Osisko Development Corp. (NYSE: ODV, TSXV: ODV)
("
Osisko Development" or the
"
Company") reports its financial and operating
results for the three months ended September 30, 2024 ("
Q3
2024").
Q3 2024 HIGHLIGHTS
Operating, Financial and Corporate
Updates:
- As at September
30, 2024, the Company had approximately $40.8 million in cash and
cash equivalents. An amount of approximately $67.7 million (US$50.0
million) was fully drawn as at September 30, 2024 under the delayed
draw term loan with National Bank of Canada maturing October 31,
2025.
- Following the
completion of the non-brokered private placement on October 14,
2024 (see Subsequent to Q3 2024) and pursuant to the credit
facility agreement, the Company completed a mandatory prepayment of
US$4.6 million on October 29, 2024.
- 47 ounces of
gold sold by the Company from operating activities in the third
quarter from the Cariboo Gold Project ("Cariboo Gold
Project") by processing stockpiles at a third-party
facility.
- $0.2 million in
revenues ($10.4 million in Q3 2023) and $0.1 million in cost of
sales ($10.1 million in Q3 2023) generated from operating
activities.
- Effective July
4, 2024, as part of its annual compensation review, the Board of
Directors approved the grant of an aggregate of 2,797,400 incentive
stock options and an aggregate of 371,800 restricted share units to
certain senior officers of the Company in accordance with the terms
of the Company's Option and RSU plans.
Cariboo Gold Project – British Columbia,
Canada (100%-owned)
-
Permitting Progress. Receipt of the EA Certificate
in October 2023 successfully concluded the EA process for the
Cariboo Gold Project (see Figure 1).
- The BC Mines Act
permit has been referred for decision to the statutory decision
maker in the BC Ministry of Energy, Mines and Low Carbon
Innovation. The review of the Environmental Management Act permits
has been completed, as well, and the Company is awaiting referral
thereof to the statutory decision maker in the immediate future.
The Company anticipates receiving final decisions in Q4 2024.
- On November 7,
2024, the Company announced that while it had yet to reach an
agreement with the Xatśūll First Nation, it would continue to
engage and consult with Xatśūll First Nation, including after any
decision on the permits.
- The Company
continues to explore project funding options, including
fully-funded solutions for the Cariboo Gold Project.
-
Pre-Construction Activities. During Q1 2024, under
an existing provincial permit, the Company commenced an underground
development drift from the existing Cow Portal into the Cariboo
Gold Project's mineral deposit at the Lowhee Zone. The objective of
the bulk sample work program is to reach the ore body and extract a
10,000 tonne bulk sample of mineralized material for ore sorter,
heavy equipment and mining testing.
- To date,
approximately 1,050 meters of development has been completed or
approximately 90%, with another 122 meters remaining to reach the
target area.
- The Company
anticipates completing the bulk sample program and the results
thereof in Q1 2025.
-
Optimized Feasibility Study. The Company is
advancing work on an optimized feasibility study
("OFS") for the Cariboo Gold Project, which is
anticipated to be completed in Q2 2025. The scope of the OFS will
take into account and include, among other things, certain mining
and processing flowsheet optimizations including an accelerated
development timeline to 4,900 tonnes per day throughput, updated
metal price and foreign exchange assumptions, and updated operating
and capital cost estimates to reflect the current environment. The
OFS will follow the framework set out in the existing ongoing
permitting process.
Figure
1: Cariboo Gold Project – Permitting Timeline Summary
- Wildfire
Response. On July 22, 2024, the Company temporarily paused
non-essential activities at its Cariboo Gold Project following a
wildfire evacuation order that included the Project. The wildfire
evacuation order was lifted on July 25, 2024, and normal course
operations and site activities at the Cariboo Gold Project resumed
on July 26, 2024. The mine site infrastructure was unaffected by
the wildfires.
Tintic Project – Utah, U.S.A.
(100%-owned)
- Porphyry
Target Drilling. Two surface diamond drill holes totalling
approximately 2,920 meters ("m") (9,581 feet
("ft")) have been completed at the Big Hill target
area testing for copper-gold-molybdenum porphyry mineralization
potential. One diamond drill hole was completed from underground
testing porphyry-style mineralization down plunge of the
mineralized structures below Trixie to a depth of 759.6 m (2,492
ft) (Trixie West). Based on the geological information from these
drill holes, the Company has identified several high-priority
targets for the next phase of the porphyry exploration program,
including:
- Big Hill
West Porphyry Target. The results of the recent and
historical drill holes suggest that the early and potentially
better mineralized intrusive phase could be in an untested area
immediately west and southwest of the area drilled at Big
Hill.
