Cariboo Gold Project reaches 28% completion as Osisko Gold accelerates infrastructure development

Osisko Gold Group Inc. has advanced construction of its Cariboo Gold Project in British Columbia to approximately 28% completion, with an estimated C$907 million in remaining construction costs as the company works toward its first gold pour in early 2029. The Canadian gold developer reported cumulative project expenditures of approximately C$355 million through September, including C$84 million incurred during August and September. Detailed engineering is now 42% complete, more than half of procurement packages have been awarded, and approximately C$360 million in project commitments have been secured. The latest update confirms that construction remains on schedule, although significant underground development, infrastructure installation and capital expenditure are still required before production can begin.

The announcement marks another stage in Osisko Gold’s transition from project development toward becoming a commercial gold producer. Following its formal construction decision in September, the company is accelerating work on underground access, water management facilities, site infrastructure and equipment procurement. For investors, the principal considerations are whether construction progress can be maintained, whether available financing will cover remaining obligations and whether the project’s economics remain attractive as development advances.

How Cariboo Gold Project construction reached 28% completion while major infrastructure work continues

Osisko Gold estimates that the Cariboo Gold Project was approximately 28% complete at the end of September, compared with 22% at the end of July. The measure is based on cumulative costs incurred relative to the project’s estimated total capital requirements, including pre-construction expenditures.

The company has incurred approximately C$355 million in project costs, including indirect expenses and owners’ costs. Around C$84 million was incurred during August and September, reflecting increased activity following the decision to proceed with full-scale construction.

The distinction between cost-based completion and physical construction progress is important. A project can incur substantial expenditure on engineering, equipment procurement and preparatory work before major structures are completed. Consequently, the 28% figure should not be interpreted as meaning that every construction component is more than one-quarter finished.

Osisko Gold reported progress across several important workstreams. Earthworks at the Valley Portal have reached approximately 85% completion, compared with just 1% previously, while site-wide earthworks advanced to 15% from 5%.

The Bonanza Ledge sediment control pond has reached full civil construction completion, and the first phase of its waste rock storage facility is approximately 95% complete. The expansion of the Bonanza Ledge water treatment plant has also completed construction, with final commissioning continuing.

These developments indicate that the company is progressing beyond preparatory activities toward the infrastructure required to support sustained underground mining. However, several major facilities remain in earlier stages of development, making execution over the next two years particularly important.

Why the remaining C$907 million construction budget makes financing and cost control central to Osisko Gold’s outlook

Osisko Gold estimates that approximately C$907 million remains to complete construction of the Cariboo Gold Project. The figure is calculated on an incurred-cost basis after accounting for expenditure already completed, anticipated equipment leasing and estimated pre-production revenue.

The remaining commitment is substantial relative to the company’s current development stage. It includes major expenditures associated with underground mining infrastructure, processing facilities, water management, electrical systems and construction services.

In September, the company estimated its remaining capital obligation at approximately C$990 million from August 1, 2026. The latest C$907 million estimate reflects subsequent spending and project progress rather than a new comprehensive feasibility study.

Capital discipline will be particularly important because large mining projects can face cost pressures associated with labour, equipment, materials and construction schedules. Even when a project remains on schedule, changes in procurement costs or engineering requirements can affect its final investment requirement.

Osisko Gold has sought to reduce uncertainty by securing long-lead equipment and awarding construction contracts before the most intensive development period. More than 50% of procurement packages have now been awarded, representing approximately C$360 million in commitments.

These commitments provide greater visibility into certain project costs, but they do not eliminate the possibility of overruns. Unawarded contracts, underground conditions and changes in construction productivity may still influence spending.

For investors, the key financial question is whether the company can complete construction within its estimated budget while maintaining sufficient liquidity. The remaining capital obligation will need to be evaluated alongside financing arrangements, available cash and future funding requirements.

How Osisko Gold’s US$600 million debt financing supports Cariboo construction but adds interest obligations

Osisko Gold strengthened its financing arrangements in September through a US$600 million offering of senior secured notes carrying an annual interest rate of 9.25%. The notes mature in 2031 and were issued to refinance an existing project financing facility and support development of the Cariboo Gold Project.

The transaction expanded the company’s access to long-term capital during a period of substantial construction expenditure. It also provided an opportunity to restructure financing obligations as the project moved into full-scale development.

However, debt financing introduces fixed financial commitments. At a 9.25% annual coupon, US$600 million in principal corresponds to approximately US$55.5 million in annual contractual interest before considering other financing arrangements or accounting adjustments.

These obligations matter because Cariboo is not yet generating commercial production revenue. Osisko Gold must therefore fund construction and financing requirements while the project remains in development.

The company previously reported approximately C$837 million in cash and cash equivalents at the end of June. That historical balance provides context for its financing position but does not represent current available cash following subsequent transactions and construction expenditures.

Osisko Gold has also arranged a strategic investment from an affiliate of Trafigura and identified potential additional financing opportunities. These arrangements may strengthen financial flexibility, although proposed facilities and contingent funding sources should not be treated as cash already available.

The company’s capital structure will become increasingly important as construction progresses. Investors will monitor debt servicing costs, liquidity and whether further financing is required before commercial production begins.

Why underground development and the Valley Portal remain critical to Cariboo’s production schedule

The Cariboo Gold Project is designed as an underground mining operation, making access development a central component of the construction schedule. Osisko Gold has completed approximately 3.4 kilometres of underground development, with work continuing through the existing Cow Portal into the Lowhee and Cow Mountain zones.

The company is also advancing the Valley access and ventilation portals, which are intended to provide additional underground development headings. These portals are expected to be completed during the fourth quarter of 2026.

Additional access points are important because they allow mining crews to work in different areas simultaneously. This can improve development efficiency and support the preparation of production zones ahead of commercial operations.

However, underground development has encountered challenges. Osisko Gold now expects monthly advance rates to reach approximately 360 metres by year-end, compared with its previous target of 500 metres.

The revised target reflects slower excavation at the Valley Portal due to competent rock conditions, the use of rockbreaking methods to reduce blasting noise and the need to manage concrete curing in sub-zero temperatures.

Although the company continues to maintain its overall production timetable, the reduction in its near-term development target highlights the operational risks associated with underground construction. Geological conditions and site-specific requirements can influence productivity even when broader project milestones remain unchanged.

Osisko Gold expects development rates to improve as additional headings become available through the Valley Portal. Achieving those improvements will be important for maintaining the planned sequence of underground access and production preparation.

How engineering progress and equipment procurement could reduce execution risks before the 2029 gold pour

Detailed engineering at Cariboo is approximately 42% complete, reflecting continued progress on the technical designs required for construction. The company has also awarded more than half of its procurement packages and secured principal long-lead equipment.

Engineering completion is important because detailed designs establish the specifications used for construction, equipment installation and cost estimation. Delays or significant design changes can affect procurement schedules and create additional expenditure.

The company’s progress varies across individual workstreams. Engineering for the transmission line and waste rock storage facility is complete, while the main water treatment plant design is approximately 92% complete.

Other components remain less advanced. Engineering for the process plant and site utilities is approximately 10% complete, indicating that substantial design work remains before those facilities can move through the full construction sequence.

Equipment procurement is also progressing. Osisko Gold expects approximately C$43 million in underground mobile equipment deliveries, including Caterpillar loaders and haul trucks, MacLean Engineering support vehicles and Epiroc drilling equipment.

Initial deliveries are expected in late 2026, with most equipment scheduled to arrive during 2027. Contractor-owned equipment will continue supporting underground development in the meantime.

Securing equipment early may reduce exposure to manufacturing lead times and supply chain disruptions. Nevertheless, delivery schedules, installation requirements and commissioning remain potential sources of risk.

