QUEBEC — Osisko Mining Corp. of Montreal has entered into a financing agreement with a wholly owned subsidiary of the CPP Investment Board (CPPIB) for up to $150 million to complete the development of the Canadian Malartic project and continue exploration at the South Barnat project.
Osisko can draw on the loan in two tranches of $75 million, the first on Oct. 31, 2009, and the second on March 31, 2010. Osisko has issued CPPIB 7 million warrants exercisable before Sept. 24, 2014, at a price of $10.75, which represents a 30% premium to the 15-day volume weighted average price. Proceeds are to be used on the development of the Canadian Malartic project.
The company may draw an amount up to $75 million in the second tranche for general corporate purposes. If the amount is drawn, CPPIB would receive an additional 5.5 million warrants having a five-year term at similar terms to those issued in connection with the first tranche.
The loan carries an interest rate of 7.5% per annum, and is secured against substantially all of the assets of the company. Drawdowns under the financing agreement are subject to the satisfaction of certain conditions precedent. Osisko has the right of first refusal in the event that CPPIB chooses to sell its warrants prior to exercise. Osisko may accelerate the exercise of the warrants if the shares of Osisko trade at a 50% premium to the exercise price for a period of 15 days.
The Canadian Malartic and South Barnat projects are discussed in detail at www.Osisko.com.