Osisko Metals Incorporated (TSX-V: OM) (OTCQX: OMZNF) (FRA: 0B51) is pleased to announce that it signed, on March 25 2022, a binding term sheet with Glencore Canada Corporation providing Osisko Metals with an option to acquire a 100% interest in the past-producing Gaspé Copper Mine located near Murdochville, Québec for an up-front payment of US$25 million, to be paid by Osisko Metals by way of a convertible note issued to Glencore upon the successful closing of the transaction, and a cash payment of US$20 million, payable upon start of commercial production. The Company must also incur drilling costs of C$5 million before June 30, 2022, to test oxidation levels within the mineralization that surrounds the historical Mount Copper open pit deposit.
Gaspé Copper Option Overview
Assuming exercise of the Option, the acquisition by Osisko Metals of Gaspé Copper could provide the following benefits to the Company:
Robert Wares, Chairman & CEO, commented: “Gaspé Copper was a significant copper producer in Eastern Canada for over forty years, and we believe in the potential to unlock value from this asset through drilling and re-evaluation of remaining resources. If our internal model is validated, we expect to close the transaction and release a maiden Inferred Mineral Resource estimate on the Mount Copper deposit this year.”
“The successful closing of this transaction will give Osisko Metals shareholders significant copper exposure and make Glencore a major shareholder of the Company. We welcome the new partnership with Glencore and look forward to other collaborative opportunities that the partnership may bring. In addition to the ongoing development of our Pine Point zinc-lead project, we are convinced that this combination of projects will cement Osisko Metals’ position as one of the premier base metal development companies in Canada. Our combined expertise will allow us to rapidly advance both projects and create shareholder value in safe jurisdictions with a celebrated mining history.”
The Option and acquisition by Osisko Metals of a 100% interest in Gaspé Copper remain subject to, among other things, the approval of (i) the TSX Venture Exchange, and (ii) the shareholders of Osisko Metals to authorize Glencore to become, upon and only upon conversion of the note, a “control person” of the Company.
History of Gaspé Copper Mines
From the initial discoveries in 1921, Gaspé Copper (formerly subsidiary of Noranda Inc.) mined the porphyry copper/skarn complex and produced copper concentrate continuously from 1955 until the closure of the mine in 1999. Production started with the Needle Mountain open pit then expanded to operating the Mount Copper open pit that was supplemented with feed from the extensive high-grade underground skarn mineralization (B and C Zone deposits) as well as the massive sulfide skarn and manto deposits of the underground E Zone.
During its mine life, a total of 150 million tonnes grading an average of 0.87% Cu with minor gold and silver credits was extracted (Hussey&Bernard, SME Journal, August 1998), making it one of the largest copper operations in Eastern Canada.
Location and Infrastructure
Gaspé Copper is located next to the community of Murdochville, in the Gaspé Peninsula of Eastern Quebec, approximately 825km east of Montreal. All necessary support infrastructure for the potential re-opening of Gaspé Copper is already in place. The former mine site benefits from paved road access with local highway 198 linking Murdochville with the coastal community of Gaspé. Green hydroelectric power with an electrical substation is located on-site.
Mr. Jeff Hussey, P. Geo., is the Qualified Person and President/COO for Osisko Metals Incorporated. He is responsible for the technical data reported in this news release and he is a Professional Geologist registered in Quebec.
About Osisko Metals
Osisko Metals Incorporated is a Canadian exploration and development company creating value in the base metal space. The Company controls one of Canada’s premier past-producing zinc mining camps, the Pine Point Project, located in the Northwest Territories for which the 2020 PEA has indicated an after-tax NPV of $500M and an IRR of 29.6%. The Pine Point Project PEA is based on current Mineral Resource Estimates that are amenable to open pit and shallow underground mining and consist of 12.9Mt grading 6.29% ZnEq of Indicated Mineral Resources and 37.6Mt grading 6.80% ZnEq of Inferred Mineral Resources. Please refer to the technical report entitled “Preliminary Economic Assessment, Pine Point Project, Hay River, Northwest Territories, Canada” dated July 30 2020, which has been filed on SEDAR. The Pine Point Project is located on the south shore of Great Slave Lake in the Northwest Territories, near infrastructure, paved highway access, and has an electrical substation as well as 100 kilometres of viable haulage roads already in place.
The current Mineral Resources mentioned in this press release conform to NI43-101 standards and were prepared by independent qualified persons, as defined by NI43-101 guidelines. The abovementioned Mineral Resources are not Mineral Reserves as they do not have demonstrated economic viability. The quantity and grade of the reported Inferred Mineral Resources are conceptual in nature and are estimated based on limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological grade and/or quality of continuity. Zinc equivalency percentages are calculated using metal prices, forecasted metal recoveries, concentrate grades, transport costs, smelter payable metals and charges (see respective technical reports for details).
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We acknowledge the [financial] support of the Government of Canada.