(Kitco News) - Osisko Gold Royalties (TSX: OR & NYSE: OR) announced Monday that it has entered into a binding agreement with SolGold with respect to a US$50 million royalty financing to support the advancement of SolGold's Cascabel copper-gold property in northeastern Ecuador.
As part of the transaction, Osisko will acquire a 0.6% net smelter return royalty (NSR) covering the entire 4,979 hectare Cascabel property, including SolGold's world-class Alpala project for which SolGold released the results of a pre-feasibility study in April of 2022.
The company said it will make an upfront cash payment to SolGold of US$50 million in exchange for the NSR, adding that the NSR will be a life-of-mine instrument covering the entirety of the Cascabel property including the Alpala project.
According to a news release, total resources at Cascabel currently represent approximately 20% and 16% of the total copper and gold in new major deposit discoveries since 2012 (as compiled by SolGold).
The Alpala deposit is SolGold's principal focus on the broader Cascabel property. Alpala is estimated to produce an average of 132 kt Cu and 358 koz Au annually over the life of mine with peak annual production of 210 kt Cu and 829 koz Au. Based on the PFS, Alpala is expected to rank in the first decile in terms of production costs.
President and CEO Sandeep Singh stated, "We are excited to partner with SolGold on one of the best copper-gold discoveries made over the last decade. We believe that Alpala has the potential to become a Tier-1 asset with a much longer mine life than currently envisaged. SolGold was a first mover in Ecuador and we view the broader Cascabel property as having the geological potential to support significant further discoveries. Osisko's investment in SolGold adds yet another high-quality royalty to our portfolio of peer-leading growth."
Osisko is an intermediate precious metal royalty company focused on the Americas that commenced activities in June 2014. Osisko holds a North American focused portfolio of over 175 royalties, streams and precious metal offtakes. Osisko's portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, which is the largest gold mine in Canada.
|
| Franco-Nevada reports net income of $157M in Q3, says on track to meet 2022 guidance |
