Osisko Metals Announces Successful Closing of Previously-Announced Acquisition of the Gaspé Copper Project
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OSISKO METALS ANNOUNCES SUCCESSFUL CLOSING OF
PREVIOUSLY-ANNOUNCED ACQUISITION OF THE GASPÉ COPPER PROJECT
(Montréal, July 17, 2023) Osisko Metals Incorporated (the " Company" or "Osisko Metals") (TSX-
V: OM; OTCQX: OMZNF; FRANKFURT: 0B51 ) is pleased to announce that, further to its news
release dated July 11, 2022 (entitled "Osisko Metals Exercises Option to Acquire Gaspé Copper
Project"), it has completed the acquisition (the " Transaction") of a 100% interest in the past-
producing Gaspé Copper Mine ("Gaspé Copper") pursuant to a purchase agreement dated July 8,
2022 between the Company and Glencore Canada Corpor ation, a wholly-owned subsidiary of
Glencore plc ("Glencore").
Robert Wares, Chairman & CEO of Osisko Metals, commented : "The acquisition of the Gaspé
Copper Project is a significant milestone for the Company that provides shareholders with significant
copper exposure in the mining-friendly province of Québec. Last year's excellent drill results at
Gaspé support our belief in the high-value potential of this asset and we are convinced that the
acquisition of Gaspé Copper, together with our ongoing development of our joint-ventured Pine-Point
project, positions Osisko Metals as a premier base metal development company in Canada. I wish
to thank both the Osisko Metals and Glencore teams, as well as all stakeholders, for their diligence
and perseverance in completing this complex transaction that will no doubt benefit all parties and
shareholders."
In connection with the Transaction:
• Glencore was issued a US$25.0 million senior secured convertible note (the " Convertible
Note") of the Company which is convertible into units of Osisko Metals at a price of $0.40
per unit (each, a " Unit"), comprised of one common share of the Company (each, a
"Common Share") and one-half Common Share purchase warrant of the Company (each
whole warrant, a " Warrant"). Each Warrant will be exercisable by Glencore at an exercise
price of $0.46 per Common Share until July 14, 2026.The Convertible Note will bear interest
at a rate equal to the Secured Overnight Financing Rate (SOFR) + 4%, payable annually
and, subject to adjustment or acceleration in certain circumstances, all outstanding principal
and interest under the Convertible Note will be repaid in full by July 14, 2026. The Convertible
Note will be secured against all of the present and after acquired property of the Company.
Upon full conversion of the Convertible Note (assuming conversion on the closing date) and
exercise of the underlying Warrants in full, Glencore would acquire 71,347,826 Common
Shares, representing approximately 21.8% of the Common Shares that would be issued and
outstanding upon the conversion of the Convertible Note and the exercise of the Warrants
issued upon such conversion. Glencore did not own or control, directly or indirectly, any
securities of Osisko Metals immediately prior to the closing of the Transaction.
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• Glencore retained a 1% net smelter returns (" NSR") royalty on the historical Mount Copper
open pit and a 3% NSR royalty on all other minerals extracted from Gaspé Copper.
• Osisko Metals will make a cash payment of US$20.0 million to Glencore upon the
commencement of commercial production at Gaspé Copper.
• Osisko Metals is required to incur a total of $55.0 million in exploration, development and
environmental expenditures, including permitting expenditures, over a period of four years,
which commenced on March 25, 2022, with a minimum of $20.0 million to be incurred by
March 25, 2024.
• Osisko Metals has entered into an offtake agreement with Glencore to purchase 100% of
the concentrates produced at Gaspé Copper.
• The Company and Glencore entered into an investor rights agreement (the " Investor Rights
Agreement"), pursuant to which Glencore has been granted certain investor rights, provided
that it maintains certain ownership thresholds in the Company. Among other things, the
Investor Rights Agreement provides Glencore with the right to designate one director for
appointment to the board of directors of the Company, participation rights in future equity
issuances, piggyback registration rights and the right to maintain its pro-rata position in
Osisko Metals.
