Osisko Metals sells additional sake in Pine Point Mining to Appian for C$8.3m

In a strategic move within the mining sector, Osisko Metals Incorporated has completed the sale of an additional 5% ownership interest in Pine Point Mining Limited (PPML) to a subsidiary of Appian Natural Resources Fund III LP, managed by London-based Appian Capital Advisory LLP. This transaction, valued at approximately C$8.33 million, marks a significant step in the development and financing of the Pine Point Project. The deal comprises an upfront cash payment of about C$6.66 million to Osisko Metals, with an estimated milestone payment of roughly C$1.67 million expected upon the achievement of a positive final investment decision (FID) related to the project.

Robert Wares, CEO and Chairman of Osisko Metals, commented on the transaction, stating, “The sale of the additional five percent interest in Pine Point to Appian will allow the Company to advance the Gaspé Copper project without resorting to an additional equity financing, which in the current market would be excessively dilutive. We thank Appian for their committed interest in the Pine Point Project and look forward to a continued productive joint venture.”

This transaction is part of a broader joint venture agreement formed between the Company and Appian on April 6, 2023. The agreement initially allowed Appian to earn up to a 60% ownership in PPML by meeting specific funding obligations. With the recent transaction, the target ownership interest by Appian in PPML has increased from 60% to 65%. This adjustment reflects a shared commitment to the project’s advancement and a strategic partnership aimed at leveraging each company’s strengths to optimize the Pine Point Project’s development.

The joint venture’s board composition has also been modified as part of this agreement, increasing Appian’s representation on the board. This change underscores the significance of the partnership and Appian’s role in the project’s future development.

The financial implications of this deal extend beyond the immediate transaction, with the milestone payment upon positive FID expected to bring Appian’s ownership in PPML to 65%, subject to the project’s budget and development progress. Maxit Capital LP and Bennett Jones LLP have acted as financial and legal advisors, respectively, to Osisko Metals in this transaction, ensuring a robust and strategic approach to this significant industry move.

This transaction not only reinforces Osisko Metals’ strategic financial management but also highlights the dynamic nature of partnerships in the mining industry, paving the way for future development and investment in significant projects like the Pine Point Mining Limited.