Osisko Acquires GOLD Royalty ON Victoria Gold’S Fully-Financed, Shovel-Ready Eagle GOLD Project IN Canada
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OSISKO ACQUIRES GOLD ROYALTY ON VICTORIA GOLD’S
FULLY-FINANCED, SHOVEL-READY EAGLE GOLD PROJECT IN CANADA
(Montréal, March 8, 2018) Osisko Gold Royalties Ltd ( “Osisko”) (OR: TSX & NYSE) is pleased to
announce that it has signed a term sheet (the “Term Sheet”) with Victoria Gold Corp . (“Victoria”) to
acquire a 5% net smelter return ( “NSR”) royalty (the “Royalty”) for C$98 million (the “Royalty
Purchase”) on the Dublin Gulch property (the “Property”) which hosts the Eagle Gold project (“Eagle”
or the “Project”) located in Yukon, Canada (“Royalty”).
Eagle is a shovel ready gold project which currently hosts 2.7 million ounces in proven and probable
gold reserves from 123 million tonnes of ore with a grade of 0.67 grams of gold per tonne, as outlined
in a National Instrument 43 -101 feasibility study , and when in production is expected to produce
approximately 200,000 ounces of gold annually at an operati ng cost of approximately US$550 per
ounce. The Project is permitted for construction and operations.
The acquisition of the Royalty provides Osisko with:
A meaningful NSR royalty on a shovel-ready, fully-financed project in Canada;
Near-term cash flow from a premier jurisdiction through the addition of an average 10 ,000
ounces of gold annually over the projected 10-year mine life of Eagle, starting in 2020; and
Additional potential growth through the addition of the Olive deposit and further exploration.
As part of the Term Sheet , Osisko has also agreed to purchase on a private placement basis ,
100,000,000 common shares of Victoria at a price of C$0.50 per common share (the “Private
Placement”), for total financing by Osisko of C$148 million including the Royalty Purchase (the
“Financing”).
In connection with the Financing, Victoria has entered into docum entation with Orion Mine Finance
(“Orion”) and Caterpillar Financial Services Limited (“Caterpillar”) with respect to a construction
financing package totaling approximately C$505 million in aggregate (including the Financing) that is
expected to fully fund the development of the Project through to commercial production.
Sean Roosen, Chair and Chief Executive Officer of Osisko, commenting on the transaction, “We are
very pleased to partner with Victoria to develop Canada’s next premier gold mine, and to ge nerate
important benefits for all project stakeholders . The addition of the Eagle royalty strengthens our
Canadian asset base and add s near-term Canadian gold to Osisko’s growth profile from a fully
permitted, fully-financed and shovel-ready project located in Yukon, a premier mining jurisdiction.
Having been to the project and met with many of the stakeholders, we are looking forward to investing
in and working with Victoria in the Yukon to bring this project to fruition. With the gold price currently
over C$1,700 per ounce , this is a great time to be building a gold project in Canada as there is
availability both from suppliers and in the work force. In addition, the robust economics of this project
set the stage to start what we believe will be a projec t that brings economic change to the area and
will be a meaningful contributor to the Yukon economy , both in the near term and long term , as the
local workforce acquires important skills and experience that will be applied to future projects”
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The Royalty Purchase
As part of the Royalty Purchase, Osisko will advance C$98 million, in exchange for a 5% NSR royalty
on all metals and minerals produced from the Property, which includes the Eagle and Olive deposits,
until an aggregate of 97,500 ounces of refined gold have been delivered to Osisko, and a 3% NSR
royalty thereafter.
The funding of the Royalty is expected to be carried out in two tranches, with the first tranche of C$ 49
million to be funded upon the satisfaction of certain conditions including (but not limited to) the
execution by Victoria and Orion of definitive credit agreements in respect of the Orion debt facilities
and the occurrence of the closing date under such facilities, and the second tranche of C$49 million to
be funded pro rata to drawdowns under the subordinated debt component of the Orion debt facilities.
The Private Placement
Osisko has agreed to purchase 100 million common shares (“Shares”) of Victoria for aggregate
proceeds of C$50 million. The proceeds of the Private Placement will be used primarily for the
purpose of advancing construction of Eagl e, and for working capital purposes . Following the Private
Placement, Osisko expects to have ownership over approximately 121 million common shares of
Victoria, representing approximately 15.7% of the issued and outstanding Victoria common shares. All
securities issued to Osisko under the private placement will be subject to a four -month hold period
from the date of issuance of the securities, pursuant to applicable securities legislatio n. Additionally,
Osisko will have a right to nominate one member to Victoria’s board of directors.
Closing of the transaction is subject to execution of definitive documentation, satisfaction of conditions
precedent and regulatory approvals.
The Dublin Gulch Property and the Eagle Gold Project
Victoria Gold's 100% -owned Dublin Gulch gold property is situated in the central Yukon Territory,
Canada, approximately 375 kilometres north of the capital city of Whitehorse, and approximately 85
kilometres from the village of Mayo. The Property is accessible by road year -round, and is located
within Yukon Energy's electrical grid.
