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Osisko Gold Royalties acquires Orion Mine Finance royalty portfolio

Osisko Gold Royalties is to acquire a precious metals portfolio of assets consisting of 74 royalties, streams and precious metal offtakes from Orion Mine Finance Group (Orion) for CAD1.125 billion.

The combination of Osisko and Orion’s portfolios will result in the Company holding a total of 131 royalties and streams, including 16 revenue-generating assets. The Company’s cornerstone asset remains the 5 per cent net smelter return (“NSR) royalty on the world class and long-life Canadian Malartic gold mine (Canada’s largest producing gold mine) and its 2 to 3.5 per cent NSR royalty on the world class Éléonore gold mine. Through the Transaction, the Company gains a 9.6 per cent diamond stream on the Renard diamond mine and a 4 per cent gold and silver stream on the Brucejack gold and silver mine, all of which are new high-quality mines in Canada, in addition to a 100 per cent silver stream on the substantial Mantos Blancos copper mine in Chile.

The Purchase Price paid to Orion will consist of: CAD675 million in cash consideration plus CAD450 million in Osisko common shares. As part of the Transaction, the Caisse de dépôt et placement du Québec (“la Caisse”) and the Fonds de solidarité FTQ (“Fonds”) will be subscribing for CAD200 and CAD75 million in common shares of Osisko, respectively, as part of a concurrent private placement (“Private Placement”) to fund a portion of the cash consideration and support the Transaction. Additionally, Osisko will draw CAD150 million under its revolving credit facility with the National Bank of Canada and Bank of Montreal, and CAD250 million will be funded from Osisko’s current cash reserves.

Sean Roosen, Chair and CEO of Osisko, says: “Since our creation three years ago, we have been working towards a transformational transaction for Osisko. We are delighted to announce our agreement with Orion Mine Finance today, which will position Osisko as the leading growth story among senior precious metal royalty companies. This transaction adds wide diversity to our portfolio which already holds the world class Canadian Malartic and Éléonore mine royalties as anchor assets, but will now include significant new assets including the Renard diamond stream in Québec, Canada, a gold and silver stream on the recently commissioned high-grade Brucejack mine in British Columbia, Canada and a silver stream on the substantial Mantos Blancos mine in Chile. Combining these tremendous assets from Orion Mine Finance together with Osisko’s existing portfolio will set the stage for the Company to earn over 140,000 GEOs annually by 2023, without compromising its focus on gold and precious metals from properties located principally in North America.”

Oskar Lewnowski, Founder and Chief Investment Officer of Orion, says: “As one of the largest investors dedicated to the mining industry, I am proud to say Orion has been able to build a uniquely top-tier, diversified royalty portfolio with a stellar cash flow growth profile. We are confident Osisko’s management team has the expertise to ensure that, when combined, our complementary asset bases ultimately deliver transformational results for shareholders and we are excited to participate in that upside.”

“With this additional investment, la Caisse is enabling Osisko, whose well known and experienced team has proven itself on the Canadian market, to expand its asset portfolio and better position itself on global markets,” says Christian Dubé, Executive Vice-President, Québec at Caisse de dépôt et placement du Québec. “This transaction is part of our commitment to remain a key player in the mining sector in Québec, supporting businesses at all stages in order to foster the development of tomorrow’s leading companies.”

Janie Béïque, Senior Vice-President, Natural Resources, Industries, Entertainment and Consumer Goods, of the Fonds, says, “Having first invested in the Osisko team in its early startup phase in 1999 when its market capitalisation was CAD1 million, the Fonds de solidarité FTQ is proud to reaffirm its commitment to supporting the Company’s growth. Today’s acquisition of high quality assets from Orion will further consolidate Osisko’s position as a Québec based world class royalty company.”

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