MONTREAL and QUEBEC CITY – Osisko Gold Royalties and Virginia Mines have entered into a definitive agreement to combine the two companies, creating a new intermediate royalty company with two Quebec assets. Osisko holds a 5.0% net smelter return on the Canadian Malartic gold mine, and Virginia has a sliding 2.2% to 3.5% NSR on the Éléonore gold mine.
Osisko says the arrangement represents a value of $14.19 per Virginia share, a 41% premium to Virginia’s closing price on Nov. 14, 2014. Virginia shareholders will receive 0.92 of an Osisko share for each Virginia share they hold.
The new company will do business as Osisko Gold Royalties Ltd. and have an estimated market capitalization of $1.3 billion. Headquarters will be in Montreal. The new enterprise will have a cash balance of about $270 million.
Osisko has already announced that it will begin a dividend program. The first quarterly dividend of $0.03 per common share will be paid on Jan. 15, 2015, to shareholders of record at the close of business on Dec. 31, 2014.
Osisko also announced last week a normal course issuer bid to be used for repurchase and cancellation of its shares over a 12-month period.
Learn more about Osisko and its plans at OsiskoGR.com.