OSISKO ANNOUNCES SHARE REPURCHASE AND SECONDARY OFFERING Transactions to Reduce Orion Share Ownership to 7.7%
OSISKO ANNOUNCES SHARE REPURCHASE AND SECONDARY OFFERING
Transactions to Reduce Orion Share Ownership to 7.7%
MONTREAL, June 25, 2019 – Osisko Gold Royalties Ltd ("Osisko" or the "Company") (TSX &
NYSE: OR) is pleased to announce that Betelgeuse LLC (" Orion"), a jointly owned subsidiary of certain
investment funds managed by Orion Resource Partners, has entered into an agreement with a syndicate
of underwriters led by CIBC Capital Markets and BMO Capital Markets (the "Underwriters"), pursuant to
which the Underwriters have agreed to purchase , on a bought deal basis , an aggregate of 6,850,000
common shares of Osisko (" Common Shares") held by Orion at an offering price of $ 14.10 per Common
Share (the " Secondary Offering Price ") for total gross proceeds to Orion of $ 96,585,000 (the
"Secondary Offering"). Osisko will not be receiving any of the proceeds of the Secondary Offering.
Amounts are in Canadian dollars unless otherwise noted.
Orion has granted the Underwriters an over -allotment option, exercisable at any time up to 30 days from
and including the date of closing of the Secondary Offering, to purchase up to 1,027,500 Common
Shares, at the Secondary Offering Price (the "Over-Allotment Option").
In a concurrent transaction, Osisko has agreed to purchase for cancellation 12,385,717 of its Common
Shares from Orion (the " Share Repurchase "). The purchase price per Common Share to be paid by
Osisko under the Share Repurchase w ill be the Secondary Offering Price. Payment from Osisko to Orion
will consist of a combination of cash and the direct transfer of other equity securities currently held by
Osisko. In a concurrent transaction, Osisko has also agreed to sell to separate ent ities managed by Orion
Resource Partners certain other equity securities held by Osisko for cash.
Upon closing of the Secondary Offering and the Share Repurchase and prior to the exercise of the Over -
Allotment Option, Orion's ownership of Osisko's issued and outstanding Common Shares will be reduced
from 19.5% to 7.7%.
Benefits to Osisko:
1. 8% reduction in number of Osisko’s issued and outstanding common shares at an attractive
price, resulting in an immediate positive impact on Osisko’s earnings per share and cash flow per
share;
2. Monetization of certain less liquid equity positions held by Osisko; and
3. Overall reduction in the weight of Osisko’s equity portfolio in relation to the overall size of the
business.
Sean Roosen, Chair and CEO of Osisko stated: "We are very pleased to be able to repurchase our
shares from Orion in this transaction , which simplifies our core portfolio of marketable securities in the
process. This sets the stage for easier valuation of Osisko in the marketplace, and continues our process
of bringing our accelerator company investments to full cycle. T oday’s transactions will allow us to
continue growing our business and to expand upon our unique business model in a strengthening gold
market. Since we started the company five years ago, we have rewarded our shareholders with dividends
and share buy backs totaling $139 million, benefits from the success of the projects we have chosen for
investment. We will continue working hard for our shareholders, taking advantage of our robust asset
base and balance sheet."
Details of the Secondary Offering
Pursuant to the Secondary Offering, Orion will be selling a total of 6,850,000 Common Shares. The
Common Shares will be offered by way of a short form prospectus in all of the provinces of Canada and
in the United States under the multi -jurisdictional disclosure system adopted by the United States and
Canada. A preliminary short form prospectus and a registration statement on Form F-10 relating to the
Secondary Offering have been filed with Canadian securities regulatory authorities and the U.S.
Securities and Exchange Commission (the "SEC"), respectively.
Orion has agreed with the Underwriters that its remaining Common Shares will be subject to a 180 day
lock-up period, subject to customary exceptions.
Details of the Share Repurchase
As part of the Share Repurchase, Osisko has agreed to purchase for cancellation 12,385,717 of its
Common Shares from Orion at the Secondary Offering Price, for an aggregate purchase price paid by
Osisko to Orion in the amount of approximately $174.6 million (the "Aggregate Purchase Price").
Osisko will also sell to separate entities managed by Orion Resource Partners all of the shares of Victoria
Gold Corp. (the "Victoria Disposition") and Dalradian Resources Inc. (the "Dalradian Disposition" and,
together with the Victoria Disposition, the " Concurrent Investment Disposition ") currently held by
Osisko in exchange for cash consideration in the amount of $129.5 million.
