Roscan Gold (TSXV: ROS; US-OTC: RCGCF) has entered into a royalty financing agreement with Osisko Gold Royalties (TSX: OR; NYSE: OR) to raise gross proceeds of $10 million. The royalty is related to the company's Kandiol?(C) project in Mali, West Africa.
Osisko will initially acquire a 1% net smelter return royalty for upfront consideration of $5 million, and retains the option to purchase a second 1% NSR (for a total NSR royalty of 2%) at any time for an additional $5 million.
Roscan has the right to compel Osisko to acquire the additional 1% NSR royalty in the event it receives a long-term exploitation licence on Kandiol?(C) from the Malian government.
Osisko has also been granted a right of first refusal on future royalties and streams related to the property, including Roscan's outstanding buyback rights, should it decide to sell those rights, as well as royalties on any future complementary properties acquired by the company.
The 401.8-sq.-km Kandiol?(C) project is situated 25 km east of B2Gold's (TSX: BTO; NYSE: BTG) Fekola mine and has seven operating mines located within an 80 km radius. It currently hosts two high-grade gold discoveries from surface at Mankouke South and Central Mankouke along a 7-km trend line.
"We are very happy to welcome Osisko Gold Royalties, a leading royalty and streaming provider, as a strategic partner while we continue to unlock significant value on the very prospective Kandiol?(C) project, which is strategically located between two of the largest producing gold mines in Africa," Nana Sangmuah, president and CEO of Roscan, commented.
"This financial endorsement will help the company accelerate our objectives of further resource growth and advancing project development," Sangmuah added.
Shares of Roscan Gold surged 11% on the TSX Venture Exchange by 12:25 p.m. ET. The Canadian gold junior has a market capitalization of $81.4 million.