The company’s ability to coordinate engineering, procurement and construction will influence whether Cariboo remains on schedule. Investors should monitor progress across these workstreams rather than relying exclusively on the overall completion percentage.

Why water management, environmental infrastructure and site access matter for Cariboo’s construction timeline

Water management infrastructure is an important requirement for underground mining operations because construction and production can involve significant volumes of water that must be collected, treated and managed appropriately.

Osisko Gold has completed construction of the Bonanza Ledge water treatment plant expansion, with final commissioning continuing. The company expects the facility to become fully operational during the fourth quarter.

Work is also advancing on the main water treatment plant at the Mine Site Complex. Excavation has been completed, and installation of reinforcement and concrete is underway.

These facilities are essential to supporting mine development while meeting applicable environmental requirements. Delays could affect the sequence of construction activities or the availability of infrastructure required for mining operations.

The company has also completed civil works for the Bonanza Ledge sediment control pond and advanced the first phase of its waste rock storage facility to approximately 95% completion. The storage facility is expected to begin receiving mine development material during the fourth quarter.

Site access represents another important workstream. Installation of the Willow River bridge has commenced, with the bridge expected to become operational before year-end. Once completed, the bridge is intended to serve as the project’s primary access route, improving material transportation and reducing traffic through the surrounding community.

These infrastructure investments may not directly generate revenue, but they are necessary for efficient construction and eventual mine operations. Their completion will help determine whether later development activities can proceed as planned.

How Cariboo’s projected gold production and operating costs support its long-term investment case

Osisko Gold’s updated project economics anticipate average annual gold production of approximately 190,000 ounces over an estimated ten-year mine life. Production is expected to average approximately 202,000 ounces annually during the first five years.

The project is designed to process approximately 4,900 tonnes of ore per day, with total payable gold production estimated at approximately 1.89 million ounces over its operating life. Under the company’s September economic update, projected all-in sustaining costs were approximately US$1,163 per ounce using a long-term gold price assumption of US$3,570 per ounce.

These figures suggest that the project could generate attractive operating margins if production targets, cost assumptions and gold prices are achieved. However, they remain projections based on technical and economic assumptions rather than demonstrated commercial performance.

The company estimated an after-tax net present value of approximately C$2.32 billion using a 5% discount rate under its long-term consensus gold price scenario. The corresponding internal rate of return was approximately 34.7%.

At a higher assumed gold price of US$4,350 per ounce, the projected net present value increased to approximately C$3.18 billion, illustrating the sensitivity of project economics to commodity prices.

These estimates are useful for understanding potential value, but they should not be interpreted as guaranteed financial outcomes. Actual returns will depend on construction costs, production performance, operating expenses, exchange rates and future gold prices.

The project remains exposed to the possibility that actual mining conditions differ from those anticipated in its feasibility work. Converting projected economics into realised cash flow will require successful construction, commissioning and sustained production.

Why gold price volatility could materially influence Cariboo’s future cash flow and valuation

Gold prices are a major determinant of the economics of development-stage mining projects. Higher prices can increase projected revenue and improve expected investment returns, while lower prices can reduce margins and make financing more challenging.

Cariboo’s economic sensitivity illustrates this relationship. The company’s September update presented materially different valuation outcomes under long-term consensus and higher spot-price assumptions.

However, project valuations depend on more than commodity prices. Mining recovery rates, operating costs, sustaining capital and the timing of production all influence cash generation.

Osisko Gold will also face currency exposure because substantial construction and operating costs are denominated in Canadian dollars, while gold is generally priced internationally in U.S. dollars.

A stronger Canadian dollar relative to the U.S. dollar could affect the relationship between revenue and local operating costs. Conversely, favourable currency movements may support project economics.

The company must therefore manage multiple sources of financial uncertainty during construction. Investors should avoid assuming that elevated gold prices alone will guarantee attractive returns.

The timing of commercial production is particularly important. Cariboo is not expected to begin producing gold commercially until the second half of 2029, leaving a substantial period during which market conditions may change. For shareholders, the project’s value will ultimately depend on the gold prices realised during production rather than those prevailing at the time of the construction update.

What Osisko Gold’s workforce expansion and construction milestones reveal about project execution

Osisko Gold reported that more than 400 personnel are currently active at the Cariboo site, reflecting the expansion of construction and development activities. A larger workforce supports simultaneous progress across underground development, earthworks, water management and infrastructure installation. It also increases the importance of coordination, safety procedures and effective contractor management.

The company reported a year-to-date total recordable injury frequency rate of 1.05 for 2026. Maintaining strong safety performance will be important as construction intensity increases and additional equipment is delivered.

The permanent camp expansion has been completed, providing accommodation capacity intended to support the growing workforce. Adequate site facilities are particularly important for projects located away from major urban centres.

Osisko Gold has also continued working with local communities and First Nations as construction advances. These relationships are relevant to the project’s operating environment and the successful implementation of long-term development plans.

The company expects the Valley access and ventilation portals to be completed during the fourth quarter, while the Willow River bridge is also scheduled to become operational before year-end.

These near-term milestones provide measurable indicators of progress. Meeting them would support the company’s broader development timetable, while delays could require adjustments to subsequent construction activities.

Investors should assess project execution through a combination of spending, engineering progress, physical construction and operational readiness. No single metric captures the full complexity of developing an underground gold mine.

What investors should monitor before Osisko Gold reaches commercial production in 2029

Osisko Gold continues to target its first gold pour during the first quarter of 2029, followed by commercial production in the second half of that year. The company has maintained this timetable despite revising its near-term underground development rate expectations.

The latest update demonstrates progress across engineering, procurement and site infrastructure, with overall completion increasing to approximately 28%. However, substantial construction remains, including major processing facilities, underground access and equipment installation.

Financing will remain a central consideration. The estimated C$907 million remaining construction requirement must be funded while the company manages debt obligations and ongoing development expenditure.

Investors will also monitor whether the project remains within its revised capital budget. Procurement commitments provide some cost visibility, but inflation, geological conditions and construction productivity could influence final expenditure.

The next major operational indicators include completion of the Valley portals, progress on underground development, commissioning of water treatment facilities and delivery of mobile mining equipment.

Engineering progress will also be important, particularly for the process plant and associated utilities. These systems must be completed and commissioned before the project can transition from construction into sustained production.

Cariboo offers Osisko Gold the potential to become a significant gold producer, supported by projected annual output of approximately 190,000 ounces. Nevertheless, the investment case remains dependent on successfully converting a large development project into an operating mine.

The October construction update provides evidence of continued execution, but it does not eliminate the financial and operational risks associated with the remaining development programme. The company’s ability to maintain its schedule, control spending and preserve liquidity will determine whether Cariboo delivers its projected long-term value.

Key takeaways on Osisko Gold’s Cariboo construction progress and remaining capital requirements

• Osisko Gold reported approximately 28% construction completion at its Cariboo Gold Project in British Columbia.
• Cumulative project expenditure reached approximately C$355 million through September 2026.
• The company estimates approximately C$907 million in remaining construction costs.
• Detailed engineering is 42% complete, with more than half of procurement packages awarded.
• Project commitments total approximately C$360 million, improving visibility into certain construction expenditures.
• Underground development has reached approximately 3.4 kilometres, with additional access portals under construction.
• Osisko Gold lowered its year-end underground development rate target to approximately 360 metres per month.
• The company continues targeting its first gold pour in early 2029 and commercial production later that year.
• Cariboo is projected to produce approximately 190,000 ounces of gold annually over a ten-year mine life.
• Investors will monitor construction spending, financing, underground development and progress toward production.