Osisko Metals raising $100 million for Quebec copper project
Osisko Metals Inc. [OM-TSXV, OMZNF-OTC] has expanded its leadership team and announced details of a $100 million as it accelerates its strategy of creating a leading critical metals company in North America.
John Burzynski will be appointed to the board of directors as executive chairman and will lead the company along with Robert Wares, who will continue as CEO and a director on the board. Don Njegovan and Blair Zaritsky will be appointed president and chief financial officer respectively.
Additionally, Luc Lessard, a director of the company since 2019, will step down from the board, while Anthony Glavac steps down as chief financial officer. Lessard will remain a technical adviser to the board.
Burzynski most recently served as chairman and CEO of Osisko Mines, where he led his team in the discovery, development and sale of the Windfall gold project to for $2.2 billion. Gold Fields Ltd. [GFI-NYSE, GFI-JSE].
Meanwhile, the company has struck a deal with an underwriting syndicate in connection which has pledged to purchase, subject to certain conditions, 288.46 million units of the company (HD units) at a price of 26 cents per unit, generating gross proceeds of $75 million. The underwriters have also agreed to purchase 50 million flow-through units (FT units) priced at 50 cents each for gross proceeds of $25 million. The amount generated from the issuance of the HD and FT units is expected to be $100 million*666, with proceeds earmarked for the advancement of Osisko’s Gaspe copper project to a construction decision and for general corporate purposes. Proceeds from the sale of the FT units will be used to incur eligible Canadian exploration expenses that qualify as flow-through mining expenditures (as defined by the Income Tax Act (Canada) related to the company’s projects in Quebec.
Each HD unit consists of one common share and one-half of one transferrable common share purchase warrant. Each FT unit consists of one common share and one-half of one warrant, each of which will qualify as a flow-through share within the meaning of the Income Tax Act (Canada) and the Taxation Act (Quebec). Each warrant will entitle the holder to purchase one common share at 35 cents per share for two years after the closing date, likely on December 10, 2024.
The underwriters have been granted an option to acquire up to an additional $15 million in any combination of HD units and FT units.
The company is currently focused on resource expansion at the Gaspe copper system, with current indicated mineral resources of 824 million tonnes of grade 0.34% copper equivalent (CuEq) and inferred resource of 670 million tonnes grading 0.38% CuEq.
Osisko Metals shares were unchanged at 29 cents and trade in a 52-week range of 29 cents and 14.5 cents.