Osisko Gold cuts Cariboo borrowing margins as Appian clears technical hurdles on remaining $350m

Osisko Gold Group Inc. (NYSE: OGG; TSXV: OGG) has reduced the financing cost attached to its US$450 million Cariboo Gold Project credit facility while removing several technical conditions governing access to the remaining US$350 million, giving the fully permitted British Columbia development greater financial flexibility as it moves toward construction readiness. The amended agreement with funds advised by Appian Capital Advisory follows completion of the Lowhee infill drilling and ore-sorting programmes that formed part of the original financing conditions.

The facility was originally arranged in July 2025 through Osisko Gold’s wholly owned Barkerville Gold Mines subsidiary. An initial US$100 million was drawn at closing, leaving US$350 million available through a second tranche subject to technical, construction-readiness and other conditions. The first draw was intended to fund the Lowhee drilling programme, pre-construction work, repayment of an existing US$25 million term loan and general Cariboo working capital.

Appian has now accepted completion of key technical requirements covering the Lowhee Zone drilling and ore-sorting work, and those conditions have been removed. Access to the US$350 million has not become unconditional, however, because detailed engineering, procurement, updated project costs, scheduling and other construction-readiness requirements still need to be addressed.

How much cheaper is Osisko Gold’s amended $450m Cariboo facility?

Pricing on the initial US$100 million draw has been reduced from three-month SOFR plus 9.50% to SOFR plus 9.00%, while an additional 0.10% SOFR adjustment has also been eliminated. Holding the US$100 million principal constant, those two changes represent approximately 60 basis points of reduced annual financing cost, equivalent to roughly US$600,000 per year before considering changes in SOFR, compounding or other facility charges.

The second draw has also become cheaper. Its margin has fallen from SOFR plus 7.50% to SOFR plus 7.25%, a 25-basis-point reduction. If the entire US$350 million remaining tranche were eventually drawn, that change alone would reduce annual margin expense by approximately US$875,000 compared with the original pricing.

Taken together, the disclosed margin changes could reduce annualized financing costs by roughly US$1.48 million once the full US$450 million is outstanding, assuming the same principal amounts and before accounting for SOFR movements, amendment fees or other loan mechanics. The calculation illustrates that the revised economics are useful but not transformational relative to the overall scale of the project financing.

Osisko Gold has also secured another 12 months during which it can choose to settle accrued interest through payment in kind rather than entirely in cash. That feature can preserve liquidity during construction, although capitalized interest increases the outstanding debt balance rather than eliminating the financing cost.

What did the Lowhee drilling programme accomplish for Cariboo financing?

The 13,000-metre Lowhee infill programme was not merely an exploration campaign. It was explicitly connected with Appian’s project-financing requirements and intended to tighten geological confidence around areas expected to influence mine planning and stope design.

Osisko completed 13,684 metres of grid infill drilling across 142 holes, exceeding the nominal 13,000-metre programme. Reported results included high-grade intercepts, while the denser drill spacing created a larger dataset for resource modelling and underground planning.

The company also completed ore-sorting test work designed to evaluate whether mineralized material could be upgraded before conventional processing. Appian’s decision to remove conditions tied to both programmes is financially important because it means those technical workstreams no longer stand between Osisko Gold and the second draw.

That should not be interpreted as Appian having approved final construction expenditure or guaranteed access to the remaining funds. The lender still requires completion of construction-readiness conditions, leaving engineering, procurement and cost definition as important near-term gates.

How close is the Cariboo Gold Project to full construction financing?

Cariboo is already fully permitted and has a 2025 feasibility study outlining average annual production of approximately 190,000 ounces of gold over a 10-year mine life. The study estimated an after-tax net present value of C$943 million at a 5% discount rate and an after-tax internal rate of return of 22.1% using a US$2,400-per-ounce gold assumption. Those figures are feasibility-study estimates rather than realised operating results.

Osisko Gold has supplemented the Appian facility with other financing, including US$300 million of convertible senior notes completed in 2026. The company is therefore assembling multiple sources of capital rather than relying on the US$450 million project loan alone.

The August amendment narrows one category of financing risk because the geological and ore-sorting tests demanded by Appian have been satisfied. The remaining challenge increasingly shifts toward whether engineering, procurement, project costs and the construction schedule meet the lender’s requirements and whether Osisko Gold can advance Cariboo without materially changing the economics assumed in its feasibility work.

The distinction is important. Osisko Gold has not received the remaining US$350 million simply because technical conditions were removed, but a substantial part of the second-draw checklist is now behind it. With borrowing margins also reduced, Cariboo enters its next development stage with a somewhat cheaper financing package and fewer technical hurdles separating the project from construction capital.