TORONTO (miningweekly.com) – The TSX-V-listed stock of Barkerville Gold Mines has gained more than 23% in the past five business days, boosted by the endorsement of precious metals royalty company Osisko Gold Royalties, which last week completed a royalty financing and private placement with the Canadian explorer.

Barkerville’s stock gained 3% to C$0.33 apiece on Monday, reflecting investor recognition for its exploration work in the Cariboo mining district of central British Columbia.

Barkerville and Osisko on Friday announced that they had closed the second part of a private placement announced in November.

In addition to subscribing for 18.75-million flow-through shares at a price of C$0.32 apiece for gross proceeds of C$6-million in December, Osisko on Friday bought an additional 12.25-million flow-through shares at C$0.32 each, for total proceeds of C$4.24-million.

Osisko now held 47.63-million common shares of Barkerville and 4.69-million purchase warrants.

The companies also announced on Friday that they had closed the acquisition of a 1.5% net smelter return (NSR) royalty on the Cariboo gold project, for C$25-million in cash.

The companies would also negotiate a gold stream agreement after Barkerville completed a feasibility study on the Cariboo project. Following a 60-day negotiation period, if the companies failed to strike a gold stream accord, Barkerville would either grant a right to Osisko to buy an additional 0.75% NSR royalty for C$12.5-million, or make a payment of $12.5-million to Osisko.

Meanwhile, Osisko chairperson and CEO Sean Roosen was appointed director and co-chairperson of Barkerville, while Chris Lodder, currently a director of Barkerville, would serve as Osisko's second nominee to Barkerville's board of directors.

Lodder was appointed as president of Barkerville, and Luc Lessard was appointed as Barkerville's COO. Tom Obradovich would continue to serve as CEO of Barkerville.

The two companies had entered into a technical advisory agreement whereby Osisko would review data and provide technical advice to Barkerville during the exploration, development and construction of the project.

OSISKO

The Osisko team was credited with the development of the Canadian Malartic mine, in Quebec, which ranked as one of the country’s largest gold mines. Osisko Gold Royalties was spun out of parent Osisko Mining as part of a C$3.9-billion takeover deal by Agnico Eagle Mines and Yamana Gold.

The new company received some of Osisko Mining’s noncore assets, a 5% NSR royalty on the Canadian Malartic mine; a 2% NSR royalty on all existing exploration properties, including Kirkland Lake, Hammond Reef, and Pandora assets; C$155-million cash; all assets and liabilities of Osisko in the Guerrero camp; as well as certain other investments.

Test mining of the Bonanza Ledge openpit, located within Barkerville's 1 164 km² land package in the Barkerville gold mining camp near the town of Wells, in March last year recovered 91 489 t of ore that was milled through its nearby 900 t/d mill, producing 25 464 oz of gold.

Barkerville had completed a number of drilling and exploration programmes over the past 20 years and was currently compiling this data with all historical information to develop geological models that would assist new management and provide the framework to continue to explore the Cariboo project. An extensive drill programme was currently under way with the goal of delineating further high-grade gold mineralisation.

Meanwhile, Osisko also announced on Monday that it had accepted a letter of intent from Investissement Québec, under which subsidiary Ressources Québec planned to subscribe to a $50-million convertible debenture, which would mature in five years and bear a coupon of 4%, payable quarterly.

Ressources Québec would be entitled, at its option, to convert the debenture into Osisko common shares at a price of $19.08, at any time during the term of the debenture. Osisko would pay a 1% financing fee to Ressources Québec and would reimburse costs incurred regarding the financing.

Closing of the financing is expected to occur on or around February 15.

Also on Monday, Osisko launched a C$150-million bought deal with a syndicate of underwriters, which would buy 9.94-million units of Osisko at a price of C$15.10 each. Each unit would entitle the holder to acquire, for no additional charge, one common share of Osisko and one-half of a common share purchase warrant. For each whole warrant, the holder would be able to buy a common share at C$19.08 each, exercisable for 36 months from the date of closing.

Osisko had gained nearly 8% on the TSX during the past five business days.