Photo by: Reuters
TORONTO (miningweekly.com) – The TSX-V-listed stock of junior exploration firm NioGold Mining on Friday soared by as much as two-thirds after announcing a C$4.9-million private-placement financing with Osisko Gold Royalties.
Vancouver-based NioGold said Osisko would buy 14-million flow-through shares of NioGold at a price of $0.35 each.
After closing the transaction, Osisko would own 23.56-million NioGold shares, or 19.5%.
Osisko had also agreed to buy rights to repurchase a portion of the royalties on certain of NioGold's claims for C$150 000. Osisko would buy the right to repurchase Marban and Malartic Hygrade-NSM royalties.
Under these rights were the right to repurchase, for C$1-million, a 0.25% net smelter return (NSR) royalty on the Marban claims, a 0.5% NSR royalty on the First Canadian claims and a 1% NSR royalty on the Norlartic claims.
Osisko would also acquire the right to repurchase, for a further C$1-million, a 1% NSR royalty on the Malartic Hygrade-NSM claims.
Under terms of a definitive agreement still to be signed between the parties, NioGold would relocate its head office to Montreal, Quebec, and its five-seat board would be reconstituted to include two Osisko nominees, two NioGold nominees and one jointly determined nominee.
The transaction was subject to customary conditions, including Osisko completing its due diligence and regulatory approval from the TSX-V.
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.
NioGold’s flagship projects are located in the Cadillac-Malartic-Val-d'Or region of the prolific Abitibi gold-mining district, in Quebec. The Cadillac, Malartic and Val-d'Or mining camps have produced more than 45-million ounces of gold since the 1930s and presently comprise six producing gold mines, including Osisko Mining's new Canadian Malartic operations.
NioGold's land-holdings within the Abitibi presently cover 130 km2 and encompass four former gold producers, namely the Norlartic, Kierens (First Canadian), Marban and Malartic Hygrade mines that collectively produce 640 000 oz of gold.
NioGold’s TSX-V-listed stock closed up one-third at C$0.28 on Friday, having gained 23.53% since the start of the year. Osisko Gold Royalties’ TSX-listed stock rose 3.22%, up C$0.50 a share, to close at C$16.01 apiece.