The Aggregate Purchase Price will be satisfied by cash in the amount of $ 129.5 million as well as the
direct transfer of certain other equity securities of exploration and develop ment companies currently held
by Osisko, as detailed in the table below.
Consideration Type Value (C$ M)
Transfer of Equity Securities $45.1
Cash $129.5
Total Aggregate Purchase Price $174.6
The following table sets out the equity positions which Osisko has agreed to transfer or sell to Orion or
separate entities managed by Orion Resource Partners, as applicable, as part of the Share Repurchase ,
the Victoria Disposition or the Dalradian Disposition, as the case may be.
Company Settlement Shares Value (C$ M)
Victoria Gold Corp. Cash 154,517,996 $71.4
Dalradian Resources Inc. Cash 38,267,014 $58.1
Aquila Resources Inc. Transfer 49,651,857 $9.7
Highland Copper Company Inc. Transfer 74,420,434 $3.0
Ascot Resources Ltd. Transfer 6,974,129 $5.2
TerraX Minerals Inc. Transfer 11,883,848 $5.0
Other positions Transfer $22.2
Total $174.6
The Share Repurchase will result in an 8% reduction in basic Common Shares outstanding . Following the
Share Repurchase, Osisko will have 142,896,914 Common Shares outstanding . Upon closing of the
Share Repurchase and Concurrent Investment Disposition , Osisko's equity portfolio will continue to hold
positions in Osisko Mining Inc., Barkerville Gold Mines Ltd., Falco Resources Ltd., Osisko Metals
Incorporated and Minera Alamos Inc.
Osisko remains a significant financial partner to Victoria Gold as holder of its 5% net smelter return
("NSR") royalty on the Eagle Gold Mine. Sean Roosen will remain on the board of directors and stated
"we have been and continue to be strong supporters of the Eagle Project and the Victoria board and
management team. They have done an exceptional job on engineering and construction of the project. Of
special note are the community, social and environmental programs the Victoria team h as created and
established in the Yukon. The Yukon and Eagle Gold Mine will continue to be an investment priority for
Osisko for many years to come."
Orion will also cease to be entitled to nominate a director to the board of directors of Osisko, and Oskar
Lewnowski, the current Orion nominee , will resign from the board in connection with the closing of these
transactions.
The Share Repurchase is expected to be completed shortly following the date hereof with respect to
7,319,499 Common Shares, representing Common Shares acquired with the proceeds of the Dalradian
Disposition and the direct transfer of equity securities under the Share Repurchase (the " Initial
Repurchase"), and shortly after the initial Repurchase with respect to 5,066,218 Common Shares,
representing Common Shares acquired with the proceeds of the Victoria Disposition, subject in each case
to customary closing conditions , including re ceipt of an Advanced Ruling Certificate (ARC) under the
Competition Act (Canada) in the case of the Victoria Disposition . Closing of the Secondary Offering is
expected to occur on or about July 11, 2019, subject to completion of the Initial Repurchase and other
customary closing conditions. As a result of the Share Repurchase, the Comp any will be suspending
further purchases under its normal course issuer bid, which is set to expire in December 2019. Osisko will
evaluate renewing its normal course issuer bid in due course.
No securities regulatory authority has either approved or disapproved of the contents of this news
release. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale wo uld be
unlawful.
The Company has filed a registration statement (including a prospectus) with the U.S. Securities and
Exchange Commission (the "SEC") for the Secondary O ffering. The Common Shares to be sold in the
Secondary Offering described in this docu ment may not be sold nor may offers to buy be accepted prior
to the time the registration statement becomes effective. Before readers invest, they should read the
prospectus in that registration statement and other documents the Company has filed with the SEC for
more complete information about the Company and the Secondary Offering. The Company has also filed
a preliminary short form prospectus relating to the Secondary O ffering with each of the provincial
securities regulatory authorities in Canada. Poten tial investors may get any of these documents for free
by visiting EDGAR on the SEC website at www.sec.gov or, when such documents become available, via
SEDAR at www.sedar.com. Alternatively, the Company, any underwriter or any dealer participating in the
Secondary Offering will arrange to send potential investors the prospectus without charge if requested in
the U.S. from CIBC Capital Markets, 425 Lexington Avenue, 5th floor, Ne w York, NY, by telephone at
(800) 282 -0822, or by email at [email protected] or BMO Capital Markets Corp., Attn: Equity
Syndicate Department, 3 Times Square, 25th Floor, New York, NY 10036 (Attn: Equity Sy ndicate), or by
telephone at (800) 414-3627, or by email at [email protected].
