OR.TO · 2020-10-05 12:00:00

OSISKO GOLD ROYALTIES ANNOUNCES SPIN-OUT OF MINING ASSETS AND CREATION OF A PREMIER NORTH AMERICAN GOLD DEVELOPMENT COMPANY Formation of Osisko Development Corp. to Advance the Cariboo Gold Project and Other Canadian and Mexican Properties

Mergers & Acquisitions

OSISKO GOLD ROYALTIES ANNOUNCES SPIN-OUT OF

MINING ASSETS AND CREATION OF A PREMIER

NORTH AMERICAN GOLD DEVELOPMENT COMPANY

Formation of Osisko Development Corp. to Advance the Cariboo Gold

Project and Other Canadian and Mexican Properties

Concurrent CDN $100 Million Bought Deal Equity Offering with Strong

Institutional Shareholder Support

Montréal, October 5, 2020 – Osisko Gold Royalties Ltd ("Osisko Royalties") (OR: TSX & NYSE) and

Barolo Ventures Corp. ("Barolo") (BVC.H: TSX-V) are pleased to announce that they have entered into

a binding letter agreement dated October 5, 2020 (the "Letter Agreement") outlining the terms upon

which Osisko Royalties will transfer certain mining properties (or securities of the entities that directly or

indirectly own such mining properties), including the Cariboo Gold Project, and a portfolio of marketable

securities valued at approximately CDN $116 million, to Barolo in exchange for common shares of

Barolo ("Barolo Shares"), which will result in a "Reverse Take-Over" of Barolo (the "RTO") under the

policies of the TSX Venture Exchange (the "TSX-V"). In this news release, references to the "Resulting

Issuer" or "Osisko Development" are to Barolo after the closing of the RTO.

As part of the RTO, Osisko and Barolo have also entered into an engagement letter dated October 5,

2020 with Canaccord Genuity Corp. and National Bank Financial Inc., on behalf of a synd icate of

underwriters (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to sell,

on a "bought deal" private placement basis, 13,350,000 subscription receipts of Spinco (as defined

herein) (the "Subscription Receipts") at a subscription price of CDN $7.50 per Subscription R eceipt

(the " Issue Price ") for gross proceeds of CDN $100 million (the " Financing"). In addition, the

Underwriters have been granted an option (the "Underwriters' Option"), exercisable in whole or in part

up to 48 hours prior to the closing of the Financing, to purchase up to 3,333,335 additional Subscription

Receipts at the Issue Price for additional gross proceeds of up to approximately CDN $25 million. Each

Subscription Receipt entitles the holder thereof to receive, for no additional consideration and without

further action on the part of the holder thereof, on or about the date that the RTO is completed, one

common share of the Resulting Issuer after giving effect to a 60:1 consolidation of the common shares

of Barolo ( each, a "Resulting Issuer Share ") and one-half-of-one warrant to purchase a Resul ting

Issuer Share (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase

one Resulting Issuer Share for CDN $10.00 for an 18 -month period following the closing of the RTO.

See "Financing Particulars" below.

Sandeep Singh, President of Osisko Royalties, stated: "We are very pleased to announce this spin-

out transaction, which will simplify Osisko Royalties into a pure -play royalty and streaming company,

while maintaining exposure to the company-making assets contributed to Osisko Development. We are

also transferring our exceptional technical team to Osisko Development in order to better leverage their

mine building expertise, while retaining access to the team on an as -needed basis. Osisko Royalties

will also retain royalty and streaming interests in the transferred assets that, when in production, could

potentially deliver approximately 20,000 gold-equivalent ounces per annum to Osisko Royalties. I would

also like to personally thank Sean and the Board of Dir ectors for their confidence as I will transition to

the Chief Executive Officer role at Osisko Royalties and further the succession planning we undertook

earlier this year."

Sean Roosen, Chair and Chief Executive Officer of Osisko Royalties stated: "We eagerly await the

launch of Osisko Development, to advance a rare set of near-term producing and flagship gold assets.

Our vision is to develop the Cariboo Gold Project into one of the predominant mining camps in Canada.

