Osisko Gold Royalties (TSX:OR)

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Osisko Gold Royalties (TSX:OR)

Post by Pixel8r »

An exciting announcement by Osisko Gold Royalties last week;

Osisko Announces Agreement to Acquire a Metals Stream on the High-Grade Trixie Mine in Utah’s Historic Tintic Mining District


MONTREAL, Jan. 25, 2022 (GLOBE NEWSWIRE) — Osisko Gold Royalties Ltd (the “Corporation” or “Osisko”) (OR: TSX & NYSE) is pleased to announce that its wholly-owned subsidiary, Osisko Bermuda Limited (“OBL”) has signed a non-binding term sheet with Osisko Utah LLC, a wholly-owned subsidiary of Osisko Development Corp. (collectively “ODV”) (ODV: TSX-V), with respect to a US$20-40 million metals stream (the “Stream”) to facilitate ODV’s acquisition of the high-grade Trixie Mine (the “Trixie Mine”), as well as mineral claims covering more than 17,000 acres in Central Utah’s historic Tintic Mining District (the “Tintic Property”). ODV announced today that it has agreed to acquire a 100% interest in the Trixie Mine and Tintic Property through the acquisition, directly and indirectly, of all of the shares in the capital of Tintic Consolidated Metals LLC (“Tintic”) from IG Tintic LLC and Ruby Hollow LLC (the “Acquisition Transaction”).

TINTIC HIGHLIGHTS

  • Trixie is one of the highest grade gold mines in the world
  • Exploration mining conducted in 2021 produced 14,709 ounces of gold at an average head grade of 59 g/t.
  • The newly-discovered ultra-high grade T2 structure adjacent to existing underground infrastructure has returned average grades of 93 g/t Au and 135 g/t Ag from more than 2,300 samples collected over a 215m strike length.
  • Proposed expansion and operational improvements
  • In the near term, ODV is proposing to complete technical work with the objective that it will justify further development at the Trixie Mine, targeting an increase in throughput to 500 tons per day by the end of 2024 which could increase production from approximately 20k ounces of gold per annum currently to approximately 100k ounces of gold per annum upon completion of the expansion.
  • Significant exploration upside at Trixie
  • Gold mineralization remains open up and down dip and along strike.
  • T2 structure shows excellent continuity of high grades and appears to be increasing in thickness towards the upper contact with shale.
  • Exploration outside of the T2 structure planned along the 5 km Trixie trend.
  • Exposure to extensive land package in prolific brownfields district
  • More than 17,000 acres of mining claims (including more than 14,200 acres of which are patented) in Utah’s second most productive mining district after Bingham Canyon.
  • T2 structure at Trixie represents a new style of mineralization and future exploration efforts will be focused on finding similar structures at other past producing mines in the district.
  • Other brownfields targets within the broader land package include the historic Burgin mine, Eureka Standard mine and North Lily prospects, as well as known polymetallic and copper porphyry targets.


STREAM DETAILS

  • Upfront Deposit: OBL will make an upfront cash payment to ODV totaling at least US$20 million and up to US$40 million (the “Deposit”). ODV may elect to draw the Deposit in full or in part upon closing of the Acquisition Transaction, with the proceeds to be used to fund the upfront consideration for the Acquisition Transaction.
  • Streamed Metal: Should ODV elect to draw the full Deposit amount, OBL will purchase 5.0% of all metals produced from the Project until 53,400 ounces of refined gold have been delivered (the “Threshold Stream”). Thereafter, OBL will purchase 4.0% of all metals produced from the Project for the remaining life of mine (the “Tail Stream”). The Threshold Stream and Tail Stream shall be reduced pro rata should ODV elect to draw less than the full Deposit amount.
  • Production Payments: OBL will make ongoing payments for refined metal delivered to the Stream equal to 25% of the spot prices on the day prior to the date of delivery.
  • Security: The Stream shall be a senior secured, first ranking obligation of ODV, inclusive of guarantees.
  • Area of Interest: The Stream shall be referenced to production from the entire Tintic Property, including the Trixie mine.
  • Closing: The Stream is expected to close concurrently with the closing of the Acquisition Transaction, subject to certain conditions precedent to closing, including, but not limited to, execution of all definitive agreements with respect to the Stream and the Acquisition Transaction.
"Money is Gold, and nothing else"
(As John Pierpont Morgan once stated under oath before the USCongress and the Pujo Commission in 1912)
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Re: Osisko Gold Royalties (TSX:OR)

Post by Pixel8r »

Osisko Gold Royalties: Too Cheap To Ignore

Summary
  • Osisko Gold Royalties is down 33% since March and 36% from its all-time highs despite a business that continues to report industry-leading margins, immune from the rise in energy prices.
  • This superior business model should command a premium multiple, yet this decline has left it at a producer-like valuation.
  • This sell-off has left the stock trading at less than 0.80x P/NAV, a producer-like valuation, despite the company having 90% plus margins and an inflation-resistant business model.
  • I see this correction in the stock as a gift and have continued to accumulate the stock on weakness, with what looks to be 100% long-term upside if its mining partners can execute successfully.
"Money is Gold, and nothing else"
(As John Pierpont Morgan once stated under oath before the USCongress and the Pujo Commission in 1912)
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