Osisko moves to fund Gaspe copper exploration
Osisko Metals Inc. [OM-TSXV, BWMXF-OTC] has released details of a $3 million proposed private placement offering and said proceeds will be used to finance exploration at the Gaspe property near Murdochville, Que., which includes the site of the past-producing Gaspe copper mine.
The company says Gaspe copper hosts the largest undeveloped copper resource in eastern North America, strategically located near existing infrastructure.
“We strongly believe this large-scale asset could become a core component of Quebec’s critical mineral development strategy that aims to provide essential metals for global decarbonization initiatives,’’ Osisko Chairman and CEO Robert Wares has said.
The proposed offering will consist of 7.5 million common shares that will qualify as flow-through shares under the Income Tax Act (Canada) and the Taxation Act (Quebec) at 40 cents per share. A syndicate of agents will have an option to raise additional proceeds of up to $500,000 via the sale of an additional 1.25 million flow-through shares at the offering price. That option can be exercised for up to 48 hours prior to the closing date, likely on July 12, 2023.
Details of the financing were announced after the close of trading on June 21, 2023 when Osisko shares closed at 24.5 cents. The shares are currently trading in a 52-week range of 39 cents and 17.5 cents.
Back in April, 2022, Osisko announced an initial inferred resource estimate for Mount Copper, a key part of the Gaspe Copper Project in Quebec.
Mount Copper is estimated to host an inferred resource of 456 million tonnes of 0.351% copper. At 1.41 million tonnes (3.1 billion pounds) of contained copper, that amounts to the largest untapped copper resource in eastern North America, Osisko said in a press release.
The estimate is pit-constrained to mineralization surrounding the past-producing Mount Copper open pit mine (Mount Copper Expansion Project). It is based on historical drilling completed between the 1960s and 2019.
The estimate was released just weeks after Osisko said it has signed a binding term sheet with Glencore Canada Corp. that gives it the right to earn a 100% interest in Gaspe Copper.
Gaspe Copper (formally a subsidiary of Noranda) mined a porphyry copper/skarn complex and produced copper concentrate continuously from 1955 until the mine closed in 1999. During that period, 150 million tonnes of average grade 0.87% copper, with minor, molybdenum, gold and silver credits were extracted initially from the Needle Mountain and Mount Copper open pits.
That material was supplemented with feed from the extensive high-grade underground skarn mineralization and the massive sulphide skarn and manto underground deposits.
The company recently said drilling in 2022 was successful in better defining and potentially expanding the in-pit resource at Mount Copper. It said drilling would resume this month in a bid to upgrade current resource estimates in preparation for an eventual feasibility study.