Osisko announces sale of Brucejack Offtake to Pretium

by Keith Powell
Aerial view of Brucejack Mine in northern BC.

— Photo courtesy Pretivm Exploration

Osisko Gold Royalties Ltd (“Osisko”) (OR: TSX & NYSE) announces today that Osisko Bermuda Limited (“OBL”), a wholly owned subsidiary of Osisko, has entered into an agreement with Pretium Exploration Inc., a subsidiary of Pretium Resources Inc. (collectively “Pretium”) in regards to the sale of OBL’s interest in the Brucejack gold offtake contract (the “Offtake Agreement”) for a cash purchase price of US$41.3 million (the “Purchase Price”) (the “Sale”).

Sean Roosen, Chair of the Board and CEO of Osisko stated: “The sale of Osisko’s offtake contract on the Brucejack mine will result in the elimination of a low margin offtake contract and allow better utilization of our working capital. Since acquiring the Orion portfolio in 2017, we now have received approximately US$164.3 million from Pretium, including proceeds from the buyback of the stream and sale of the offtake as well as cash margins to date from the offtake, compared to a book value of approximately US$147.3 million for our investment in Pretium.”

The Sale is expected to close on September 30th 2019 (the “Closing Date”). Pretium will make a payment of US$31.2 million to OBL on the Closing Date, with the remainder of the Purchase Price to be paid on November 30, 2019. Osisko expects to use the proceeds from the Sale to fund additional investments. As of the date hereof, OBL will no longer receive any deliveries under the Offtake Agreement. Since purchasing the Offtake Agreement in 2017, OBL has realized approximately US$4.5 million in cash margins1.

Under the Offtake Agreement, Pretium had an option on December 31st 2019 to repurchase up to 75% of OBL’s share of the Brucejack gold offtake by making a payment of US$13 per ounce of remaining contained gold under the contract.

Osisko’s 2019 guidance included 500 GEOs from the Brucejack offtake for the fourth quarter.

About Osisko Gold Royalties Ltd. 

Osisko Gold Royalties Ltd is an intermediate precious metal royalty company that holds a North American focused portfolio of over 135 royalties, streams and precious metal offtakes. Osisko's portfolio is anchored by its 5% NSR royalty on the Canadian Malartic Mine, which is the largest gold mine in Canada. Osisko also owns a portfolio of publicly held resource companies, including a 32.6% interest in Barkerville Gold Mines Ltd., a 16.4% interest in Osisko Mining Inc. and a 19.9% interest in Falco Resources Ltd.

Related articles

Milestone Project Site
Mining Insider, Mines, Saskatchewan Western Potash Corp executes Binding Offtake Agreement With ADM

ADM is a world leader in agricultural sourcing, processing and transportation

The Cariboo Gold Project.
Mining Insider, Mines, British Columbia Osisko Gold Royalties to acquire Barkerville Gold Mines

North Spirit Discovery is the next step in the evolution of Osisko's accelerator business that Osisko pioneered over the last five years

View all Mining Insider articles