Special Committee Review Process
To review and evaluate the merits of the Share Repurchase and Concurrent Investment Disposition , the
board of directors of Osisko established a special committee of independent directors (the " Special
Committee"). Stikeman Elliott LLP acted as legal advisor to Osisko in connection with the Share
Repurchase and Concurrent Investment Disposition and the Special Committee retained National Bank
Financial Inc. as its independent financial advisor. The Special Committee undertook a deliberate and full
consideration of the Share Repurchase and Concurrent Investment Di sposition with the assistance of
such advisors, and, upon the recommendation of the Special Committee that, among other things, the
Share Repurchase and Concurrent Investment Disposition are in the best interests of Osisko, the board
of directors of Osisko (other than one interested director who abstained from voting) unanimously
approved the Share Repurchase and Concurrent Investment Disposition.
Orion is a "related party " of Osisko within the meaning of Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ( "MI 61-101") since it holds Common Shares entitling it
to more than 10% of the voting rights attached to all the issued and outstanding voting securities of
Osisko. Therefore, the Share Repurchase and Concurrent Investment Disposition constitute "related party
transaction" within the meaning of MI 61-101. Osisko is exempted from the formal valuation and minority
approval requirements pursuant to MI 61 -101 since neither the fair market value of the subject m atter of,
nor the fair market value of the consideration for, the Share Repurchase, together with the fair market
value of the subject matter of, or the fair market value of the consideration for, the Concurrent Investment
Disposition, represent more than 25% of the market capitalization of Osisko.
About Osisko Gold Royalties Ltd
Osisko Gold Royalties Ltd is an intermediate precious metal royalty company that holds a North American
focused portfolio of over 135 royalties, streams and precious metal offtakes. Osisko's portfolio is
anchored by its 5% NSR royalty on the Canadian Malartic Mine, which is the largest gold mine in Canada.
Osisko also owns a portfolio of publicly held resource companies, including a 32.7% interest in Barkerville
Gold Mines Ltd., a 16.6% interest in Osisko Mining Inc. and a 19.9% interest in Falco Resources Ltd.
Osisko is a corporation incorporated under the laws of the Province of Québec, with its head office is
located at 1100 avenue des Canadiens-de-Montréal, Suite 300, Montréal, Québec, H3B 2S2.
Forward-Looking Information
Certain statements made in this press release may constitute forward -looking information or forward -looking statements (together,
"forward-looking statements") within the meaning of applicable Canadian securities laws and the United States Private Securities
Litigation Reform Act of 1995. All statements in this release, other than statements of historical fact, that address future events,
developments or performance that Osisko expects to occur, including the anticipated financial and other impacts of the Secondary
Offering, the Share Repurchase , the Victoria Disposition and the Dalradian Disposition and the anticipated completion of the
Secondary Offering, the Share Repurchase, the Victoria Disposition and the Dalradian , are forward -looking statements, as they
involve implied assessment, based on certain estimates and assumptions. Forward -looking statements are statements that are not
historical facts and are generally, but not always, identified by the words "expects", "is expected" "plans", "anticipates", "believes",
"intends", "estimates", "projects", "potential", "scheduled" and similar expressions or variations (including negative variations of such
words and phrases), or may be identified by statements to the effect that certain actions, events or conditions "will", "woul d", "may",
"could" or "should" occur. Although Osisko believes the expectations expressed in such forward -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 forward-looking statements.
The forward -looking statements contained in this press release are based upon assumptions management believes to be
reasonable. However, there can be no assurance that forward -looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements. Investors are cautioned that forward -looking
statements are no t guarantees of future performance. Osisko cannot assure investors that actual results will be consistent with
these forward-looking statements and investors should not place undue reliance on forward -looking statements due to the inherent
uncertainty ther ein. 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 electronically 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. Osisko cautions that the list
of risk fact ors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results.
Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward -looking information and
are cautioned not to place undue reliance on such information. The forward -looking information set forth herein reflects Osisko’s
expectations as at the date of this press release and is subject to change after 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:
Joseph de la Plante
Vice President, Corporate Development
Tel. (514) 940-0670