Upon conversion of the Convertible Note by Glencore, Glencore may hold, on a post-conversion
basis, such number of Common Shares and Warrants that would exceed 20% of the pro forma
issued and outstanding Common Shares, both on a non-diluted and partially-diluted, post-
conversion basis, thus resulting in Glencore becoming a Control Person (as such term is defined in
the policies of the TSX Venture Exchange (the " Exchange")) of the Company. Accordingly, in
accordance with the policies of the Exchange, the disinterested shareholders of the Company were
required to approve Glencore as a Control Person of the Company, which approval was obtained at
a meeting of shareholders held on June 23, 2022. For more information, please refer to the
management information circular of the Company dated May 11, 2022, a copy of which is available
on SEDAR (www.sedar.com) under the Company's issuer profile.
In accordance with the terms of the Investor Rights Agreement, Mr. Peter Wright will be appointed
to the board of the Company. Mr. Wright has served as Director and Vice President, Legal, with
Glencore since 2018, having joined the company in 2014. Previously, Mr. Wright practiced corporate
law in Toronto with Torys LLP and Cassels, Brock & Blackwell LLP as well as in New York with Paul,
Weiss, Rifkind, Wharton & Garrison LLP. Mr. Wright graduated from the McGill Faculty of Law with
Great Distinction in 2004 (BCL/LLB) and has since been called to the bars of Ontario (2005) and
New York (2006).
About Gaspé Copper
Gaspé Copper, a 44-year former copper and molybdenum producer that was initially operated by
Noranda Inc., is located next to the community of Murdochville, in the Gaspé Peninsula of Eastern
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Quebec, approximately 825km east of Montreal. Most support infrastructure for the potential re-
opening of Gaspé Copper is already in place. The former mine site benefits from paved road access
with local highway 198 linking Murdochville with the coastal community of Gaspé.
As of the date hereof, the Company has completed approximately 28,000 meters of drilling at Gaspé
Copper in accordance with the recommended work program outlined in the Technical Report (as
defined below). Between 6,000 meters and 10,000 meters in additional drilling is expected to be
completed by the Company during the 2023-2024 drill program. A reconciliation of the proposed
work program against the work program recomm ended in the Technical Report is provided in the
table below.
Recommended 2021 Work Program
for the Gaspe Copper Deposit Technical Report Incurred on project
as at June 30, 2023(4)
Remaining work as
at June 30, 2023
Drilling 30,000m ($350 m all
inclusive)(1)
$10,500,000 $10,600,000 (2) $3,000,000 (3)
Metallurgical Testing and Analysis $75,000 $75,000 Nil
TOTAL $10,575,000 $10, 675,000 $3,000,000
Note:
(1) After executing the 2022 program, it is now expected that a total of up to 38,000 meters in drilling will be needed to
complete the recommended work program as outlined in the Technical Report.
(2) Approximately 28,000 meters of dr illing has been completed as at June 30, 2023. Increased meterage associated
with the execution of the 2022 drill program is due to t he adjusted location of drill collars with respect to the
recommended program in the Technical Report. In particular, due to safety reasons, all holes had to be collared on
the periphery of the pit, which resulted in drilling added meterage through barren rock in order to obtain
recommended meterage within the mineralized zone. Addition al drilling is therefore required in the 2023 to fully
meet the objectives recommended in the Technical Report.
(3) Represents costs associated with completing between 6, 000 meters and 10,000 meters in additional drilling on the
property, bringing the total size of the drill program to approximately 38,000 meters. Due to confirmation that the
highest-grade material is located in the core of the pit, additional drilling focused on the core of the pit is needed to
maximize resource conversion in that area.
(4) For a summary of the results of all drilling completed at Gaspé Copper since the e ffective date of the Technical
Report, please refer to the news release dated August 4, 2022 entitled "Osisko Metals Reports First Infill Drill Results
at Gaspe Copper", the news release dated October 27, 2022 entitled "Osisko Metals Reports Additional Infill Drill
Results at Gaspe Copper Including 102.0 m of 0.57% Copper and 2.20 gpt Silver", the news release dated January
24, 2023 entitled "Osisko Metals Reports Additional Drill Results at Mount Copper Including 1011.0 Metres Grading
0.46% Copper and 3.19 g/t Silver" and the news release dated April 3, 2023 entitled "Osisko Metals Reports
Additional Drill Results at Mount Copper Including 300.0 Metres Grading 0.55% Copper and 3.59 g/t Silver", copies
of which are available on SEDAR (www.sedar.com) under the Company's issuer profile.
