Osisko Metals closes $12.7 million financing deal

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Osisko Metals Inc. [OM-TSXV, BWMXF-OTC] has raised $12.7 million from a bought deal private placement of flow-through shares and units.

The company said gross proceeds will be used to incur eligible Canadian exploration expenses that are intended to qualify for the critical mineral exploration tax credit announced in the 2022 federal budget.

The private placement offering consisted of 4.6 million common shares that will qualify as flow through shares at an issue price of 50 cents per share, and 19.2 million units at an issue price of 54 cents per unit. The amount raised ($12.7 million) includes the partial exercise of an option granted to the underwriters who received 1.4 million compensation warrants, each of which entitles the holder to buy one common share for 54 cents for 24 months after closing.

Each flow-through unit consists of one common share and one half of a common share purchase warrant, each of which will qualify as a flow-through share. Each warrant entitles the holder to acquire one common share for 57 cents per warrant share for 60 months following the closing date.

Osisko Metals Chair and CEO Robert Wares subscribed for 330,000 flow-through shares under the offering, and now holds 37.7 million common shares, 1.3 million options and 1.25 million warrants, representing 16.7% of the issued and outstanding shares of the company.

On June 16, 2022, Osisko Metals shares closed at 39 cents and currently trade in a 52-week range of 69 cents and 35 cents.

Osisko Metals, which is affiliated with Osisko Gold Royalties Ltd. [OR-TSX, OR-NYSE], is a Canadian exploration and development company with a previous focus on zinc. Its asset portfolio includes Pine Point project in the Northwest Territories and the Bathurst Mining Camp properties in northern New Brunswick.

According to a 2020 preliminary economic assessment (PEA) the Pine Point project contains resources that are amenable to open pit and shallow underground development, consisting of an indicated resource of 12.9 million tonnes, grading 6.29% zinc equivalent. On top of that is an inferred resource of 37.6 million tonnes grading 6.80% zinc equivalent.

Pine Point is located on the south shore of Great Slave Lake in the Northwest Territories, near infrastructure and paved highway access, and has an electrical substation as well as 100 kilometres of viable haulage roads already in place.

Osisko Metals recently 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, Thursday.

The announcement came 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, which is located near Murdochville, Quebec.


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