- Zuma
High-Potential Porphyry Target. The Zuma area has been
identified as a good porphyry target that merits initial drill
testing and may represent one of the causative porphyry centres of
the East Tintic district.
- Lower
Quartzite CRD Target. Based on the compilation of
geological, drilling, and historical data, a potential large scale
carbonate replacement deposit ("CRD") may be
located below the footwall of the East Tintic thrust fault. A
recommended drill program has been proposed that targets downdip
extensions of known mineralization at Burgin.
- As part of a
Phase II regional drilling program, the Company intends to proceed
with two drill holes on the Big Hill West and Zuma porphyry targets
in the coming months.
San Antonio Gold Project – Sonora State,
Mexico (100%-owned)
- The San Antonio
Gold Project has been under care and maintenance since Q3
2023.
- The Company
awaits next steps from the government of Mexico with respect to the
permitting process and the status of open pit mining in the
country.
-
Strategic Review. The Company is conducting a
strategic review of the project and has engaged a financial advisor
in connection thereof. The strategic review includes, among others,
exploring the potential for a financial or strategic partner in the
asset or for a full or partial sale of the asset.
SUBSEQUENT TO Q3 2024
- The Company
completed a non-brokered private placement of units pursuant to
which the Company issued an aggregate of 19,163,410 units at a
price of US$1.80 per unit for gross proceeds of approximately
US$34.5 million, comprising (i) 13,426,589 units at a price of
US$1.80 per unit for gross proceeds of approximately US$24.2
million, which closed on October 1, 2024 and (ii) 5,736,821 units
at a price of US$1.80 per unit for gross proceeds of approximately
US$10.3 million, which closed on October 11, 2024. Each unit
consists of one common share of the Company and one common share
purchase warrants of the Company entitling the holder of each
common share purchase warrant to purchase one additional common
share at a price of US$3.00 on or prior to October 1, 2029.
- On November 12,
2024, the Company completed a brokered private placement pursuant
to which the Company issued an aggregate of 31,946,366 units of the
Company at a price of US$1.80 per unit for aggregate gross proceeds
of approximately US$57.5 million, including the exercise in full of
the option granted to the agents of the private placement (the
"Offering"). Each unit consists of one common
share of the Company and one common share purchase warrant of the
Company entitling the holder thereof to purchase one additional
common share at a price of US$3.00 on or prior to October 1, 2029.
In connection with the brokered private placement, the agents were
paid a cash commission equal to 4.5% of the aggregate gross
proceeds.
- The Offering
included a lead order from Condire Investors, LLC
("Condire"), an investment firm based in Dallas,
Texas, resulting in an approximate 8.8% holding in the Company's
issued and outstanding common shares immediately following the
closing of the Offering (on a non-diluted basis). Concurrently with
the Offering, the Company and Condire have agreed to find a
mutually agreeable addition to the Company’s Board of Directors or,
alternatively, a Board observer.
KEY UPCOMING MILESTONES
Key Project Milestones |
|
Expected Timing of Completion |
|
Anticipated Remaining Costs* |
Cariboo Gold Project(1) |
|
|
|
|
Bulk Sample |
|
Q1 2025 |
|
$11.1 million |
Water and Waste Management |
|
Q4 2024 |
|
$5.6 million |
Electrical and Communication |
|
Q4 2024 |
|
$0.7 million |
Management, environmental, and other pre-permitting work |
|
Q4 2024 |
|
$2.4 million |
Permitting |
|
Completed – Q3 2024 |
|
$nil |
Tintic Project |
|
|
|
|
Regional Drilling – Phase II |
|
Q2 2025 |
|
$0.8 million |
*as at September 30, 2024
Notes:
(1) |
The expenditures disclosed in this table include amounts approved
by the Board of Directors up until the end of December 2024.
Additional expenditures will be required to complete certain of the
milestones and are subject to approval by the Board of
Directors. |
|
|
Consolidated Financial
Statements
The Company's unaudited interim consolidated
financial statements (the "Financial Statements")
and management's discussion and analysis
("MD&A") for the three months ended September
30, 2024 are available on the Company's website at
www.osiskodev.com, on SEDAR+ (www.sedarplus.ca) and on EDGAR
(www.sec.gov) under Osisko Development's issuer profile.
Qualified Persons
The scientific and technical information
contained in this news release has been reviewed and approved by
Daniel Downton P.Geo., Chief Resource Geologist of Osisko
Development, a "qualified person" within the meaning of National
Instrument 43-101 – Standards of Disclosure for Mineral Projects
("NI 43-101").
