MONTREAL, Jan. 25, 2022 (GLOBE NEWSWIRE) -- Osisko Gold Royalties Ltd (the “Corporation” or “Osisko”) (OR: TSX & NYSE) is pleased to announce that its wholly-owned subsidiary, Osisko Bermuda Limited (“OBL”) has signed a non-binding term sheet with Osisko Utah LLC, a wholly-owned subsidiary of Osisko Development Corp. (collectively “ODV”) (ODV: TSX-V), with respect to a US$20-40 million metals stream (the “Stream”) to facilitate ODV’s acquisition of the high-grade Trixie Mine (the “Trixie Mine”), as well as mineral claims covering more than 17,000 acres in Central Utah’s historic Tintic Mining District (the “Tintic Property”). ODV announced today that it has agreed to acquire a 100% interest in the Trixie Mine and Tintic Property through the acquisition, directly and indirectly, of all of the shares in the capital of Tintic Consolidated Metals LLC (“Tintic”) from IG Tintic LLC and Ruby Hollow LLC (the “Acquisition Transaction”).
TINTIC HIGHLIGHTS
- Trixie is one of the highest grade gold mines in the world
- Exploration mining conducted in 2021 produced 14,709 ounces of gold at an average head grade of 59 g/t.
- The newly-discovered ultra-high grade T2 structure adjacent to existing underground infrastructure has returned average grades of 93 g/t Au and 135 g/t Ag from more than 2,300 samples collected over a 215m strike length.
- Proposed expansion and operational improvements
- In the near term, ODV is proposing to complete technical work with the objective that it will justify further development at the Trixie Mine, targeting an increase in throughput to 500 tons per day by the end of 2024 which could increase production from approximately 20k ounces of gold per annum currently to approximately 100k ounces of gold per annum upon completion of the expansion.
- Significant exploration upside at Trixie
- Gold mineralization remains open up and down dip and along strike.
- T2 structure shows excellent continuity of high grades and appears to be increasing in thickness towards the upper contact with shale.
- Exploration outside of the T2 structure planned along the 5 km Trixie trend.
- Exposure to extensive land package in prolific brownfields district
- More than 17,000 acres of mining claims (including more than 14,200 acres of which are patented) in Utah's second most productive mining district after Bingham Canyon.
- T2 structure at Trixie represents a new style of mineralization and future exploration efforts will be focused on finding similar structures at other past producing mines in the district.
- Other brownfields targets within the broader land package include the historic Burgin mine, Eureka Standard mine and North Lily prospects, as well as known polymetallic and copper porphyry targets.
STREAM DETAILS
- Upfront Deposit: OBL will make an upfront cash payment to ODV totaling at least US$20 million and up to US$40 million (the “Deposit”). ODV may elect to draw the Deposit in full or in part upon closing of the Acquisition Transaction, with the proceeds to be used to fund the upfront consideration for the Acquisition Transaction.
- Streamed Metal: Should ODV elect to draw the full Deposit amount, OBL will purchase 5.0% of all metals produced from the Project until 53,400 ounces of refined gold have been delivered (the “Threshold Stream”). Thereafter, OBL will purchase 4.0% of all metals produced from the Project for the remaining life of mine (the “Tail Stream”). The Threshold Stream and Tail Stream shall be reduced pro rata should ODV elect to draw less than the full Deposit amount.
- Production Payments: OBL will make ongoing payments for refined metal delivered to the Stream equal to 25% of the spot prices on the day prior to the date of delivery.
- Security: The Stream shall be a senior secured, first ranking obligation of ODV, inclusive of guarantees.
- Area of Interest: The Stream shall be referenced to production from the entire Tintic Property, including the Trixie mine.
- Closing: The Stream is expected to close concurrently with the closing of the Acquisition Transaction, subject to certain conditions precedent to closing, including, but not limited to, execution of all definitive agreements with respect to the Stream and the Acquisition Transaction.
ABOUT THE TRIXIE MINE
The Trixie Mine is past producing operation located in Central Utah’s historic Tintic Mining District. There are six levels of historic underground development accessed by a shaft to a depth of 412 meters (1,350 ft), as well as grid power, potable water and a permitted tailings facility on site.
In April 2021, exploration efforts at the Trixie Mine lead to the discovery of the ultra-high grade T2 structure approximately 625ft below surface and directly adjacent to existing underground infrastructure. Since then, over 2,300 underground face samples have been collected over a 215m strike length with an average grade of 93 g/t gold and 135 g/t silver (see Figure 1). T2 mineralization remains open up and down dip and along strike, and shows excellent continuity of high grades. A second phase of exploration is ongoing, including drilling east of the Trixie Mine along the T2 structure over a 1km strike length and to a depth of 300m.
Small scale exploration mining at Trixie recommenced in late 2020, and since mid-2021 operations have been focused within the T2 zone. In 2021, the Trixie Mine produced 14,709 ounces of gold at an average head grade of 59 g/t. More recently, throughput has averaged approximately 45 tons per day. Processing is currently done on site and at a toll facility using cyanide vat and heap leaching.
Upon closing of the Acquisition Transaction, ODV expects to undertake a 15,000 meter diamond drill program at Trixie and release an initial NI43-101 compliant Mineral Resource Estimate by year end. Concurrently, ODV plans to complete advanced technical studies aimed at increasing the throughput at Trixie to approximately 500 tpd by the end of 2024 through development of a surface decline to allow for mechanized mining as well as construction of a new processing plant. It is expected that Trixie could produce over 100k ounces of gold per annum upon completion of the expansion.
https://www.globenewswire.com/en/news-release/2022/01/25/2372501/0/en/Osisko-Announces-Agreement-to-Acquire-a-Metals-Stream-on-the-High-Grade-Trixie-Mine-in-Utah-s-Historic-Tintic-Mining-District.html