TSX-V- and NYSE-listed Osisko Development has completed its previously announced acquisition of Tintic Consolidated Metal, which owns the producing Trixie test mine and mineral claims in central Utah.

“With the acquisition of Tintic we have inherited not only a highly prospective test mine in the Trixie project, but also a large, historic land package in one of the world’s premier mining jurisdictions,” said chairperson and CEO Sean Roosen.

Osisko Development’s near-term plan is to initiate underground and at-surface drilling, while it continues exploration development and processing of the mineralised material at the Trixie project.

Drilling is targeting support for preparation of an initial resource statement pursuant to National Instrument 43-101 over the next 12 months. Concurrently, the company will complete advanced technical studies on the project to generate additional surface and underground targets, conduct metallurgical testing, geotechnical work and environmental studies to justify further development as well as increase production through a low-capital expenditure expansion.

Under the terms of the transaction, Osisko Development will fund the acquisition through the issuance of 12 049 449 common shares in the capital of the company, aggregate cash payments of about $54-million, the issuance of an aggregate of 2% net smelter return royalties, with a 50% buyback right in favour of the company exercisable within five years, $12.5-million in deferred payments, and the granting of certain other contingent payments, rights and obligations.

The company also entered into a binding term sheet with Osisko Bermuda (OBL), a wholly owned subsidiary of Osisko Gold Royalties, for a stream on the metals produced from Tintic for a total cash consideration of $20-million.

Under the stream, the company will deliver to OBL 2.5% of all metals produced from Tintic at a purchase price of 25% of the relevant spot metal price. Once 27 150 oz of refined gold have been delivered, the stream rate will decrease to 2% of all metals produced.

Closing of the stream is expected to take place on or before July 31, 2022, and is subject to customary closing conditions, including receipt of applicable regulatory and stock exchange approvals. The proceeds from the stream will be used to advance the development of Tintic.