Technical Reports
Information relating to the Cariboo Gold Project
and the current feasibility on the Cariboo Gold Project and the
assumptions, qualifications and limitations thereof is supported by
the technical report titled "Feasibility Study for the Cariboo Gold
Project, District of Well, British Columbia, Canada", dated January
10, 2023 (amended January 12, 2023) with an effective date of
December 30, 2022 prepared for the Company by independent
representatives BBA Engineering Ltd. and supported by independent
consulting firms, including InnovExplo Inc., SRK Consulting
(Canada) Inc., Golder Associates Ltd. (amalgamated with WSP Canada
Inc. on January 1, 2023, to form WSP Canada Inc.), WSP USA Inc.,
Falkirk Environmental Consultants Ltd., Klohn Crippen Berger Ltd.,
KCC Geoconsulting Inc., and JDS Energy & Mining Inc. (the
"Cariboo Technical Report"). Reference should be
made to the full text of the Cariboo Technical Report, which was
prepared in accordance with NI 43-101 and is available
electronically on SEDAR+ (www.sedarplus.ca) and on EDGAR
(www.sec.gov) under Osisko Development's issuer profile and on the
Company's website at www.osiskodev.com.
Information relating to the Tintic Project and
the current mineral resource estimate for the Trixie deposit (the
"2024 Trixie MRE") and the assumptions,
qualifications and limitations thereof, is supported by the
technical report titled "NI 43-101 Technical Report, Mineral
Resource Estimate for the Trixie Deposit, Tintic Project, Utah,
United States of America" dated April 25, 2024 (with an effective
date of March 14, 2024), prepared for the Company by independent
representatives of Micon International Limited, being William
Lewis, P. Geo, and Alan J. San Martin, MAusIMM(CP) (the
"Tintic Technical Report"). Reference should be
made to the full text of the Tintic Technical Report, which was
prepared in accordance with NI 43-101 and is available
electronically on SEDAR+ (www.sedarplus.ca) and on EDGAR
(www.sec.gov) under Osisko Development's issuer profile and on the
Company's website at www.osiskodev.com.
Information relating to San Antonio is supported
by the technical report titled "NI 43-101 Technical Report for the
2022 Mineral Resource Estimate on the San Antonio Project, Sonora,
Mexico", dated July 12, 2022 (with an effective date of June 24,
2022) prepared for the Company by independent representatives of
Micon International Limited (the "San Antonio Technical
Report", collectively with the Tintic Technical Report and
Cariboo Technical Report, the "Technical
Reports"). Reference should be made to the full text of
the San Antonio Technical Report, which was prepared in accordance
with NI 43-101 and is available electronically on SEDAR+
(www.sedarplus.ca) and on EDGAR (www.sec.gov) under Osisko
Development's issuer profile and on the Company's website at
www.osiskodev.com.
ABOUT OSISKO
DEVELOPMENT CORP.
Osisko Development Corp. is a North American
gold development company focused on past-producing mining camps
located in mining friendly jurisdictions with district scale
potential. The Company's objective is to become an intermediate
gold producer by advancing its 100%-owned Cariboo Gold Project,
located in central B.C., Canada, the Tintic Project in the historic
East Tintic mining district in Utah, U.S.A., and the San Antonio
Gold Project in Sonora, Mexico. In addition to considerable
brownfield exploration potential of these properties, that benefit
from significant historical mining data, existing infrastructure
and access to skilled labour, the Company's project pipeline is
complemented by other prospective exploration properties. The
Company's strategy is to develop attractive, long-life, socially
and environmentally sustainable mining assets, while minimizing
exposure to development risk and growing mineral resources.
For further information, visit our website at
www.osiskodev.com or contact:
Sean Roosen |
Philip Rabenok |
Chairman and CEO |
Director, Investor Relations |
Email: sroosen@osiskodev.com |
Email: prabenok@osiskodev.com |
Tel: +1 (514) 940-0685 |
Tel: +1 (437) 423-3644 |
CAUTIONARY STATEMENTS
Cautionary Statement Regarding Estimates of
Mineral Resources
This news release uses the terms measured,
indicated and inferred mineral resources as a relative measure of
the level of confidence in the resource estimate. Readers are
cautioned that mineral resources are not mineral reserves and that
the economic viability of resources that are not mineral reserves
has not been demonstrated. The mineral resource estimate disclosed
in this news release may be materially affected by geology,
environmental, permitting, legal, title, socio-political, marketing
or other relevant issues. The mineral resource estimate is
classified in accordance with the Canadian Institute of Mining,
Metallurgy and Petroleum's "CIM Definition Standards on Mineral
Resources and Mineral Reserves" incorporated by reference into NI
43-101. Under NI 43-101, estimates of inferred mineral resources
may not form the basis of feasibility or pre-feasibility studies or
economic studies except for preliminary economic assessments.
