The deal follows an October transaction that saw Osisko Metals acquire Karst Investments for US$8.5 million and two-million shares to snare an outstanding 3% NSR royalty on the project.
The company will grant Osisko Gold Royalties a right of first offer on any future sales of royalties, streams or interests on Pine Point and a senior secured interest and first-priority mortgage on the project as collateral.
Osisko Metals also said it was undertaking a non-brokered placement of C$7 million (US$5 million) of units, with each unit comprising one share and one quarter of a warrant. Osisko Gold Royalties will be able to exercise its rights for 36 months at a strike price for each whole warrant at a 25% premium to the 10-day volume weighted average price of the common shares as at the closing date of the offering, plus 50c.
Osisko Gold Royalties will be granted the right to maintain its relative equity holding through participation in future offerings as long as it maintains a 5% interest in Osisko Metals.
Osisko Metals said the proceeds would be used for exploration, to fund the Karst transaction, and for corporate purposes.
Osisko Gold Royalties currently holds a 10.5% interest in Osisko Metals, expected to increase to 19.8% on a fully diluted basis after closing.
Osisko Metals shares (TSXV:OM) have fallen more than 21% over the past 12 months and in the year to date at 41c, which capitalises the junior at $61.5 million.
