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The outlook for deals is 'improving considerably' - Osisko Gold

Kitco News

Osisko Gold Royalties said today it entered in into an agreement with Investissement Québec for a non-brokered private placement of C$85 million.

Funds will be used for working capital.

The streaming and royalty company said it took the funds, so it can better weather market turbulence. Osisko also wants to be cashed up if any opportunities present themselves. 

"We are pleased to announce today's financing with Investissement Québec, who have shown significant confidence in our business model during exceptionally volatile times," said CEO and chair Sean Roosen. "Investissement Québec has been a partner since the early days of the Osisko group and we welcome them onto the shareholder roster in this more meaningful way. The management and board of directors of Osisko felt it was prudent, in the wake of the COVID-19 disruptions, to bolster our balance sheet to weather whatever volatility may still come. The Private Placement also provides the company with added flexibility for acquisitions of new royalties and streams. Going forward, we see the number of, and the quality of, possible royalty and streaming transactions improving considerably."

In a note from Haywood published today, analysts said the valuation is "modest" but the "...financing gives Osisko additional firepower to respond to any opportunities that may emerge in the current market."

Haywood notes that Osisko has almost $200 million in cash and $480 undrawn on their credit facility.

Last week <a href="https://www.kitco.com/news/2020-03-23/Osisko-Gold-Royalties-withdraws-guidance.html">Osisko withdrew guidance</a> the Quebec government closed most mining in the province. Osisko's cornerstone asset, the Canadian Malartic Mine, has been placed on care and maintenance until April 13, 2020. Osisko has a 5% net smelter return royalty on Malartic.

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 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.

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