Osisko Gold Royalties Acquires 74 Assets For C$1.125 Billion
(Kitco News) - Osisko Gold Royalties Ltd (TSX, NYSE: OR) has agreed to acquire aprecious-metals portfolio, consisting of 74 royalties, streams and preciousmetal offtakes, from Orion Mine Finance Group for C$1.125 billion, the companyreported Monday.
After the deal, Osisko would hold 131 royalties and streams,including 16 revenue-generating assets, the company said. The company'scornerstone assets remain the 5% net-smelter-return royalty on the CanadianMalartic mine, described as Canada's largest producing gold mine, and its 2% to3.5% NSR royalty on the ??l?(C)onore gold mine.
With the transaction, Osisko gains a 9.6% diamond stream on theRenard diamond mine and a 4% gold and silver stream on the Brucejack gold andsilver mine, both in Canada, in addition to a 100% silver stream on the MantosBlancos copper mine in Chile.
The purchase will consist of C$675 million in cash plus C$450million in Osisko common shares, Osisko said.
As part of the transaction, the Caisse de d?(C)p??t et placement duQu?(C)bec and the Fonds de solidarit?(C) FTQ will be subscribing for C$200 and C$75million in common shares of Osisko, respectively, as part of a concurrentprivate placement to fund a portion of the cash for the deal. Also, Osisko saidit will draw C$150 million under its revolving credit facility with theNational Bank of Canada and Bank of Montreal, and C$250 million will be fundedfrom Osisko's current cash reserves.
Osisko said the transaction, which increases shares outstandingby less than 50%, doubles its near-term cash flow and more than triplesOsisko's cash-flowing assets from five to 16. This also provides Osisko with a growthpipeline that has expected production of over 100,000 gold-equivalent ounces in2018, rising to over 140,000 by 2023, and pro forma cash flow growth of 10% perannum from 2017 to 2023, Osisko said.
Ninety percent of the cash flow would be from precious-metalsassets, with 80% from North America.
Issuance of theOrion shares and the private-placement shares is subject to approval by asimple majority of Osisko's shareholders. The company said a special meeting ofshareholders will be held in July, with closing of the transaction expectedaround July 31, subject to customary closing conditions. However, the transaction'seconomic effective date will be June 1 of this year, Osisko said.
"Since our creation three years ago, we have been workingtowards a transformational transaction for Osisko," said Sean Roosen, chair andchief executive officer, commenting that the deal with Orion "adds widediversity to our portfolio."
By Allen SykoraFor Kitco News
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asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities,securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |