Osisko Mining (TSX: OSK) is set to be bought out in a rare all-cash transaction, which values the company at $2.16 billion on a fully diluted basis, while placing its enterprise value at roughly $1.48 billion.
The transaction will see Gold Fields (NYSE: GFI), whom currently is a joint venture partner in Osisko’s Quebec-based Windfall Project, acquire the company for $4.90 per share, a 55% premium to Osisko’s 20-day volume weighted average price,. The purchase will consolidate Gold Fields’ ownership in the Windfall project, increasing its interest from 50% to 100%.
“We are pleased to consolidate the remaining 50% interest in Windfall and its highly prospective exploration camp. Deposits with the scale and quality of Windfall, with a highly prospective exploration camp on top of that, are extremely rare, let alone in a world-class jurisdiction like Québec, Canada,” commented Gold Fields CEO Mike Fraser.
For Gold Fields, a key feature of the transaction is that it will eliminate $75 million in exploration obligations and a $300 million deferred cash payment that was due on the project as per the 2023 joint venture agreement. The purchase will also allow the company to streamline decision-making and increase flexibility in terms of development of the project.
Windfall is expected to become one of the premier assets of Gold Fields’ portfolio, with a 2022 feasibility study outlining annual production of 300,000 ounces of gold at an AISC of US$758 per ounce over a ten year mine life.
The transaction is expected to be funded in part by a US$500 million new bank liquidity facility, as well as Gold Fields’ cash on hand of US$424 million and US$1.8 billion in undrawn debt facilities.
Shareholders of Osisko are expected to vote on the transaction in October 2024, and if approved, the purchase is expected to be finalized in the fourth quarter.
Osisko Mining last traded at $2.94 on the TSX.
Information for this briefing was found via Sedar and Osisko Mining. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
