Osisko and Franco-Nevada Acquire a GOLD Stream ON Solgold’S Cascabel Copper-GOLD Project
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OSISKO AND FRANCO-NEVADA ACQUIRE A GOLD STREAM ON SOLGOLD’S
CASCABEL COPPER-GOLD PROJECT
Montréal, July 15, 2024 – Osisko Gold Royalties Ltd (the “ Corporation” or “Osisko ”) (OR: TSX & NYSE) is
pleased to announce that its wholly -owned subsidiary, Osisko Bermuda Limited (“OBL”), in partnership with
Franco-Nevada (Barbados) Corporation (“ FNB”), a wholly -owned subsidiary of Franco- Nevada Corporation
(“Franco-Nevada”) (FNV: TSX & NYSE), has entered into a definitive Purchase and Sale Agreement (Gold) (the
“Gold Stream”) with SolGold plc and certain of its wholly-owned subsidiaries (collectively, “SolGold”) (SOLG: LSE
& TSX), with reference to gold production from SolGold’s 100%-owned Cascabel copper -gold project located in
Ecuador (the “ Project” or “ Cascabel”). Osisko also holds a 0.6% NSR royalty on Cascabel which it purchased
from SolGold in 2022.
Pursuant to the terms of the Gold Stream, OBL and FNB (collectively, the “Stream Purchasers”) will make initial
deposits totaling US$100 million to SolGold in three equal tranches to fund the Project’s pre-construction costs
(the “Pre-Construction Deposit”). The first tranche of the Pre-Construction Deposit will be funded at closing, with
the two subsequent tranches subject to the achievement of key development milestones.
Thereafter, the Stream Purchasers will make additional deposits totaling US$650 million to SolGold to fund
construction costs once the Project is fully financed and further derisked (the “ Construction Deposit”, and
together with the Pre-Construction Deposit, the “Deposit”). OBL will provide 30% of the Deposit in exchange for
a 30% interest in the Gold Stream and FNB will provide 70% of the Deposit in exchange for a 70% interest in the
Gold Stream.
Jason Attew, President & CEO of Osisko commented: “Cascabel is a world-class copper-gold project that has the
potential to become a multi -generational mine. SolGold’s focus on sustainable development has generated very
strong support from the Government of Ecuador and the local communities near the Project. This new stream
investment, which complements Osisko’s existing royalty on Cascabel, further enhances Osisko’s peer leading
growth profile at an attractive rate of return. We are excited to be partnering with Franco- Nevada to continue to
support SolGold and the development of this exceptional asset.”
INVESTMENT HIGHLIGHTS
• Increasing Exposure to a Long Life, Tier-1i Copper-Gold Asset
o Cascabel represents one of the most significant copper -gold discoveries in recent history and one of
the few long life, high production projects that is not currently owned by a major mining company.
o The 2024 pre- feasibility study for the Project’s Alpala deposit (the “ 2024 PFS ”) estimates total
production over an initial 28-year mine life of 2.9 million tonnes of copper, 6.9 million ounces of gold
and 18.4 million ounces of silver at an all-in sustaining cost of US$0.69 per pound of copper, placing
it in the 1st quartile on the global copper mine cost curve.
o The Exploitation Contract signed with the Government of Ecuador on June 5, 2024 outlines the fiscal
and legal frameworks for the development of Cascabel.
o SolGold has demonstrated a s trong commitment to responsible and sustainable operating practices,
with the aim of establishing one of the lowest carbon footprint copper mines globally .
• Potential to Materially Extend Mine Life through Near-Mine Exploration
o The initial 28-year mine life outlined in the 2024 PFS only considers the exploitation of 18% of the
Measured and Indicated Mineral Resources from the Alpala deposit.
o There are numerous regional exploration targets that have similar geophysical and geochemical
characteristics to Cascabel’s known mineralized porphyry clusters.
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o The Tandayama-America deposit, located just 3km north of the Alpala deposit, has the potential to be
exploited by open-pit mining methods and could provide additional mill feed and project development
flexibility.
• Robust Gold Stream with Phased Investment as Project Advances
o Based on the 2024 PFS, annual deliveries to OBL over the initial 28- year mine life are expected to
average approximately 12,000 gold equivalent ounces (“ GEOs”), including an average of
approximately 23,000 GEOs per annum for the first 10 years.
o OBL’s investment is staged and based on the achiev ement of key development milestones, with
US$30 million available pre -construction and the balance available for construction once the Project
is further derisked and fully financed.
o The Gold Stream includes adjustment mechanisms to preserve the economics to the Stream
Purchasers in the event of changes to the scale of the Project or timeline of development .
STREAM DETAILS (ATTRIBUTABLE TO OBL)
• Pre-Construction Deposit: OBL will make initial cash deposits totaling US$30 million to SolGold to fund pre-
construction costs of the Project, including:
o US$10 million on closing; and
o two additional staged deposits of US$10 million each, subject to satisfaction of key development
milestones and other conditions precedent.
• Construction Deposit: OBL will provide additional deposits to SolGold totaling US$195 million to fund
construction costs of the Project , subject to customary conditions including execution by SolGold of an
Investment Protection Agreement with the Government of Ecuador related to the construction and
development of the Project, receipt of all material permits, a board- approved construction decision and the
balance of the construction financing being available.
• Streamed Metal: OBL will purchase refined gold equal to 6% of the contained gold produced from the Project
until 225,000 ounces of gold have been delivered to it, and 3.6% thereafter for the remaining life of the mine.
Over the initial 28- year mine life, SolGold estimates contained gold production from the Project to average
approximately 253,000 ounces per annum, including an average of approximately 392,000 ounces per annum
for the first 10 years.
• Production Payments: OBL will make ongoing cash payments for refined gold delivered equal to 20% of the
spot price of gold at the time of delivery.
• SolGold Change of Control: In the event of a change of control of SolGold:
o the Stream Purchasers have the option to terminate the Gold Stream and receive repayment of the
Deposit that has been advanced by such date plus a return (the “Purchaser Termination Option”);
or
o if the Purchaser Termination Option is not exercised, then:
prior to the third anniversary of closing, an acquiror of SolGold shall have the one-time right
to repurchase 50% of the Gold Stream; or
subsequent to the third anniversary of closing but prior to the fifth anniversary of closing, an
acquiror of SolGold shall have the one-time right to repurchase 33% of the Gold Stream,
in each case, for a one-time payment of gold equal to 50% or 33% (as applicable) of the then
advanced amount of the Deposit plus an amount equating to a 15% internal rate of return on the
portion of the Deposit being bought back, plus a change of control fee.
• Other Considerations:
o OBL has agreed to commit funds to support environmental and social initiatives being advanced by
SolGold in relation to the Project.
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o The Gold Stream is referenced to production from the entire Cascabel concession as well as any
production from other properties owned by SolGold that is processed through the Cascabel plant and
associated facilities.
o SolGold has granted the Stream Purchasers a right of first refusal in respect of the sale or transfer of
any royalty, stream or similar interest in the Project.
o SolGold and certain of its subsidiaries have provided the Stream Purchasers with corporate
guarantees and security over their assets related to the Project.
CASCABEL PROJECT OVERVIEW
Cascabel hosts one of the largest undeveloped copper-gold mineral resources in the world. The Project is located
in the Imbabura province of northern Ecuador, approximately 100 kilometers (“km”) north of the capital city of Quito
and 50 km north-northwest of the provincial capital of Ibarra, and is in proximity to power, water and deep-water
port infrastructure.
Three significant deposits have been identified thus far at Cascabel, namely the Alpala porphyry copper -gold-
silver deposit, the Tandayama-America porphyry copper -gold deposit, and the Aguinaga porphyry copper -gold
deposit. These mineralised systems are hosted within the Andean Porphyry Belt that extends from southern Chile
right through to Ecuador and Colombia to Panama. The Andean Porphyry Belt hosts the largest concentrations of
copper in the world, including numerous deposits with active mining operations.
In March 2024, SolGold released the results of the 2024 PFS for the Alpala deposit at Cascabel . The 2024 PFS
outlined an initial 28- year mine life based on the exploitation of only 18% of the Alpala Measured and Indicated
Mineral Resource. The 2024 PFS envisages the phased development of an underground mine exploited using the
block caving mining method. The target extraction rate in phase one is estimated to be approximately 12 million
tonnes per annum, with production expanding to 24 million tonnes per annum in year six of the mine life. The
proposed process flowsheet includes a conventional copper-gold flotation process consisting of a single rougher
stage and a multi-stage cleaning circuit to produce a clean copper-gold-silver concentrate. Over the current life of
mine, the plant is expected to produce 2.9 million tonnes of copper, 6.9 million ounces of gold and 18.4 million
ounces of silver.
In June 2024, SolGold announced the signing of the Exploitation Contract for Cascabel with the Government of
Ecuador. The Exploitation Contract and existing legislation and regulations establish the legal and financial terms
and conditions required for the Project's development.
SolGold has made considerable efforts to undertake environmental studies and community engagement to
facilitate the advancement of the Project. Several environmental baseline studies have been initiated in support of
future permitting associated with mine development and submission of an Environmental and Social Impact
Assessment. Cascabel is expected to bring substantial long-term benefits to the Ecuadorian economy and local
communities through significant investment, job creation, and sustainable growth.
For more information, please refer to SolGold’s continuous disclosure documents filed on SEDAR + at
www.sedarplus.ca.
About SolGold plc
SolGold is a leading resources company focused on the discovery, definition and development of world- class
copper and gold deposits. SolGold operates with transparency and in accordance with international best practices.
SolGold is committed to delivering value to its shareholders while simultaneously providing economic and social
benefits to impacted communities, fostering a healthy and safe workplace, and minimizing environmental impact.
For more information, please visit SolGold’s corporate website at https://solgold.com.au/.
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Qualified Person
The scientific and technical content of this news release has been reviewed and approved by Guy Desharnais,
Ph.D., P.Geo., Vice President, Project Evaluation at Osisko Gold Royalties Ltd, who is a “qualified person” as
defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
About Osisko Gold Royalties Ltd
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 185 royalties, streams and precious metal
offtakes. Osisko’s portfolio is anchored by its cornerstone asset, a 3-5% net smelter return royalty on the Canadian
Malartic Complex, which is home to one of Canada’s largest gold mines.
Osisko Gold Royalties Ltd
1100, av. des Canadiens-de-Montreal
Suite 300, P.O. Box 211
Montreal, QC, H3B 2S2
Osisko Bermuda Limited
Cumberland House
1 Victoria Street, 5th Floor
Hamilton HM11
Bermuda
For further information, please contact Osisko Gold Royalties Ltd:
Grant Moenting
Vice President, Capital Markets
Tel: (514) 940-0670 x116
Cell: (365) 275-1954
Email: [email protected]
Heather Taylor
Vice President, Sustainability and Communications
Tel: (514) 940-0670 x105
Email: [email protected]
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Cautionary Statement Regarding Forward-looking Statements
Certain statements contained in this press release may be deemed “forward- looking statements” within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and “forward- looking information” within the meaning of applicable Canadi an securities
legislation. Forward-looking statements are statements other than statements of historical fact, that address, without limitation, future events,
and in particular that the potential of the Project to become a multi -generational mine and to generate attractive returns, that the project will
continue to be developed in accordance with the 2024 PFS, that the hypothesis and conclusion of the 2024 PFS will be confirmed by additional
technical studies, that sustainable mining practices will be implemented at the Project , that regional exploration will be successful and that
additional deposits will be found or will provide additional mill feed, that expected deliveries to OBL will be met, that all conditions will be met
to release all tranches of the Deposit, the occurrence of a change of control of SolGold, that the right of first refusal granted by SolGold to the
Purchaser will ever be exercised, that the expected benefits of the Project to the Ecuadorian economy will materialize, production estimates of
Osisko’s assets (including increase of production), timely developments of mining properties over which Osisko has royalties, streams, offtakes
and investments, management’s expectations regarding Osisko’s growth, results of operations, estimated future revenues, production costs,
carrying value of assets, ability to continue to pay dividend, requirements for additional capital, business prospects and opportunities future
