TORONTO – Osisko Gold Royalties of Montreal is making an investment worth US$65 million in Aquila Resources that owns the Back Forty gold-zinc development stage project in Michigan’s Upper Peninsula.
Drilling at the Back Forty gold-zinc project in Michigan’s Upper Peninsula. (Image: Aquila Resources)
Osisko has agreed to acquire approximately 49.2 million units of Aquila for a total of $10 million. Each unit consists of one common share and one-quarter of one share purchase warrant. Osisko can purchase additional Aquila shares for C$0.34 for a period of 42 months.
Osisko has also purchased a gold stream from the Back Forty mine for an upfront investment of US$55 million and ongoing payments equal to 30% of the spot gold price up to a maximum of US$600 per oz. Osisko will receive 18.5% of the refined gold from the project until 105,000 oz. of gold have been delivered and 9.25% of the output for the remaining life of the mine.
Osisko also has a streaming agreement on 75% of the silver produced at Back Forty. It was acquired in July 2017 through the purchase of the Orion Mine Finance portfolio.
Aquila completed a preliminary economic assessment of the Back Forty project in 2014 and has been granted three of the permits needed to operate the mine. A fourth permit is pending. Details of the PEA are posted at www.AquilaResources.com.