TORONTO (miningweekly.com) – Gold hopeful Osisko Mining has signed an agreement in principle with Société générale de financement du Québec (SGF) for C$75-million in financing for the company's flagship Canadian Malartic gold project, in Quebec.

The financing will be structured as a senior nonguaranteed debenture, convertible at SGF's discretion into Osisko shares at a price of C$9,18 per share.

The transaction is subject to several conditions, including Osisko securing an additional C$225-million of financing, and receiving all the permits needed to develop the Malartic project.

"We are very happy to have such a strong financial partner from Quebec showing interest in the development of the Canadian Malartic project,” said Osisko CEO Sean Roosen.

The company said it continues to hold talks with “diverse” financial institutions and strategic partners, to raise the funds needed to develop the C$1-billion project.

In February this year, Osisko raised C$403-million in a bought-deal offering, making it one of the first junior miners to raise equity finance after markets froze up in the fourth quarter of 2008.

The company also raised C$10,64-million for exploration in a flow-through financing last month.

The firm also has 44,27-million warrants outstanding that will expire in November, and expects that the eventual exercise of these warrants would result in proceeds of an additional C$241-million dollars to the Osisko treasury.

The Malartic project has a proven and probable mineral reserve estimate of 6,28-million ounces, and, including the adjacent Barnat deposit, a measured and indicated resource of 3,65-million ounces and an inferred resource of 0,84-million ounces.

The operation is expected to produce an average of 591 000 oz/y of gold over over a ten-year mine life.

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