Our belief in that vision has only st rengthened in the past year and I couldn 't be more excited about

leading this new company with the catalysts in front of us . The Osisko team has a proven track record

of creating shareholder value and Osisko Development will leverage our combined explorati on,

permitting, construction and operating expertise to a dvance towards becoming a North American

intermediate gold producer. We always said we would separate and streamline Osisko Royalties, and

this transaction accomplishes that and should result in a meaningful re-rate for both sets of assets."

Attributes of Osisko Development

The formation of Osisko Deve lopment creates a leading North -American mine development company

with a focus on becoming a significant intermediate gold miner with opportunities for near-term

production. Osisko Development will target near-term gold production of over 100,000 ounces per year

from Bonanza Ledge II and the San Antonio Gold Project, followed by production from the company's

flagship Cariboo asset. The following mining pr operties (or securities of the entities that directly or

indirectly own such mining properties) and marketable securities will be transferred by Osisko Royalties

to the Resulting Issuer:

 Cariboo Gold Project (Permitting – British Columbia, Canada)

 San Antonio Gold Project (Permit Amendment – Sonora, Mexico)

 Bonanza Ledge II (Permitting and Construction – British Columbia, Canada)

 James Bay Properties (Exploration – Canada)

 Guerrero Properties (Exploration – Mexico)

 A portfolio of publicly -listed equity positions with a current value of approximately CDN $116

million

The Cariboo Gold Project is advancing through permitting as a 4,750 tonne per day underground

operation with a feasibility study on track for completion in the second half of 2021, full permits expected

in 2022, followed by a short construction period given the significant infrastructure already at site

(including a functioning mill that was operated in 2018). The Cariboo Gold Project is an extremely scarce

asset with current resources totaling 3.2 million ounces in the measured and indicated resource category

and 2.7 million ounces in the inferred resource category on a brownfield site in British Columbia, Canada

(see resource table further in the release f or details). The considerable exploration potential at depth

and along strike distinguishes the camp relative to other development assets as does the historically

low, all-in discovery costs of US$19 per ounce.

Osisko Royalties facilitated the acquisition of the San Antonio Gold Project in Sonora, Mexico for US$42

million to provide Osisko Development with near -term production and significant upside potential. In

return, Osisko Royalties will retain a 15% stream on a fully-funded, high-grade, gold asset with a current

inferred mineral resource of 1.05 million ounces at 1.2 g/t capable of producing more than 50,000 ounces

of gold per year. See "Resulting Issuer Mineral Resource Estimate" below for the accompanying

resource tables for the Cariboo Gold Project and the San Antonio Gold Project.

The San Antonio Gold Project is a past producing mine that went into receivership as an oxide copper

mine. The gold potential of the asset has never been properly evaluated, and Osisko Development will

focus on amending existing permits to transition the mine production to a gold heap leach operation.

There is also significant exploration potential to expand both oxide and sulphide resources. Recent

metallurgical testing has shown that the sulphide resources are highly-amenable to heap leaching.

The exploration packages and equity portfolio contributed to Osisko Development provide further

optionality and exposure to highly prospective projects in mining friendly jurisdictions.

Osisko Royalties' Strategy with Respect to Osisko Development

Osisko Royalties will retain the following royalty or stream interests in the assets of the Resulting Issuer:

 5% NSR royalty on the Cariboo Gold Project and Bonanza Ledge II

 15% gold and silver stream (with ongoing per-ounce payments equal to 15% of the prevailing

price of gold and silver, as applicable) on the San Antonio Gold Project

 3% NSR royalties on the James Bay, Coulon, and Guerrero Properties

In addition, Osisko Royalties will be granted a right of first refusal on all future royalties and streams to

be offered by the Resulting Issuer, a right to participate in buybacks of existing royalties held by the

Resulting Issuer, and other rights customary with a transaction of this nature.

Upon closing of the RTO, Osisko Royalties is expected to own approximately 88% of the outstanding

Resulting Issuer Shares (after giving effect to the Financing but not the Underwriters ' Option). Osisko

Royalties expects the advancement of the assets held by Osisko Development to be funded through

the public markets such that Osisko Royalties' ownership in Osisko Development will be diluted as the

assets are advanced. Osisko Royalties sees significant upside in the assets being contributed to Osisko

Development and expects to benefit from a re-rating as catalysts are unlocked and Osisko Development

progresses toward intermediate producer status. Osisko Royalties will also seek to promote a larger

trading float for Osisko Development as opportunities arise, while aiming to maximize the value of its

investment for shareholders of Osisko Royalties.