Readers are cautioned not to assume that further work on the stated
resources will lead to mineral reserves that can be mined
economically.
Cautionary Statement Regarding Financing
Risks
The Company's development and exploration
activities are subject to financing risks. At the present time, the
Company has exploration and development assets which may generate
periodic revenues through test mining, but has no mines in the
commercial production stage that generate positive cash flows. The
Company cautions that test mining at its operations could be
suspended at any time. The Company's ability to explore for and
discover potential economic projects, and then to bring them into
production, is highly dependent upon its ability to raise equity
and debt capital in the financial markets. Any projects that the
Company develops will require significant capital expenditures. To
obtain such funds, the Company may sell additional securities
including, but not limited to, the Company's shares or some form of
convertible security, the effect of which may result in a
substantial dilution of the equity interests of the Company's
Shareholders. Alternatively, the Company may also sell a part of
its interest in an asset in order to raise capital. There is no
assurance that the Company will be able to raise the funds required
to continue its exploration programs and finance the development of
any potentially economic deposit that is identified on acceptable
terms or at all. The failure to obtain the necessary financing(s)
could have a material adverse effect on the Company's growth
strategy, results of operations, financial condition and project
scheduling.
Cautionary Statement Regarding Test Mining
Without Feasibility Study
The Company cautions that its prior decision to
commence small-scale underground mining activities and batch vat
leaching at the Trixie test mine was made without the benefit of a
feasibility study, or reported mineral resources or mineral
reserves, demonstrating economic and technical viability, and, as a
result there may be increased uncertainty of achieving any
particular level of recovery of material or the cost of such
recovery. The Company cautions that historically, such projects
have a much higher risk of economic and technical failure. Small
scale test-mining at Trixie was suspended in December 2022, resumed
in the second quarter of 2023, and suspended once again in December
2023. If and when small-scale test-mining recommences at Trixie,
there is no guarantee that production will continue as anticipated
or at all or that anticipated production costs will be achieved.
The failure to continue production may have a material adverse
impact on the Company's ability to generate revenue and cash flow
to fund operations. Failure to achieve the anticipated production
costs may have a material adverse impact on the Company's cash flow
and potential profitability. In continuing operations at Trixie
after closing, the Company has not based its decision to continue
such operations on a feasibility study, or reported mineral
resources or mineral reserves demonstrating economic and technical
viability.
Cautionary Statement to U.S. Investors
The Company is subject to the reporting
requirements of the applicable Canadian securities laws and as a
result reports information regarding mineral properties,
mineralization and estimates of mineral reserves and mineral
resources, including the information in its technical reports,
financial statements, MD&A and this news release, in accordance
with Canadian reporting requirements, which are governed by NI
43-101. As such, such information concerning mineral properties,
mineralization and estimates of mineral reserves and mineral
resources, including the information in its technical reports,
financial statements, MD&A and this news release, is not
comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements of the U.S.
Securities and Exchange Commission ("SEC").