demand for and fluctuation of prices of commodities (including outlook on gold, silver, diamonds, other commodities) currency markets and
general market conditions. In addition, statements and estimates (including data in tables) relating to mineral 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, ident ified 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”, “woul d”, “may”, “could” or
“should” occur. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, most of which are beyond
the control of Osisko, and actual results may accordingly differ materially from those in forward-looking statements. Such risk factors include,
without limitation, (i) with respect to properties in which Osisko holds a royalty, stream or other interest; risks related t o: (a) the operators of
the properties, (b) timely development, permitting, construction, commencement of production, ramp -up (including operating and technical
challenges), (c) differences in rate and timing of production from resource estimates or production forecasts by operators, ( d) differences in
conversion rate from resources to reserves and ability to replace resources, (e) the unfavorable outcome of any challenges or litigation relating
title, permit or license, (f) hazards and uncertainty associated with the business of exploring, development and mining 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; ( g) that further technical studies materially depart from the 2024 PFS ; (ii) with respect to external factors: (a)
fluctuations in the prices of the commodities that drive royalties, streams, offtakes and investments held by Osisko, (b) fluctuations in the value
of the Canadian dollar relative to the U.S. dollar, (c) regulatory changes by national and local governments, including permitting and licensing
regimes and taxation policies; regulations and political or economic developments in any of the countries where properties in which Osisko
holds a royalty, stream or other interest are located or t hrough which they are held, (d) continued availability of capital and financing and
general economic, market or business conditions, (e) responses of relevant governments to infectious diseases outbreaks and t he
effectiveness of such response and the potential impact of such outbreaks on Osisko’s business, operations and financial condition;(iii) with
respect to internal factors: (a) business opportunities that may or not become available to, or are pursued by Osisko or (b) the integration of
acquired assets, (c) the determination of Osisko’s PFIC status (d) Osisko’s ability to deliver on its climate strategy. The forward- looking
statements contained in this press release are based upon assumptions management believes to be reasonable, including, without limitation:
the absence of significant change in the Corporation’s ongoing income and assets relating to determination of its Passive Foreign Investment
Company (“PFIC”) status; the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated
or intended and, with respect to properties in which Osisko holds a royalty, stream or other interest, (i) the ongoing development and operation
of the properties by the owners or operators of such properties in a manner consistent with past practice and with public disclosure (including
forecast of production), (ii) the accuracy of public statements and disclosures made by the owners or operators of such underlying properties
(including expectations for the development of underlying properties that are not yet in production), (iii) no adverse development in respect of
any significant property, (iv) that statements and estimates relating to mineral reserves and resources by owners and operators are accurate
and (v) the implementation of an adequate plan for integration of acquired assets. All forward-looking statements contained in this press release
are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.
For additional information on risks, uncertainties and assumptions, please refer to the most recent Annual Information Form of Osisko filed on
SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.govwhich also provides additional general assumptions in connection w ith these
statements. Osisko cautions that the foregoing list of risk and uncertainties is not exhaustive. Investors and others should carefully consider
the above factors as well as the uncertainties they represent and the risk they entail. Osisko believes that the assumptions reflected in those
forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be accurate as actual results
and prospective events could materially differ from those anticipated such the forward-looking statements and such forward-looking statements
included in this press release are not guarantee of future performance and should not be unduly relied upon. These statements speak only as
of the date of this press release. In this press release, Osisko relies on information publicly disclosed by other issuers and third parties pertaining
to its assets and, therefore, assumes no liability for such third- party public disclosure. Osisko undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable
law.
i Please see SolGold’s press release titled Key Financial Developments dated May 14, 2024 available on
SolGold’s SEDAR+ profile at www.sedarplus.ca.