JOHANNESBURG (miningweekly.com) – TSX- and NYSE-listed Osisko Gold Royalties has acquired its first silver stream, from Taseko Mines subsidiary Gibraltar Mines’ Gibraltar copper mine, in Canada, for $33-million in cash.
Osisko will make ongoing payments of $2.75/oz of silver delivered.
The Gibraltar mine produces a high-quality 28% copper concentrate, which contains a silver by-product, as well as molybdenum concentrate.
Taseko owns 75% of the mine, with a Japanese consortium owning the balance.
Under the terms of the deal, which is effective January 1, Osisko will acquire Taseko’s 75% share of payable silver production from the Gibraltar mine up to the delivery of 5.9-million ounces of silver. Thereafter, it will acquire 35% of Taseko’s share of payable silver production.
The acquisition immediately increases Osisko’s production and cash flow profile, with expected production of about 200 000 oz/y of silver for the next 14 years, increasing to about 350 000 oz/y for the remainder of the 23-year reserve life at the mine.
“Osisko is pleased to partner with Taseko on the Gibraltar mine to create our first silver stream. Our agreement with Taseko further strengthens and diversifies our Canadian portfolio with a long-life asset, with a proven operator, that will immediately be accretive to our portfolio of assets. This investment also provides Osisko shareholders with silver price optionality over multiple cycles, with potential exploration and expansion upside,” commented Osisko chairperson and CEO Sean Roosen.