Osisko Gold Royalties Ltd (the “
Company” or
“
Osisko”) (OR: TSX & NYSE) is pleased to
announce that it has entered into a binding agreement to acquire a
1.8% gross revenue royalty (“
GRR”) on the
Dalgaranga Gold project (the “
Dalgaranga Royalty”
and the “
Project”) operated by Spartan Resources
Limited (“
Spartan”) in Western Australia. In
addition, Osisko shall also acquire a 1.35% GRR (the
“
Exploration Royalty”) on additional regional
exploration licenses in proximity to Dalgaranga. The considerations
to be paid by Osisko to the seller, Tembo Capital Mining Fund III
(“
Tembo”), for the Dalgaranga Royalty and the
Exploration Royalty, respectively, total US$44 million and US$6
million (collectively the “
Transaction”). Closing
of the Transaction is subject to approval from Australia’s Foreign
Investment Review Board which is expected in the coming weeks.
TRANSACTION HIGHLIGHTS
Exposure to a Premium Gold Development Project in a
Top-Tier Mining Jurisdiction
- Dalgaranga is one of the best gold
development and production re-start projects globally. The Project
is located in Western Australia, one of the most prolific and
well-established mining jurisdictions; and
- Dalgaranga, a recently mined open
pit operation, has been rejuvenated by very impressive new
high-grade discoveries, most notably the Never Never and Pepper
deposits, which have shifted the focus towards ore extraction via
underground mining methods.
Near-Term Cash Flow Potential
- The Dalgaranga mill is
fully-permitted and approvals for future underground mining are in
progress, providing a clear path to near-term production. The
Project is on the verge of re-starting as one of Western
Australia’s next significant high-grade gold mines with first
production from underground likely re-commencing within the next 2
years.
Significant Geological Potential
- High-grade discoveries at the
Project continue to drive ongoing underground mineral inventory
growth;
- Spartan expects to complete a
Mineral Reserve Estimate update and Feasibility Study both within
the first half of 2025; the new underground mine plan will serve as
the basis for Spartan’s Final Investment Decision
(“FID”) to re-start operations at Dalgaranga;
and,
- In addition to the evolving
exploration story at Dalgaranga, the Exploration Royalty provides
exposure to a large prospective land package covering
mineralization within trucking distance to various mills located in
the Murchison Gold District.
Jason Attew, President and CEO of Osisko
commented: “Osisko’s ability to uncover and execute accretive
near-term cash flow precious metals transactions in Tier-1 mining
jurisdictions is synonymous with our strategy. We believe that
Dalgaranga is one of the most attractive gold development and
re-start projects globally given its high-grade underground nature,
and its location in the Murchison Gold District in Western
Australia. What the Spartan team has been able to accomplish in
terms of resource discovery and definition at Dalgaranga over the
past two years is impressive. We believe that Spartan will move
forward with an FID at the Project before the end of 2025 and that
its team will continue to expand the high-grade resource at
Dalgaranga. We’re extremely pleased to be associated with one of
Australia’s most exciting gold development and re-start
opportunities, and with an asset that boasts such exciting
exploration upside potential. We look forward to our partnership
with the Spartan team going forward.”
DALGARANGA ROYALTY - ASSET HIGHLIGHTS
Fully-Permitted Processing Plant in a Tier-11 Mining
Jurisdiction
- With most material approvals
already in place, the Project is in a position to be advanced
quickly into development and construction upon FID and final
project financing; and,
- Significant infrastructure has
already been established on site, including a 2.5 million tonnes
per annum sulphide processing mill (gravity and CIL) commissioned
in May 2018 and operated until November 2022, and associated
tailings, water, power and camp facilities to support the
operations (all currently on care & maintenance). Spartan has
also commenced construction of twin exploration declines, which is
also likely to also be used for near-term production purposes.
High-Grade, Long Life, and Low-Cost Future Gold
Mine
- Spartan’s Dalgaranga licenses cover
an area of approximately 509 square kilometers
(“km2”) in the prospective
Murchison Gold District of Western Australia;
- As of June 30th, 2024 the global
Mineral Resource Estimate (“MRE”) at Dalgaranga
consisted of 8.70 million tonnes (“Mt”) grading
4.98 g/t gold (“Au”) for 1.393 million ounces
(“Moz”) in the Indicated category, in addition to
7.44Mt grading 4.56 g/t Au for 1.089 Moz in the Inferred
category;
- The Project’s “high-grade core,”
which is spread across the Never Never and Pepper deposits,
consists of 3.88Mt grading 8.74 g/t Au for 1.09 Moz in the
Indicated category, and 2.86Mt grading 8.52g/t Au for 0.78 Moz in
the Inferred category and currently contains 75% of the identified
gold to date; as such, this area remains a key target for future
MRE expansions;
-
Spartan is also focused on delineating higher grade underground
Mineral Resources for the Four Pillars and West Winds gold
prospects, situated under the historic Gilbey’s open pit;
- Based on the above MRE, Osisko
currently expects a mine life of 12+ years at Dalgaranga; and,
- Due to the high-grade nature of the
deposit, Osisko expects Dalgaranga to be in the lowest quartile on
the global gold cost curve, once back in production.