For more detailed information about Gaspé Copper, please refer to the technical report entitled
"Gaspé Copper Project, Mineral Resource Estimate, Mount Copper Deposit, Québec, Canada"
dated June 12, 2022 (with an effective date of April 12, 2022), which has been prepared for Osisko
Metals by representatives of SGS Canada Inc ., a copy of which is available on SEDAR
(www.sedar.com) under Osisko Metals' issuer profile (the "Technical Report").
Advisors
Bennett Jones LLP acted as legal counsel to Osisko Metals in connection with the Transaction.
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About Glencore and its Holdings in the Company
Glencore is one of the world’s largest global diversified natural resource companies and a major
producer and marketer of more than 60 commodities that advance everyday life. Through a network
of assets, customers and suppliers that spans the globe, Glencore produces, processes, recycles,
sources, markets and distributes the commodities that support decarbonization while meeting the
energy needs of today. With around 140,000 employees and contractors and a strong footprint in
over 35 countries in both established and emerging regions for natural resources, Glencore's
marketing and industrial activities are supported by a global network of more than 40 offices.
Glencore's customers are industrial consumers, su ch as those in the automotive, steel, power
generation, battery manufacturing and oil sectors. Glencore also provides financing, logistics and
other services to producers and consumers of commodities.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and
the International Council on Mining and Metals. Glencore is an active participant in the Extractive
Industries Transparency Initiative and is working to decarbonize its operational footprint.
Certain information in this news release is provided by Glencore in satisfaction of the early warning
requirements of National Instrument 62-104 – Take-Over Bids and Issuer Bids . Glencore acquired
the Convertible Note for investment purposes and may elect to convert the Convertible Note, in
whole or in part, into Units in accordance with its terms and to exercise some or all of the Warrants
issued upon conversion. Glencore will continue to monitor the business, prospects, financial
condition and potential capital requirements of t he Company. Depending on its evaluation of these
and other factors, Glencore may from time to time in the future decrease or increase its direct or
indirect ownership, control or direction over securities of the Company through market transactions,
private agreements, subscriptions from treasury or otherwise or may in the future develop plans or
intentions relating to any of the other actions listed in (a) through (j) of Item 5 of Form 62-103F1 –
Required Disclosure Under the Early Warning Requirements.
For the purposes of this news release and early warning disclosure, the pro-forma number and
percentage of outstanding Common Shares owned and controlled by Glencore following completion
of the Transaction is based on 256,574,935 outstanding Common Shares following the completion
of the Transaction.
Glencore’s address is 100 King Street West, Suite 6900, P.O. Box 403, Toronto, Ontario, Canada,
M5X 1E3. Glencore is incorporated under the laws of Ontario. An early warning report in respect of
the investment will be filed on SEDAR (www.sedar.com) under the Company's issuer profile. For a
copy of the report or for further information about Glencore, please contact Peter Fuchs at (416)
305-9273, [email protected].
Osisko Metals’ head office address is 1100 Ave Des Canadiens de Montréal, Suite 300, Montreal,
Quebec, Canada, H3B 2S2.
