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