Spartan is a Mid-Sized and Experienced
Australian Underground Miner
- Spartan is a mid-sized and
well-capitalized miner (~A$90 million in cash at June 30, 2024),
led by a management team with a history of exploration success,
mine development and operational expertise;
- Spartan has access to Western
Australia’s renowned, highly-skilled and trained local mining
workforce; and,
- Spartan’s key shareholders include
Ramelius Resources Limited (18%) and Tembo (10%).
Additional Information
- Spartan has the ability to buy back
up to 20% of the Dalgaranga Royalty, as well as 20% of the
Exploration Royalty for a total of A$3.15 million until February
2027.
___________________________1 “Tier-1 Mining Jurisdiction”
defined as Australia, Canada, or USA
EXPLORATION ROYALTY HIGHLIGHTS
Large Land Packages and Highly Prospective Exploration
Licenses
- The Exploration Royalty covers the
685 km2 Yalgoo Licenses, in addition to ~1000 km2 of other
prospective licenses (including the advanced Glenburgh and Mt
Egerton exploration properties, which have the potential to be a
second production hub);
- Yalgoo is approximately 110
kilometers (“km”) Southwest via road from
Dalgaranga and hosts the Melville gold deposit which consists of an
open pit MRE which contains 3.35 Mt grading 1.49 g/t Au for 160
thousand ounces (“koz”) in the Indicated category,
and 1.88Mt grading 1.37 g/t Au for 83koz in the Inferred category,
within a granted Mining Lease;
- Spartan is progressing with
permitting of Yalgoo, which is expected to provide feed to
supplement the high-grade ore from Never Never and Pepper;
- Glenburgh is a 768 km2 land
package, approximately 300km North of Dalgaranga, and contains
13.5Mt grading 1.0 g/t Au for 431koz in the Indicated category, and
2.80Mt grading 0.90 g/t Au for 79koz in the Inferred category,
spread across 11 separate near-surface deposits, 10 of which are on
a granted Mining Lease; and,
- Mt Egerton is a 237 km2 land
package, approximately 300km North of Dalgaranga, and contains
0.23Mt grading 3.40 g/t Au for 25koz in the Indicated category,
spread across two existing deposits (Hibernian and Gaffney’s Find),
both of which are located within granted Mining Leases.
For more information, please refer to
https://spartanresources.com.au/.
Qualified Person
The scientific and technical content of this
news release has been reviewed and approved by Guy Desharnais,
Ph.D., P.Geo., Vice President, Project Evaluation at Osisko Gold
Royalties Ltd, who is a “qualified person” as defined by National
Instrument 43-101 – Standards of Disclosure for Mineral Projects
(“NI 43-101”).
About Osisko Gold Royalties Ltd.
Osisko Gold Royalties Ltd is an intermediate
precious metal royalty company which holds a North American focused
portfolio of over 185 royalties, streams and precious metal
offtakes, including 20 producing assets. Osisko’s portfolio is
anchored by its cornerstone asset, a 5% net smelter return royalty
on the Canadian Malartic Complex, one of Canada’s largest gold
mines.
Osisko’s head office is located at 1100 Avenue
des Canadiens-de-Montréal, Suite 300, Montréal, Québec,
H3B 2S2.
For further information, please contact Osisko Gold
Royalties Ltd:
Grant MoentingVice President, Capital Markets Tel: (514) 940-0670
#116Mobile : (365) 275-1954Email: gmoenting@osiskogr.com |
Heather TaylorVice President, Sustainability & Communications
Tel: (514) 940-0670 #105Email: htaylor@osiskogr.com |
CAUTIONARY
NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press
release may be deemed “forward-looking statements” within the
meaning of the United States Private Securities Litigation Reform
Act of 1995 and “forward-looking information” within the meaning of
applicable Canadian securities legislation. Forward-looking
statements are statements other than statements of historical fact,
that address, without limitation, future events, the obtaining of
the required approval to close the Transaction, that the Project,
including the Never Never and Pepper deposits will continue to be
developed and will achieve near-term production re-start within 2
years, that exploration will be successful and that high-grade
discovery will continue to drive growth of mineral inventories,
that a Mining Reserve Estimate update and Feasibility Study will be
delivered by the first half of 2025, that exploration potential on
land covered by the Exploration Royalty will materialize, that a
FID to re-start operations will be made by Spartan before the end
of 2025 and that final project financing will be achieved, that
delineation of higher grade underground Mineral Resources for the
Four Pillars and West Winds gold prospects will be achieved, that
Osisko’s expectation of a mine life of 12+ years at Dalgaranga at
the lowest quartile on the global cost curve will be accurate, that
Spartan will continue to be well capitalized and have access to
highly-skilled workforce, that Spartan may exercise its right to
buy back 20% of the Dalgaranga Royalty as well as 20% of the
Exploration Royalty, production estimates of Osisko’s assets
(including increase of production), timely developments of mining
properties over which Osisko has royalties, streams, offtakes and
investments, management’s expectations regarding Osisko’s growth,
results of operations, estimated future revenues, production costs,
carrying value of assets, ability to continue to pay dividend,
requirements for additional capital, business prospects and
opportunities future demand for and fluctuation of prices of
commodities (including outlook on gold, silver, diamonds, other
commodities) currency, markets and general market conditions. In
addition, statements and estimates (including data in tables)
relating to mineral reserves and resources and gold equivalent
ounces are forward-looking statements, as they involve implied
assessment, based on certain estimates and assumptions, and no
assurance can be given that the estimates will be realized.
