Victoria Gold's Eagle Gold Project camp in the Yukon Territory. Source: Victoria Gold Corp.
Victoria said it has signed agreements with Orion Mine Finance, Osisko Gold Royalties Ltd. [OR-TSX, NYSE], and Caterpillar Financial Services Ltd. in relation to the financing package.
Under the agreement, Osisko Gold Royalties has signed a term sheet with Victoria Gold to acquire a 5% net smelter return royalty for $98 million on the Dublin Gulch property.
Dublin Gulch hosts the Eagle Gold Project, a shovel-ready gold project which hosts 2.7 million ounces of proven and probable gold reserves contained in 123 million tonnes of ore with a grade of 0.67 g/t gold as outlined in a NI 43-101 compliant feasibility study.
When in production, the mine is expected to produce approximately 200,000 ounces of gold annually at an operating cost of approximately US $550/oz. The project is permitted for construction and operations.
Victoria Gold said it has executed a term sheet with respect to the sale of the royalty to Osisko, which has agreed purchase 100 million common shares of Victoria on a private placement basis at 50 cents a share for proceeds of $50 million.
Other key highlights of the financing package include:
Two credit facilities totalling US$175 million (approximately $219 million)An equipment financing facility for up to US$50 million ($63 million)A private placement of Victoria common shares to two separate subscribers for a total of $125 million (Canadian)Victoria Gold shares rose 12% to $0.045 on Thursday to 42 cents. Osisko was down 0.16% or $0.02 to $12.52.
Osisko emerged as a world-class gold-focused royalty and streaming company in July 2017 after the company completed the acquisition of a high-quality precious metals portfolio of assets from Orion Mine Finance Group.
The portfolio consists of 74 royalties, streams and precious metal offtakes for a total consideration of $1.125 billion.
Following the acquisition, Osisko held 131 royalties and precious metal offtakes, including its cornerstone 5% net smelter return royalty on the Malartic gold mine in Quebec, which ranks as Canada's largest producing gold mine, and a 2% to 3.5% net smelter royalty on the ??l?(C)onore gold mine, also in Quebec.
In addition, the company acquired a 9.6% diamond stream on the Renard diamond mine in Quebec and a 4% gold and silver stream on the Brucejack gold and silver mine in northwestern British Columbia, all of which are new, high-quality mines in Canada. Osisko also holds a 100% silver stream on the Mantos Blancos copper mine in Chile.