Dual-listed Osisko Gold Royalties on Monday announced that it would buy TSX-V-listed Barkerville Gold Mines in a transaction that valued the owner of the Cariboo gold project, in British Columbia, at C$338-million, while also launching a new project development platform.

Osisko is offering each shareholder of Barkerville 0.0357 of its common shares for each share held, implying a consideration of C$0.58 a Barkerville share. The offer is a premium to Barkerville’s closing price of C$0.46 a share on Friday and a 44% premium based to its 20-day volume-weighted average price.

"The addition of the Cariboo gold project to our portfolio adds a potentially world-class asset in Canada in an impacted brownfield site with significant infrastructure in place,” said Osisko CEO and chairperson Sean Roosen.

He added that the company would fund planned work through available liquidity, future revenue from royalties and streams, project debt as well as outside private equity and joint venture (JV) capital through the creation of the North Spirit Discovery Group.

North Spirit Discovery is Osisko’s new project development platform and said to be the “next step” in the evolution of the organisation’s accelerator business.

Through this platform, Osisko would leverage its technical team with a track record of creating value through resource discovery, project development and mine operation. 

North Spirit Discovery aimed to become a leading resource development and finance company with the assistance of JV partners and/or private equity capital, Osisko said in a statement.

CARIBOO POTENTIAL
Barkerville last month published  preliminary economic assessment (PEA) for the 185 000 oz/y Cariboo project, which put forward a net present value of C$402-million, an aftertax internal rate of return of 28% and capital expenditure of C$306-million.

The PEA is based on only 50% of the current mineral resource estimate of Cariboo, which is located in historic Wells-Barkerville mining camp.

The PEA envisions mining up to 4 000 t/d using a long-hole mining approach, focused on extracting large panels with minimum widths of 3.7 m and minimum height of 30 m. The project should produce a high-quality concentrate averaging 20.5 g/t gold at the mine site and continued use of the upgraded Quesnel River mill for final processing.