TORONTO (miningweekly.com) – Gold-focused royalty and stream company Osisko Gold Royalties on Tuesday said it had agreed to give Canadian explorer Highland Copper Company a C$10-million secured loan in exchange for, among other things, a 3% sliding-scale net smelter return (NSR) royalty on all metals produced from the White Pine North project to be acquired by Highland.
Under the transaction, Highland also granted Osisko an exclusive option to buy a 100% silver NSR royalty on all future silver output from Highland's White Pine North and Copperwood projects, located within the Upper Peninsula of Michigan.
The loan was being secured against all of Highland's assets until the earlier of such time that Highland had completed its purchase of the White Pine North project, or December 31, 2015.
As a result of the transaction, Osisko would have the right to nominate one director to Highland's board upon closing and the company would have the right to nominate one additional director to Highland’s board upon exercising the silver royalty option.
The Upper Peninsula of Michigan is well known for hosting significant economic concentrations of copper in stratabound deposits. These deposits were unique for their uniform copper grade distribution over several tens of square kilometres in sub-horizontal orebodies suitable for high-tonnage underground mining, with minimum environmental impact.
During its historical productive period from 1845 to 1977, the area produced more than 11-billion pounds of copper. It was one of the major copper mining districts in the US.
Osisko’s TSX-listed stock on Tuesday closed 1.72% higher at C$14.20 apiece, while Highland’s TSX-V-listed stock finished the day down 6.25% at C$0.275 a share.