Financing Particulars

As part of the RTO, Osisko and Barolo have also entered into an engagement letter dated October 5,

2020 with Canaccord Genuity Corp. and National Bank Financial Inc., on behalf of a syndicate of

Underwriters, pursuant to which the Underwriters have agreed to sell, on a "bought deal" private

placement basis, 13,350,000 Subscription Receipts at the Issue Price for gross proceeds of CDN $100

million. In addition, the Underwriters have been granted the Underwriters' Option, exercisable in whole

or in part up to 48 hours prior to the closing of the Financing, to purchase up to 3,333,335 additional

Subscription Receipts at the Issue Price for additional gross proceeds of up to CDN $25 million. Each

Subscription Receipt entitles the holder thereof to receive, for no additional consideration and without

further action on the part of the holder th ereof, on or about the date that the RTO is completed, one

Resulting Issuer Share and one -half-of-one Warrant. Each Warrant will entitle the holder thereof to

purchase one Resulting Issuer Share for CDN $10.00 for an 18 -month period following the closing o f

the RTO. The Warrants will not be listed. The Resulting Issuer Shares to be issued upon the conversion

of the Subscription Receipts will be freely-tradeable upon the closing of the RTO.

Upon the conversion of the Subscription Receipts, the Underwriters a re entitled to receive a cash

commission equal to 5.0% of the gross proceeds of the Financing; provided that a reduced cash

commission equal to 2.0% shall be payable to the Underwriters in respect of subscribers on the

President's List.

The Financing is expected to close on or about October 29, 2020, with the gross proceeds of the

Financing to be held in escrow pending the satisfaction of the escrow release conditions, which include

the satisfaction of the conditions to the closing of the RTO, the conditional approval of the TSX-V to list

the Resulting Issuer Shares issuable under the RTO and Financing, and certain other customary

conditions.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in

the United States or any other jurisdiction. No securities may be offered or sold in the United States or

in any other jurisdiction in which such offer or sale would be unlawful prior to registration under the U.S.

Securities Act of 1933 or an exemption therefrom or qualification under the securities laws of such other

jurisdiction or an exemption therefrom.

Transaction Particulars

Osisko Royalties and Barolo will enter into a definitive agreement providing for the RTO , pursuant to

which a newly -incorporated sub sidiary of Barolo ( "Barolo Subco ") will amalgamate with a newly -

incorporated subsidiary of Osisko ("Spinco") under the Business Corporations Act (British Columbia),

which will hold, directly or indirectly, the mining properties (or securities of the entities that directly or

indirectly own such mining properties) and marketable securities to be transferred by Osisko Royalties

to the Resulting Issuer, to form "Amalco Subco", following which Amalco Subco will be merged into

Barolo (by way of a vertical amalgamation or voluntary dissolution) to form the "Resulting Issuer";

provided, however, that the definitive structure of the RTO will be determined based on further legal and

tax advice to be received prior to the execution of the definitive agreements relating to the RTO.

As part of the RTO, and subject to any required shareholder and regulatory approvals, Barolo w ill: (i)

change its name to "Osisko Development Corp."; (ii) change its stock exchange ticker symbol to "ODV";

(iii) consolidate its common shares on a 60:1 basis; (iv) adopt new by-laws and other corporate policies;

(v) adopt new security-based compensation arrangements; and (vi) reconstitute the board of directors

and management of the Resulting Issuer. Barolo expects to call a special meeting of its shareholders to

approve various corporate actions, but does not intend to seek shareholder approval for the RTO, as (i)

the RTO is not a related party transaction within the meaning of MI 61-101 or the policies of the TSX-V

and no other circumstances exist which may compro mise the independence of Barolo, (ii) Barolo is

listed on NEX, (iii) the Resulting Issuer is not expected to be subject to a cease trade order or otherwise

suspended from trading on completion of the RTO, (iv) shareholde r approval of the RTO itself is not

required under corporate or securities laws, and (v) a comprehensive news release announcing the

RTO as required under Exchange Policy 5.2 ( Change of Business and Reverse Takeovers ) will be

issued.

