Osisko Development Corp (TSXV: ODV) has secured a portion of the project funding required to get the Cariboo Gold project into production. The firm this morning indicated they have secured US$450 million in financing from Appian Capital Advisory to fund the development of the project.
The project funding is set to include an initial funding draw of US$100 million, which has already been completed, and is to be followed by subsequent draws of up to US$350 million in up to four tranches, which are available upon a final investment decision being made. Those subsequent draws are to be available over a 36 month period following the close of the initial draw.
Funds advanced under the financing facility will be due on July 21, 2033, or 8 years from closing. If no subsequent draws are made, the facility will mature in July 2028. The initial draw is to bear an interest rate equal to the 3 month SOFR, plus 9.50%, plus adjustment of 0.10% per annum, and is payable quarterly. For the first year, Osisko has the option to pay up to 100% of the accrued interest in cash or in kind.
WATCH: Osisko Development: The Revised Cariboo Feasibility Study
Following subsequent draws being made, the interest rate will step down to the 3 month SOFR plus 7.50%, plus adjustment of 0.10% per annum. Interest will then be payable quarterly in arrears in the form of cash. A total of 5.6 million warrants with an exercise price of $4.43 per share and an expiry of 3 years were also issued in connection with the facility.
Proceeds from the financing are expected to support a 13,000 metre infill drill campaign, fund pre-construction and construction activities at Cariboo, and repay an outstanding US$25 million term loan currently in place with National Bank.
“Having recently completed an updated feasibility study for the Project, the US$450 million facility represents a key financing commitment and allows us to maintain momentum towards a formal investment decision. The facility is structured to provide us with financial flexibility as we continue to push forward on pre-construction and construction activities and seek to fully fund the Project for construction,” commented Osisko CEO Sean Roosen.
Under a recently completed feasibility study, the Cariboo Gold project was identified as requiring C$881 million in initial capital under a revised mine plan.
Osisko Development last traded at $3.35 on the TSX Venture.
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