In a pivotal move, Osisko Development Corp (traded on the NYSE and TSXV as ODV) has finalized the sale of its wholly owned San Antonio Gold Project, located in the mineral-rich region of Sonora, Mexico. The agreement involves the transfer of all equity interests in Sapuchi Minera S. de R.L. de C.V., the entity holding the project, to Axo Copper Corp. This transaction underscores Osisko Development’s strategic focus while signaling a new chapter for the San Antonio site.
Upon completion of this deal, Osisko Development received 15,325,841 common shares of Axo, representing a 9.99% stake in the company. This equity stake positions Osisko as a significant player in Axo’s future developments.
Table of Contents:
Details of the transaction
The sale agreement incorporates additional financial incentives for Osisko Development, contingent on specific future events related to the San Antonio project. These deferred payments are structured to reward Osisko based on the project’s progress and financial performance.
Contingent payments outlined
Key elements of the deferred payments include:
- A cash refund amounting to70%of any Mexican value-added tax (VAT) refund owed toSapuchi Mexicofor periods prior to the transaction’s closing.
- Upon Axo’s public release of a feasibility study compliant withNational Instrument 43-101, Osisko will receiveUS$2,000,000in cash or the equivalent in Axo shares, subject to specific conditions regarding share pricing.
- A further cash payment ofUS$2,000,000will be issued upon the first gold pour at the project, marking a significant operational milestone.
This structured payment plan not only provides potential additional revenue streams for Osisko but also aligns their interests with the successful development of the San Antonio project.
Future implications for Osisko Development
Osisko Development’s decision to divest from the San Antonio project reflects its broader vision of becoming a leading intermediate gold producer. The company’s flagship project, the Cariboo Gold Project in British Columbia, remains central to its operational strategy.
Focus on core projects
With the successful sale of the San Antonio project, Osisko can now concentrate its resources and expertise on high-potential assets, including:
- The Cariboo Gold Project, which is fully permitted and boasts significant gold reserves.
- TheTintic Projectin Utah, a site with rich historical mining activity and considerable exploration potential.
By focusing on these core projects, Osisko Development aims to enhance its mineral inventory and optimize its capital allocation strategies.
The completion of the sale of the San Antonio Gold Project marks a significant milestone for Osisko Development Corp. This sale not only provides immediate financial benefits through share acquisition and potential future payouts but also allows the company to realign its focus on primary assets that promise higher returns and growth potential. As Osisko continues to develop its projects in mining-friendly jurisdictions, this transaction positions it well for future success.
For more information about Osisko Development, interested parties can visit their official website or reach out to their investor relations team.