CAUTION REGARDING FORWARD LOOKING
STATEMENTS
Certain statements contained in this news
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 Canadian securities legislation (together,
"forward-looking statements"). These forward-looking statements, by
their nature, require Osisko Development to make certain
assumptions and necessarily involve known and unknown risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in these forward-looking
statements. Forward-looking statements are not guarantees of
performance. Words such as "may", "will", "would", "could",
"expect", "believe", "plan", "anticipate", "intend", "estimate",
"continue", or the negative or comparable terminology, as well as
terms usually used in the future and the conditional, are intended
to identify forward-looking statements. Information contained in
forward-looking statements is based upon certain material
assumptions that were applied in drawing a conclusion or making a
forecast or projection, including the assumptions, qualifications
and limitations relating to the significance of the high-priority
target drilling; the utility of modern exploration techniques; the
potential for parallel high-grade gold fissure zones; the potential
of Tintic to host a copper-gold porphyry center; the significance
of regional exploration potential; the ability of the Company to
complete the OFS and the scope, results and timing of thereof;
progress in respect of pre-construction activities at Cariboo; the
potential for unknown mineralized structures to extend existing
zones of mineralization; category conversion; the timing and status
of permitting; the results of ongoing stakeholder engagement; the
capital resources available to Osisko Development; the ability of
the Company to execute its planned activities, including as a
result of its ability to seek additional funding or to reduce
planned expenditures; the ability of the Company to obtain future
financing and the terms of such financing; management's perceptions
of historical trends, current conditions and expected future
developments; the utility and significance of historic data,
including the significance of the district hosting past producing
mines; future mining activities; the potential of high grade gold
mineralization on Trixie and Cariboo; the results (if any) of
further exploration work to define and expand mineral resources;
the ability of exploration work (including drilling) to accurately
predict mineralization; the ability to generate additional drill
targets; the ability of management to understand the geology and
potential of the Company's properties; the ability of the Company
to expand mineral resources beyond current mineral resource
estimates; the timing and ability of the Company to complete
upgrades to the mining and mill infrastructure at Trixie (if at
all); continuation of test mining activities at Trixie (if at all);
the timing and ability of the Company to ramp up processing
capacity at Trixie (if at all); the ability of the Company to
complete its exploration and development objectives for its
projects in the timing contemplated and within expected costs (if
at all); the ongoing advancement of the deposits on the Company's
properties; the deposit remaining open for expansion at depth and
down plunge; the ability to realize upon any mineralization in a
manner that is economic; the Cariboo project design and ability and
timing to complete infrastructure at Cariboo (if at all); the
ability and timing for Cariboo to reach commercial production (if
at all); the ability to adapt to changes in gold prices, estimates
of costs, estimates of planned exploration and development
expenditures; the ability of the Company to obtain further capital
on reasonable terms; the profitability (if at all) of the Company's
operations; the Company being a well-positioned gold development
company in Canada, USA and Mexico; the ability and timing for the
permitting at San Antonio; the impact of permitting delays at San
Antonio; the outcome of the strategic review of the San Antonio
Project; sustainability and environmental impacts of operations at
the Company's properties; the ability and timing of the Company to
mutually agree with Condire to a board nominee or observer and
impact of same; as well as other considerations that are believed
to be appropriate in the circumstances, and any other information
herein that is not a historical fact may be "forward looking
information". Material assumptions also include, management's
perceptions of historical trends, the ability of exploration
(including drilling and chip sampling assays, and face sampling) to
accurately predict mineralization, budget constraints and access to
capital on terms acceptable to the Company, current conditions and
expected future developments, regulatory framework remaining
defined and understood, results of further exploration work to
define or expand any mineral resources, as well as other
considerations that are believed to be appropriate in the
circumstances. Osisko Development considers its assumptions to be
reasonable based on information currently available, but cautions
the reader that their assumptions regarding future events, many of
which are beyond the control of Osisko Development, may ultimately
prove to be incorrect since they are subject to risks and
uncertainties that affect Osisko Development and its business. Such
risks and uncertainties include, among others, risks relating to
capital market conditions and the Company's ability to access
capital on terms acceptable to the Company for the contemplated
exploration and development at the Company's properties; the
ability to continue current operations and exploration; regulatory
framework and presence of laws and regulations that may impose
restrictions on mining; the ability of exploration activities
(including drill results and chip sampling, and face sampling
results) to accurately predict mineralization; errors in
management's geological modelling; the ability to expand operations
or complete further exploration activities; the timing and ability
of the Company to obtain required approvals and permits; the
results of exploration activities; risks relating to exploration,
development and mining activities; the global economic climate;
metal and commodity prices; fluctuations in the currency markets;
dilution; environmental risks; and community, non-governmental and
governmental actions and the impact of stakeholder actions. Readers
are urged to consult the disclosure provided under the heading
"Risk Factors" in the Company's annual information form for the
year ended December 31, 2023 as well as the financial statements
and MD&A for the year ended December 31, 2023, which have been
filed on SEDAR+ (www.sedarplus.ca) under Osisko Development's
issuer profile and on the SEC's EDGAR website (www.sec.gov), for
further information regarding the risks and other factors facing
the Company, its business and operations. Although the Company's
believes the expectations conveyed by the forward-looking
statements are reasonable based on information available as of the
date hereof, no assurances can be given as to future results,
levels of activity and achievements. The Company disclaims any
obligation to update any forward-looking statements, whether as a
result of new information, future events or results or otherwise,
except as required by law. Forward-looking statements are not
guarantees of performance and there can be no assurance that these
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release. No stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein.
A photo accompanying this announcement is available
at: https://www.globenewswire.com/NewsRoom/AttachmentNg/f35949e1-e049-4178-b5c7-8fe0069c3fab
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