Forward-looking statements are statements that are not historical
facts and are generally, but not always, identified by the words
“expects”, “plans”, “anticipates”, “believes”, “intends”,
“estimates”, “projects”, “potential”, “scheduled” and similar
expressions or variations (including negative variations), or that
events or conditions “will”, “would”, “may”, “could” or “should”
occur. Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors, most of which are beyond
the control of Osisko, and actual results may accordingly differ
materially from those in forward-looking statements. Such risk
factors include, without limitation, (i) with respect to properties
in which Osisko holds a royalty, stream or other interest; risks
related to: (a) the operators of the properties, (b) timely
development, permitting, construction, commencement of production,
ramp-up (including operating and technical challenges), (c)
differences in rate and timing of production from resource
estimates or production forecasts by operators, (d) differences in
conversion rate from resources to reserves and ability to replace
resources, (e) the unfavorable outcome of any challenges or
litigation relating title, permit or license, (f) hazards and
uncertainty associated with the business of exploring, development
and mining including, but not limited to unusual or unexpected
geological and metallurgical conditions, slope failures or
cave-ins, flooding and other natural disasters or civil unrest or
other uninsured risks, (g) that development of the Project will be
pursued diligently and in a timely manner, (ii) with respect to
other external factors: (a) fluctuations in the prices of the
commodities that drive royalties, streams, offtakes and investments
held by Osisko, (b) fluctuations in the value of the Canadian
dollar relative to the U.S. dollar, (c) regulatory changes by
national and local governments, including permitting and licensing
regimes and taxation policies, regulations and political or
economic developments in any of the countries where properties in
which Osisko holds a royalty, stream or other interest are located
or through which they are held, (d) continued availability of
capital and financing and general economic, market or business
conditions, and (e) responses of relevant governments to infectious
diseases outbreaks and the effectiveness of such response and the
potential impact of such outbreaks on Osisko’s business, operations
and financial condition, (f) that conditions will be met to allow
Osisko to exercise to exercise certain additional rights granted by
Savannah; (iii) with respect to internal factors: (a) business
opportunities that may or not become available to, or are pursued
by Osisko, (b) the integration of acquired assets or (c) the
determination of Osisko’s PFIC status. The forward-looking
statements contained in this press release are based upon
assumptions management believes to be reasonable, including,
without limitation: that Spartan will maintain development of the
Dalgaranga Project in a manner consistent with past activities;
that public disclosure concerning the Project remains accurate;
that no adverse development occurs in respect of the Project; and
the absence of any other factors that could cause actions, events
or results to differ from those anticipated, estimated or intended
and the absence of significant change in the Corporation’s ongoing
income and assets relating to determination of its PFIC status; the
absence of any other factors that could cause actions, events or
results to differ from those anticipated, estimated or intended
and, with respect to properties in which Osisko holds a royalty,
stream or other interest, (i) the ongoing operation of the
properties by the owners or operators of such properties in a
manner consistent with past practice and with public disclosure
(including forecast of production), (ii) the accuracy of public
statements and disclosures made by the owners or operators of such
underlying properties (including expectations for the development
of underlying properties that are not yet in production), (iii) no
adverse development in respect of any significant property, (iv)
that statements and estimates relating to mineral reserves and
resources by owners and operators are accurate and (v) the
implementation of an adequate plan for integration of acquired
assets.
For additional information on risks,
uncertainties and assumptions, please refer to the most recent
Annual Information Form of Osisko filed on SEDAR+ at
www.sedarplus.ca and EDGAR at www.sec.gov which also provides
additional general assumptions in connection with these statements.
Osisko cautions that the foregoing list of risk and uncertainties
is not exhaustive. Investors and others should carefully consider
the above factors as well as the uncertainties they represent and
the risk they entail. Osisko believes that the assumptions
reflected in those forward-looking statements are reasonable, but
no assurance can be given that these expectations will prove to be
accurate as actual results, and prospective events could materially
differ from those anticipated such the forward-looking statements
and such forward-looking statements included in this press release
are not guarantee of future performance and should not be unduly
relied upon. In this press release, Osisko relies on
information publicly disclosed by a third party pertaining to its
assets and, therefore, assumes no liability for such third-party
public disclosure. These statements speak only as of the
date of this press release. Osisko undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, other
than as required by applicable law.
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/dd586297-5251-4166-889c-4db2ec30320a
https://www.globenewswire.com/NewsRoom/AttachmentNg/29587cfa-087b-4f17-a6f0-b07ee364d483
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