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About Osisko Metals
Osisko Metals Incorporated is a Canadian explor ation and development company creating value in
the critical metals space, specifically copper and zinc. The Company is a joint venture partner with
Appian Natural Resources Fund III LP for the advancement of one of Canada's premier past-
producing zinc mining camps, the Pine Point project (the " Pine Point Project "), located in the
Northwest Territories, for which the 2022 PEA (as defined herein) has indicated an after-tax NPV of
C$602 million and an IRR of 25%, based on long-term zinc price of US$1.37/lb and the current
mineral resource estimates that are amenable to open pit and shallow underground mining. The
current mineral resource estimate in the 2022 PEA consists of 15.7Mt grading 5.55% ZnEq of
indicated mineral resources and 47.2Mt grading 5.94% ZnEq of inferred mineral resources. Please
refer to the technical report entitled "Preliminary Economic Assessment, Pine Point Project, Hay
River, Northwest Territories, Canada" dated August 26, 2022 (with an effective date of July 30, 2022),
which has been prepared for Osisko Metals an PPM L by representatives of BBA Engineering Inc.,
Hydro-Resources Inc., PLR Resources Inc. and WSP Canada Inc. (the "2022 PEA"). Please refer to
the full text of the 2022 PEA, a copy of which is available on SEDAR (www.sedar.com) under Osisko
Metals' issuer profile, for the assumptions, methodologies, qualifications and limitations described
therein. The Pine Point Project is located on the south shore of Great Slave Lake in the Northwest
Territories, near infrastructure, paved highway access, and has an electrical substation as well as
100 kilometres of viable haulage roads already in place.
As described above, the Company has acquired a 100% interest in the past-producing Gaspé
Copper Mine, located near Murdochville in the Gaspé peninsula of Québec. The Company is
currently focused on resource evaluation of the Mount Copper Expansion Project that hosts an
inferred mineral resource (in accordance with National Instrument 43-101 – Standards of Disclosure
for Mineral Projects) of 456Mt grading 0.31% Cu (see April 28, 2022 news release of Osisko Metals
entitled "Osisko Metals Announces Maiden Resource at Gaspé Copper – Inferred Resource of 456Mt
Grading 0.31% Copper"). Gaspé Copper hosts the largest undeveloped copper resource in Eastern
North America, strategically located near existing infrastructure in the mining-friendly province of
Québec.
For further information on this news release, visit www.osiskometals.com or contact:
Robert Wares, Chairman & CEO of Osisko Metals Incorporated
Email: [email protected]
www.osiskometals.com
Cautionary Statement on Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian
securities legislation based on expectations, estimates and projections as at the date of this news
release. Any statement that involves predictions, expectations, interpretations, beliefs, plans,
projections, objectives, assumptions, future events or performance are not statements of historical
fact and constitute forward-looking information. This news release may contain forward-looking
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information pertaining to the Pine Point Project and Gaspé Copper, including, among other things,
the results of the 2022 PEA and the IRR, NPV and estimated costs, production, production rate and
mine life; the ability to identify additional resources and reserves (if any) and exploit such resources
and reserves on an economic basis; Gaspé Copper hosting the largest undeveloped copper resource
in Eastern North America; Glencore becoming a Control Person of the Company; the high value
potential of Gaspé Copper; and the ability of Osisko Metals to become a premier base metal
development company in Canada.
Forward-looking information is not a guarantee of future performance and is based upon a number
of estimates and assumptions of management, in light of management's experience and perception
of trends, current conditions and expected developments, as well as other factors that management
believes to be relevant and reasonable in the circumstances, including, without limitation,
assumptions about: favourable equity and debt capital markets; the ability and timing for the parties
to fund cash calls to advance the development of the Pine Point Project and pursue planned
exploration and development; future prices of zinc and lead; the timing and results of exploration and
drilling programs at Gaspé Copper and the Pine Point Project; the accuracy of mineral resource
estimates; production costs; operating conditions being favourable; political and regulatory stability;
the receipt of governmental and third party approvals; licenses and permits being received on
favourable terms; sustained labour stability; stability in financial and capital markets; availability of
equipment; the economic viability of the Pine Point Project; and positive relations with local groups.
Forward-looking information involves risks, uncertainties and other factors that could cause actual
events, results, performance, prospects and opportunities to differ materially from those expressed
or implied by such forward-looking information. Factors that could cause actual results to differ
materially from such forward-looking information are set out in the Company's public disclosure
record on SEDAR (www.sedar.com) under Osisko Metals' issuer profile. Although the Company
believes that the assumptions and factors used in preparing the forward-looking information in this
news release are reasonable, undue reliance should not be placed on such information, which only
applies as of the date of this news release, and no assurance can be given that such events will
occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to
update or revise any forward- looking information, whether as a result of new information, future
events or otherwise, other than as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy
or accuracy of this news release. No stock exchange, securities commission or other
regulatory authority has approved or disapproved the information contained herein.