The Resulting Issuer is expected to be owned approximately (i) 88% by Osisko Royalties, (ii) 11.8% by

the holders of Subscription Receipts, and (iii) 0.2% by the current holders of Barolo Shares, after giving

effect to the RTO and the Financing (assuming the Underwriters' Option is not exercised).

The full particulars of the RTO, the transferred assets and the Resulting Issuer will be described in a

filing statement prepared in accordance with the policies of the TSX -V. A copy of the filing statement

will be available electronically on SEDAR (www.sedar.com) under Barolo's issuer profile in due course.

In support of the RTO, shareholders of Barolo representing an aggregate of 12 million common shares

of Barolo (or approximately 86% of the outstanding common shares of Barolo) have entered into a voting

support agreement with Osisko Royalties in support of the RTO.

Completion of the RTO is subject to a number of conditions, including, but not limited to, TSX -V

acceptance, closing of the Fina ncing and if applicable, disinterested shareholder approval. Where

applicable, the RTO cannot close until the required shareholder approval is obtained. There can be no

assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection

with the RTO, any information released or received with respect to the RTO may not be accurate or

complete and should not be relied upon. Trading in the securities of Barolo should be considered highly

speculative.

The Letter Agreement was negotiated at arm's length between representatives of Osisko Royalties and

Barolo. The common shares of Barolo will be halted pending further filings with the TSX-V. Barolo may

seek waivers or exemptions from certain listing requirements of the TSX-V in connection with the RTO,

including the requirement to obtain a sponsor for the RTO and the Issue Price of the Subscription

Receipts under the Financing. However, there can be no assurance that any waivers will be obtained.

If a waiver from the sponsorship requirement is not obtained, a sponsor will be identified at a later date.

No deposit, advance or loan has been made or is to be made in connection with the RTO.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed RTO and has

neither approved nor disapproved the contents of this news release.

Management and Board Composition

The board of directors of the Resulting Issuer is expected to include Sean Roosen as Chair, Charles

Page as Lead Director, John Burzynski, and Joanne Ferstman from the Osisko Royalties board. The

rights to board seats will decrease as Osisko Royalties decreases its ownership in the Resulting Issuer

over time. Osisko Development is also in advanced discussions to round out the initial board with three

external candidates with long and successful track records in the mining capital markets.

Management of the Resulting Issuer is expected to include Sean Roosen (Chair and Chief Executi ve

Officer), Chris Lodder (President), Luc Lessard (Chief Operating Officer), Benoit Brunet (Chief Financial

Officer and Corporate Secretary), and a further technical team that will be transferred from Osisko

Royalties to Osisko Development.

Mr. Roosen will transition to the role of Executive Chair of Osisko Royalties to focus on the launch of

Osisko Development. Sandeep Singh, currently President of Osisko Royalties, will take on the role of

Chief Executive Officer.

Resulting Issuer Mineral Resource Estimate

Cariboo Gold Project Mineral Resource Estimate

The updated mineral resource estimate for the Cariboo Gold Project includes 3.2 million ounces of gold

(21.4 million tonnes grading 4.6 g/t Au) in the measured and indicated resource category, and 2.7 million

ounces of gold (21.6 million tonnes grading 3.9 g/t Au) in the inferred resource category. Resource

grades have some built-in dilution integrated through the process of modelling of "vein corridors" as

opposed to individual veins, which, individually have gold grades that are commonly higher than 8.0 g/t.

Metallurgical testing has shown that the mineralization can be effectively upgraded by flotation and x -

ray transmission ore-sorting, owing to the strong association of gold with pyrite. The concen trates can

then be processed at the wholly owned QR mill. This mill is currently being refurbished to treat ore from

the BC Vein mine being developed near Wells.

The mineral resource estimate is built upon nearly 500,000 meters of core from the 2015 to 20 19 drill

campaigns, and historically verified drill data using a total of 2,218 drill holes. A strong understanding of

the controls of mineralization enabled Osisko Royalties' technical team to construct a mineral resource

estimate constrained by lithology, alteration, structure and mineralization.

Cariboo Gold Project Mineral Resource Estimate at 2.1 g/t Au cut-off