Osisko Gold Royalties Ltd (TSX:OR) (NYSE:OR) is pleased to announce that it has entered into a royalty transfer agreement with Sailfish Royalty Corp. pursuant to which Osisko has agreed to purchase an up to 2.75% net smelter return royalty on the Tocantinzinho gold project operated by Eldorado Gold Corporation for cash consideration of US$10 million.
Tocantinzinho is a permitted and construction-ready, open-pit gold project located in Para State, Brazil. The project hosts NI 43-101 compliant mineral inventory of 39Mt grading 1.42g/t gold for 1.78Moz of gold in proven and probable reserves derived from, and inclusive of 46Mt grading 1.37g/t gold for 2.03Moz of gold in the measured and indicated resource categories and 0.6Mt grading 0.90g/t gold for 17Koz of gold in the inferred resource category.
A feasibility study on the project was completed by Eldorado in 2015 and an updated technical report was published by the company in 2019 which outlines an expected mine life of 10 years with annual gold production of 170Koz at an all-in sustaining cost of US$615 per ounce. The royalty covers all known reserves and resources of the planned Tocantinzinho project as well as its surrounding 28,275 hectare land package.
The operator of Tocantinzinho has a one-time buydown option in relation to the royalty. At the time of project construction the operator may make a payment of US$5.5 million to reduce the royalty percentage by 2% resulting in a royalty of 0.75%. Pursuant to a pre-existing agreement entered into by Sailfish, the buydown payment is payable to the original royalty owners.
Sandeep Singh, President and CEO of Osisko commented: “We are pleased to gain exposure to a large, construction-ready gold project with upside potential at depth as well as its surrounding land package in an area of Brazil that hosts a number of operating mines.”
The scientific and technical content of this news release has been reviewed and approved by Guy Desharnais, Ph.D., P.Geo., Vice President, Project Evaluation at Osisko Gold Royalties Ltd, who is a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
About Osisko Gold Royalties Ltd
Osisko is an intermediate precious metal royalty company focused on the Americas that commenced activities in June 2014. Osisko holds a North American focused portfolio of over 150 royalties, streams and precious metal offtakes. Osisko’s portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, which is the largest gold mine in Canada.
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We acknowledge the [financial] support of the Government of Canada.