Osisko Mining (TSX: OSK) has entered into an agreement with Canaccord Genuity and Eight Capital as co-lead underwriters of a syndicate, which has agreed to purchase, on a bought-deal private placement basis, 41.1 million units of the company at $3.65 each for gross proceeds of $150 million.
Each unit consists of one share and half of a warrant. The underwriters will also have the option to purchase up to an additional 7.4 million units for potential proceeds of up to $27 million up to 48 hours prior to closing, which is expected around June 23. Net proceeds of the offering are intended for the company's mineral assets in Quebec, as well as for working capital and corporate purposes.
Osisko Mining's principal asset is its wholly owned Windfall Lake gold project, between Val-d'Or and Chibougamau. The company also holds over 2,700 sq. km of ground in the surrounding Urban Barry and Quevillon areas. In February, the company announced an updated resource for Windfall Lake, reporting indicated resources of 4.1 million tonnes at 9.1 grams gold per tonne with a further 14.5 million inferred tonnes at 8.4 grams gold for a total of 5.1 million oz. across all resource categories.
An underground bulk sample extracted from the project at the end of last year came in ahead of company expectations, with head grades averaging 17.8 grams gold.
This year, Osisko plans to drill 250,000 metres at Windfall, which will include both infill and expansion drilling as well as testing of regional targets.
At press time in Toronto, Osisko was trading at $3.73 per share within a 52-week range of $1.67 and $4.24. The company has about 291 million common shares outstanding giving it a $1.09 billion market capitalization.
- This article first appeared in the Canadian Mining Journal.