Glencore Canada has right of first refusal over the silver stream transaction and has 60 days to purchase the agreement on the same terms, Falco said.
Under the agreement, Osisko (TSX: OR) will buy 90% of Horne 5's payable silver, and up to 100% if it elects to make the optional, fifth deposit.
It will make staged payments totalling up to $180 million, and will also purchase a secured, $7 million (US$5.3 million) debenture from Falco, subject to disinterested shareholder approval.
Osisko currently owns 13.2% of Falco.
"We are pleased to announce this financing with Osisko," Falco president and CEO Luc Lessard said.
"The partnership with Osisko and its cornerstone investment further demonstrates its commitment to supporting the next significant mine build in Quebec, a leading mining jurisdiction."
Horne 5 is expected to produce 219,000oz of annual payable gold for 15 years, along with a LOM 1 billion pounds of zinc, 229 million pounds of copper and 26.83Moz of silver at an average diluted 2.37g/t gold-equivalent grade, according to a feasibility study released in October.
It put the pre-production capex close to US$802 million.
The study outlined an after-tax NPV (5% discount) of $602 million and an IRR of 15.3%, with all-in sustaining costs, net of by-product credits, in the top quartile at $399/oz over the life of mine.
Osisko chairman and CEO Sean Roosen said the silver stream took the company's Accelerator model from concept to reality and it looked forward to supporting "another great mine build in Quebec".
"Today's announcement marks the beginning of a new chapter in the history of Osisko," he said.
In Falco's announcement, the company noted it was "yet to receive formal approvals and licenses from a third party" that would allow it to conduct business in relation to Horne 5's development and construction, but said it had been in constant discussions.
Falco owns mineral rights 200m below the surface of the mining concession where Horne 5 is located, and surface rights surrounding the historic Quemont No 2 shaft which it hopes to refurbish.
Falco Resources closed up C1c yesterday to 58c. Its shares have shed about a third of their value so far this year. It is capitalised at $109.6 million.
Osisko closed 2c higher at $12.60, down just over 13% year-to-date, and is valued at $1.97 billion.