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(Kitco News) - Osisko Mining (OSK: TSX) announced today it has concluded a 50/50 joint venture agreement with a subsidiary of Gold Fields Limited for the joint ownership and development of Osisko's Windfall gold project, located in Québec, Canada.
According to a company statement, the transaction closed on May 2, 2023, with Gold Fields acquiring a 50% partnership interest in the "Windfall Mining Group", a partnership formed under the laws of the Province of Ontario, which will develop the Windfall project and the surrounding Urban Barry and Quévillon exploration properties.
Osisko said that pursuant to the terms of the framework agreement, Gold Fields acquired 50% interest in the partnership for an aggregate consideration of C$600 million in cash to Osisko. The partnership agreement also requires Gold Fields to sole fund up to C$75 million in contributions to the partnership for regional exploration.
The company noted that Gold Fields will make two additional separate C$17 million cash payments to Osisko (C$34 million in total), which represent reimbursement of items already incurred by Osisko as part of pre-construction spend.
Importantly, the company noted that Gold Fields and Osisko will share all pre-construction costs (provisional budget estimated at C$250 million) and construction costs (feasibility capital expenditure estimated at C$789 million) on a 50/50 basis going forward.
The Windfall gold deposit is located between Val-d'Or and Chibougamau in the Abitibi region of Québec, Canada. The Windfall resource estimate, assuming a cut-off grade of 3.50 g/t Au, comprises 811,000 tonnes at 11.4 g/t Au (297,000 ounces) in the measured mineral resource category, 10,250,000 tonnes at 11.4 g/t Au (3,754,000 ounces) in the indicated mineral resource category and 12,287,000 tonnes at 8.4 g/t Au (3,337,000 ounces) in the inferred mineral resource category.
The Windfall reserve estimate, assuming 3.5 g/t operating, 2.5 g/t incremental, and 1.7 g/t development cut-off grade, comprises 12,183,000 tonnes at 8.06 g/t Au (3,159,000 ounces) in the probable mineral reserves category.
Osisko's Chairman and CEO John Burzynski commented, "We are very pleased to partner with Gold Fields on the Windfall project and our exploration property portfolio. Today is the start of what we believe will prove to be a long and fruitful partnership with Gold Fields at Windfall, and in what we both believe is a significant emerging gold district in Québec.
"This partnership further strengthens our strong balance sheet, allows us to significantly de-risk Windfall and brings us a very important step closer to realizing our objective of becoming a leading Canadian gold producer. With the proceeds from this transaction, Osisko is fully-funded for our share of development capital to bring Windfall into production."
In its statement, Gold Fields said it believes the projected 10-year LOM (based only on stated mineral reserves in the Windfall feasibility study) to be conservative.
"The average projected all-in-sustaining-cost (AISC), as per the feasibility study, of US$758/oz (C$985/oz) is expected to position Windfall as one of the lowest cost mines in our portfolio, thus enhancing the average asset quality of the Gold Fields portfolio. Further, a producing mine in Canada enhances the jurisdictional quality of our global footprint," Gold Fields added.
Osisko is a mineral exploration company focused on the acquisition, exploration, and development of precious metal resource properties in Canada.
Gold Fields (NYSE: GFI) is a globally diversified gold producer with nine operating mines in Australia, South Africa, Ghana (including the Asanko JV) and Peru and one construction project in Chile.
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