Osisko Development Corp. (NYSE: ODV, TSXV: ODV)
("
Osisko Development" or the
"
Company") reports its financial and operating
results for the three months ended June 30, 2024 ("
Q2
2024").
Q2 2024 HIGHLIGHTS
Operating, Financial and Corporate
Updates:
- 805 ounces of
gold sold by the Company from operating activities in the second
quarter, comprising of 790 ounces of gold sold from the Trixie test
mine ("Trixie"), and the balance from the Cariboo
Gold Project ("Cariboo Gold Project") by
processing stockpiles at a third-party facility.
- $2.6 million in
revenues ($10.8 million in Q2 2023) and $2.7 million in cost of
sales ($11.4 million in Q2 2023) generated from operating
activities.
- On May 9, 2024,
the Company announced, as part of its regular annual remuneration
program, the granting of an aggregate of 283,250 deferred share
units ("DSU") of the Company to its independent
directors in accordance with the DSU Plan of the Company
- On May 30, 2024,
Maggie Layman departed from her position as Vice President,
Exploration to pursue another opportunity.
- On June 3, 2024,
the Company announced that in connection with the terms of the
Company’s previously completed acquisition in May 2022 of a 100%
ownership interest in the Tintic Project, it had satisfied the
second of five deferred payments to the sellers. The deferred
consideration of US$2,500,000 was settled by the issuance of
1,228,394 common shares.
- On June 10, 2024, the Company entered into an amending
agreement to the credit agreement (the
"Amendment") with National Bank of Canada made as
of March 1, 2024, providing for a US$50 million delayed draw term
loan (the "Credit Facility"). The Amendment
provides for, among other things:
- An 8-month extension to the
maturity date to October 31, 2025 (from March 1, 2025). The
extension is subject to the completion of a capital raise of at
least US$20 million prior to October 31, 2024, otherwise the
maturity date reverts to February 28, 2025.
- Reduction in the mandatory
prepayment amount to 50% of each incremental dollar raised in
excess of US$25 million in respect of certain financings, allowing
the Company to preserve 50% of such proceeds. There are no
mandatory prepayment requirements for amounts up to US$25
million.
- As at June 30,
2024, the Company had approximately $33.7 million in cash.
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
and Environmental Management Act permits have been drafted, and are
currently under review by the Company and the Mine Review
Committee.
- The Company
anticipates completing its permit application referral and
receiving final construction and operating permits in Q3 2024.
- The Company
continues to explore funding options, including fully-funded
solutions for the Cariboo Gold Project.
Figure
1: Cariboo Gold Project – Permitting Timeline Summary
-
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 510 meters of development has been completed, with
another 660 meters remaining to reach the target area.
- The Company
anticipates completing the bulk sample in Q4 2024.
- 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, following the return of non-essential employees
to site. The mine site infrastructure was unaffected by the
wildfires.
Tintic Project – Utah, U.S.A.
(100%-owned)
- Big Hill
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 in May 2024 testing for copper-gold-molybdenum porphyry
mineralization potential.
- Both drill holes
intersected porphyry systems defined by at least three late-mineral
monzonite porphyritic intrusive phases and an intrusion
breccia.
- Although
anomalous copper and molybdenum mineralization was encountered,
including low visible presence of chalcopyrite, tennantite, and
molybdenite, no significant intercepts of copper, gold or
molybdenum were observed. The porphyries encountered to date are
considered to lack evidence for the major fluid paths required to
be the source of mineralization in the Tintic District.
- Big Hill
West 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.
- Trixie
West Porphyry Target Drilling. 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) when it crossed the Eureka Lily fault to the
east and out of the prospective alteration zone.
- These results
suggest that the western hanging wall block of the Eureka Lilly
fault (west of Trixie) is potentially more conducive for
porphyry-style mineralization.
- Anomalous
mineralization was encountered in the drill hole; however, no
significant intercepts of gold, copper or molybdenum were
encountered.
- Zuma
High-Potential Porphyry Target. Based on the results to
date, 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.
- Trixie
Underground Chip Sampling. The Company disclosed chip
sample assays from new development areas at Trixie. Select assay
highlights included (see news release dated August 7, 2024):
- 11.07 grams per
tonne ("g/t") gold ("Au") and
25.45 g/t silver ("Ag") over 6.10 m in CH01716
(0.32 troy ounces per short ton ("oz/t") Au and
0.74 oz/t Ag over 20 ft).
San Antonio Gold Project – Sonora State,
Mexico (100%-owned)
- The San Antonio
Gold Project remains in care and maintenance, with no production
anticipated henceforth.
- 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. The approval process for environmental permits for mining
may resume after the new president takes office in October
2024.
-
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 Q2 2024
- On July 5, 2024,
the Company announced that 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.
KEY UPCOMING MILESTONES
Key Project Milestones |
|
Expected Timing of Completion |
|
Anticipated Remaining Costs* |
Cariboo Gold
Project(1) |
|
|
|
|
Bulk Sample |
|
Q4 2024 |
|
$6.8 million |
Water and Waste
Management |
|
Q4 2024 |
|
$0.1 million |
Electrical and
Communication |
|
Q4 2024 |
|
$0.6 million |
Management, environmental, and
other pre-permitting work |
|
Q3 2024 |
|
$5.2 million |
Detailed engineering and
permitting(2) |
|
Q4 2024 |
|
$1.3 million |
Tintic
Project |
|
|
|
|
Regional Drilling |
|
Completed – Q2 2024 |
|
$nil |
_____________________________*as at June 30, 2024
Notes:
(1) |
The expenditures disclosed in this table include amounts approved
by the Board of Directors up until the end of August 2024.
Additional expenditures will be required to complete certain of the
milestones and are subject to approval by the Board of
Directors. |
(2) |
These activities are contributing towards the completion of
permitting, which are presently expected to be completed in Q3
2024. Additional costs and time relating to engineering, including
water and waste management and electrical and communication, will
be required in the construction phase (subject to a positive
construction decision and completion of project financing). |
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 June 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 Cariboo FS 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" and 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 results of the 2024 Trixie
MRE; the potential for unknown mineralized structures to extend
existing zones of mineralization; category conversion; the timing
and status of permitting; 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 2024 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; 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/ffaaf795-b59a-4cd5-a881-0fa040999ff6
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