrant will entitle Glencore to acquire
one common share of Osisko Metals at a price of $0.46 per share for
a period of 3 years.
- Glencore will
retain a 1% NSR on the Mount Copper sulphide deposit and a 3% NSR
on all other mineral products extracted from the property.
- Osisko Metals
will incur a total of C$55 million in exploration and development
expenditures, including permitting expenditures, over a period of
four years of the date of the Definitive Agreement, with a minimum
of C$20 million to be incurred within the first two years of the
date of the Definitive Agreement.
- Glencore will
retain a commercially reasonable offtake for 100% of concentrates
produced during the renewed life of mine at Gaspé Copper.
- Osisko Metals
will pay to Glencore an additional cash consideration of US$20M
upon commencement of commercial production at Gaspé Copper.
The Option and acquisition by Osisko Metals of a
100% interest in Gaspé Copper remain subject to, among other
things, the approval of (i) the TSX Venture Exchange, and (ii) the
shareholders of Osisko Metals to authorize Glencore to become, upon
and only upon conversion of the note, a "control person" of the
Company.
History of Gaspé Copper
Mines
From the initial discoveries in 1921, Gaspé
Copper (formerly subsidiary of Noranda Inc.) mined the porphyry
copper/skarn complex and produced copper concentrate continuously
from 1955 until the closure of the mine in 1999. Production started
with the Needle Mountain open pit then expanded to operating the
Mount Copper open pit that was supplemented with feed from the
extensive high-grade underground skarn mineralization (B and C Zone
deposits) as well as the massive sulfide skarn and manto deposits
of the underground E Zone.
During its mine life, a total of 150 million
tonnes grading an average of 0.87% Cu with minor gold and silver
credits was extracted (Hussey&Bernard, SME Journal, August
1998), making it one of the largest copper operations in Eastern
Canada.
Location and Infrastructure
Gaspé Copper is located next to the community of
Murdochville, in the Gaspé Peninsula of Eastern Quebec,
approximately 825km east of Montreal. All necessary support
infrastructure for the potential re-opening of Gaspé Copper is
already in place. The former mine site benefits from paved road
access with local highway 198 linking Murdochville with the coastal
community of Gaspé. Green hydroelectric power with an electrical
substation is located on-site.
Qualified Person
Mr. Jeff Hussey, P. Geo., is the Qualified
Person and President/COO for Osisko Metals Incorporated. He is
responsible for the technical data reported in this news release
and he is a Professional Geologist registered in Quebec.
About Osisko Metals
Osisko Metals Incorporated is a Canadian
exploration and development company creating value in the base
metal space. The Company controls one of Canada’s premier
past-producing zinc mining camps, the Pine Point Project, located
in the Northwest Territories for which the 2020 PEA has indicated
an after-tax NPV of $500M and an IRR of 29.6%. The Pine Point
Project PEA is based on current Mineral Resource Estimates that are
amenable to open pit and shallow underground mining and consist of
12.9Mt grading 6.29% ZnEq of Indicated Mineral Resources and 37.6Mt
grading 6.80% ZnEq of Inferred Mineral Resources. Please refer to
the technical report entitled “Preliminary Economic Assessment,
Pine Point Project, Hay River, Northwest Territories, Canada” dated
July 30 2020, which has been filed on SEDAR. The Pine Point Project
is located on the south shore of Great Slave Lake in the Northwest
Territories, near infrastructure, paved highway access, and has an
electrical substation as well as 100 kilometres of viable haulage
roads already in place.
The current Mineral Resources mentioned in this
press release conform to NI43-101 standards and were prepared by
independent qualified persons, as defined by NI43-101 guidelines.
The abovementioned Mineral Resources are not Mineral Reserves as
they do not have demonstrated economic viability. The quantity and
grade of the reported Inferred Mineral Resources are conceptual in
nature and are estimated based on limited geological evidence and
sampling. Geological evidence is sufficient to imply but not verify
geological grade and/or quality of continuity. Zinc equivalency
percentages are calculated using metal prices, forecasted metal
recoveries, concentrate grades, transport costs, smelter payable
metals and charges (see respective technical reports for
details).
For further information on this press
release, visit www.osiskometals.com
or contact:
Robert Wares, CEO, Osisko Metals, tel.
514-940-0670 ext. 111
Email: info@osiskometals.com
www.osiskometals.com
Cautionary Statement 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. The information in this news release about the Option; the
timing and ability of the Company to exercise the option (if at
all); the timing and ability of the Company and Glencore to execute
the Definitive Agreement (if at all); the results of any
exploration work completed by Osisko Metals on Gaspé Copper; the
significance (if any) of Gaspé Copper being a past producer and the
results of such past production; the ability of Osisko Metals (if
at all) to complete the required expenditures during the periods to
be specified in the Definitive Agreement; the timing and ability of
the Company to obtain regulatory approvals, including the approval
of the TSX Venture Exchange, in respect of the Option and the
acquisition of Gaspé Copper; and any other information herein that
is not a historical fact may be "forward-looking information".
Any statement that involves discussions with
respect to 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", "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 forward-looking information is based on
reasonable assumptions and estimates of management of the Company,
at the time such assumptions and estimates were made, and involves
known and unknown risks, uncertainties or other factors which may
cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking information. Such factors include, among others,
risks relating to the Option; the ability of the Parties to
negotiate and execute the Definitive Agreement; volatility in the
trading price of common shares of the Company; risks relating to
the ability of the Company to obtain required approvals; ability of
Osisko Metals to complete further exploration activities; property
interests; the results of exploration activities; risks relating to
mining activities; the global economic climate; metal prices;
dilution; environmental risks changes in the tax and regulatory
regime; community and non-governmental actions; and those risks set
out in the Company's public documents filed on SEDAR
(www.sedar.com) under Osisko Metals' issuer profile. 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, the Company cannot guarantee shareholders
and purchasers of securities of the Company 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 Company nor any other person
assumes responsibility for the accuracy and completeness of any
such forward looking information. The Company 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.
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.
Osisko Metals (TSXV:OM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Osisko Metals (TSXV:OM)
Historical Stock Chart
From Apr 2023 to Apr 2024