Osisko Metals Incorporated (TSXV: OM; OTCQX: OMZNF) has announced plans to complete a non-brokered private placement of approximately 67.7 million common shares at C$0.48 per share, for gross proceeds of about C$32.5m. The financing brings in a roster of high-profile strategic investors with exposure to copper and precious metals.
Under the terms outlined in the GlobeNewswire release, Hudbay Minerals Inc. is expected to subscribe for 29.17 million shares for proceeds of C$14m, while Agnico Eagle Mines Limited intends to take 26 million shares for C$12.48m through an existing participation right. Franco-Nevada Corporation is slated to invest C$2m for 4.17 million shares, alongside a further C$4m from a strategic institutional investor.
Following completion of the placement (before any additional issues linked to Glencore’s participation rights), Hudbay is expected to hold around 4.3% of Osisko Metals on a non-diluted basis, while Agnico Eagle’s interest is set to rise to roughly 12.5% on a partially diluted basis. The company and Hudbay also plan to enter an investor rights agreement that will provide Hudbay with top-up rights, future participation rights and, subject to ownership thresholds and other conditions, potential board representation.
Chief executive Robert Wares said, “We are pleased to welcome Hudbay Minerals as a new significant shareholder of Osisko Metals. We also appreciate the continued participation of Agnico Eagle and two of our existing principal and strategic shareholders. We view the participation in the private placement by these investors as support for the potential of the Gaspé Copper project and we look forward to continued support from these shareholders as we advance our project.”
Osisko Metals intends to use the net proceeds to advance its Gaspé Copper Project in Québec – including drilling, permitting and technical studies – and for general corporate purposes. Gaspé Copper is described as the largest undeveloped copper resource in eastern North America, with significant indicated and inferred resources and access to existing regional infrastructure, while the company also continues to advance the Pine Point Zinc Project in the Northwest Territories through a joint venture.
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