Gaspé Copper Option Overview
Assuming exercise of the Option, the acquisition by
- 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-gradeNeedle Mountain and E-Zone underground mines, as well as the undevelopedPorphyry 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 theMount 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 beforeJune 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.
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“The successful closing of this transaction will give
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 historicalMount 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 Company incurring drilling costs of
- 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 beforeSeptember 30, 2022 ) to close the transaction, including the payment byOsisko Metals to Glencore of theUS$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 ofOsisko 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 ofC$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 ofC$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 ofUS$20M upon commencement of commercial production at Gaspé Copper.
The Option and acquisition by
History of Gaspé Copper Mines
From the initial discoveries in 1921, Gaspé Copper (formerly subsidiary of
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,
Location and Infrastructure
Gaspé Copper is located next to the community of
Qualified Person
Mr.
About
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:
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
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
Neither the
Source:
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