The Property covers an area of approximately 555 square kilometres, and is the site of Victoria’s
Eagle Gold Deposit. The Eagle Gold mine is expected to be Yukon's next operating gold mine and,
between the Eagle and Olive deposits, include Proven and Probable Reserves of 2.7 million ounces of
gold from 123 million tonnes of ore with a grade of 0.67 grams of gold per tonne, as outlined in a
National Instrument 43-101 feasibility study. The NI 43 -101 Mineral Resource for the Eagle and Olive
deposits has been estimated to host 191 million tonnes averaging 0.65 grams of gold per tonne,
containing 4.0 million ounces of gold in the "Measured and Indicated" category, inclusive of Proven
and Probable Reserves, and a further 24 million tonnes averaging 0.61 grams of gold per tonne,
containing 0.5 million ounces of gold in the "Inferred" category.
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About Osisko Gold Royalties Ltd
Osisko Gold Royalties Ltd is an intermediate precious metal royalty company focused on the Americas
that commenced activities in June 2014. Following the acquisition of the Orion portfolio, it now holds a
North American focused portfolio of over 130 royalties, str eams and precious metal offtakes. Osisko’s
portfolio is anchored by five cornerstone assets, including a 5% NSR royalty on the Canadian Malartic
Mine, which is the largest gold mine in Canada. Osisko also owns a portfolio of investments in publicly
held resource companies, including a 15.5% interest in Osisko Mining Inc., a 32.7% in Barkerville Gold
Mines Ltd. and a 12.7% interest in Falco Resources Ltd.
Osisko’s head office is located at 1100 Avenue des Canadiens -de-Montréal, Suite 300, Montréal,
Québec, H3B 2S2.
Forward-looking Statements
Certain statements contained in this press release may be deemed “forward -looking information” and "forward -looking
statements" within the meaning of applicable Canadian Securities Laws and the United States Private Se curities Litigation
Reform Act of 1995 (collectively, the “forward -looking statements”). All statements in this release, other than statements of
historical fact, that address future events, developments or performance that Osisko expects to occur includin g
management’s expectations regarding Osisko’s growth, results of operations, estimated future revenues, requirements for
additional capital, mineral reserve and mineral resource estimates, production estimates, production costs and revenue,
future demand for and prices of commodities, business prospects and opportunities are forward -looking statements. In
addition, statements (including data in tables) relating to reserves and resources and gold equivalent ounces are forward -
looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can
be given that the estimates will be realized. Forward -looking statements are statements that are not historical facts and are
generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”,
“potential”, “scheduled” and similar expressions or variations (Including negative variations), or that events or conditions
“will”, “would”, “may”, “could” or “s hould” occur including, without limitation, the performance of the assets of Osisko, the
realization of the anticipated benefits deriving from its investments and the transaction with Victoria. Although Osisko
believes the expectations expressed in such fo rward-looking statements are based on reasonable assumptions, such
statements involve known and unknown risks, uncertainties and other factors and are not guarantees of future performance
and actual results may accordingly differ materially from those in f orward-looking statements. Factors that could cause the
actual results to differ materially from those in forward -looking statements include, without limitation: fluctuations in the prices
of the commodities that drive royalties held by Osisko (gold and si lver); fluctuations in the value of the Canadian dollar
relative to the U.S. dollar; regulatory changes in national and local government, including permitting and licensing regimes
and taxation policies; regulations and political or economic developments i n any of the countries where properties in which
Osisko holds a royalty or other interest are located or through which they are held; risks related to the operators of the
properties in which Osisko holds a royalty, influence of macroeconomic developments; business opportunities that become
available to, or are pursued by Osisko; continued availability of capital and financing and general economic, market or
business conditions; litigation; title, permit or license disputes related to interests on any of th e properties in which Osisko
holds a royalty or other interest; development, permitting, infrastructure, operating or technical difficulties, delays or ad verse
climatic conditions on any of the properties in which Osisko holds a royalty or other interest; rate and timing of production
differences from resource estimates or production forecasts by operators of properties in which Osisko holds a royalty or
other interest; risks and hazards associated with the business of exploring, development and mining on a ny of the properties
in which Osisko holds a royalty or other interest, including, but not limited to unusual or unexpected geological and
metallurgical conditions, slope failures or cave-ins, flooding and other natural disasters or civil unrest or other uninsured risks.
The forward -looking statements contained in this press release are based upon assumptions management believes to be
reasonable, including, without limitation: the ongoing operation of the properties in which Osisko holds a royalty or other
interest by the owners or operators of such properties in a manner consistent with past practice; the accuracy of public
statements and disclosures made by the owners or operators of such underlying properties; no material adverse change in
the market pric e of the commodities that underlie the asset portfolio; no adverse development in respect of any significant
property in which Osisko holds a royalty, stream or other interest; the accuracy of publicly disclosed expectations for the
development of underlyi ng properties that are not yet in production; and the absence of any other factors that could cause
actions, events or results to differ from those anticipated, estimated or intended.
For additional information with respect to these and other factors and assumptions underlying the forward-looking statements
made in this press release, see the section entitled “Risk Factors” in the most recent Annual Information Form of Osisko
which is filed with the Canadian securities commissions and available electronica lly under Osisko's issuer profile on SEDAR
at www.sedar.com and with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov. The forward -looking
information set forth herein reflects Osisko’s expectations a s at the date of this press release and is subject to change after
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such date. Osisko disclaims any intention or obligation to update or revise any forward -looking statements, whether as a
result of new information, future events or otherwise, other than as required by law.
For further information please contact, please contact Osisko Gold Royalties:
Vincent Metcalfe
Vice President, Investor Relations
Tel. (514) 940-0670
Joseph de la Plante
Vice President, Corporate Development
Tel. (514) 940-0670