Mr. Grant Moenting reports

OSISKO ANNOUNCES CLOSING OF CSA STREAM TRANSACTIONS

Osisko Gold Royalties Ltd.'s wholly owned subsidiary, Osisko Bermuda Ltd. (OBL), has closed the previously announced silver purchase agreement and copper purchase agreement with Metals Acquisition Ltd. (MAC) concurrently with the closing of the acquisition by MAC of the producing CSA mine in New South Wales, Australia, from a subsidiary of Glencore PLC. The closing date of the metals stream and acquisition transaction was June 15, 2023.

Transaction highlights:

• Immediately enhances Osisko's cash flow:
  • Starting with an effective date of Feb. 1, 2023, OBL will purchase refined silver equal to 100 per cent of payable silver for the life of the mine. Between 2023 and 2025, MAC estimates annual payable silver production from the mine to average approximately 428,000 ounces;
  • Beginning on the first anniversary of the closing date, OBL will purchase refined copper equal to between 3 per cent and 4.875 per cent of payable copper until 33,000 metric tonnes of refined copper have been delivered, and 2.25 per cent thereafter for the remaining life of the mine. Between 2023 and 2025, MAC estimates annual payable copper production from the mine to average approximately 46,000 metric tonnes.
• Exposure to premium copper asset in a Tier 1 mining jurisdiction:
  • One of the highest-grade copper mines in Australia with a multidecade operating history of consistent production;
  • Record of reserve and resource replacement, with greater than 100 per cent of mined reserves having been replaced since 2011;
  • Recent investments of approximately $130-million (U.S.) support potential mine life extensions beyond 15 years.
• Near-term opportunities to extend mine life and enhance value:
  • Significant exploration potential from both near-mine and regional targets along a highly prospective geological trend;
  • Several areas identified to improve efficiencies, optimize operations and rationalize costs;
  • Significant resource and mine life upside by potentially lowering the cut-off grade.
• Experienced management team with record of creating value for stakeholders:
  • Proven Australian mining professionals with extensive mining experience and a record of value creation for stakeholders;
  • Partnership opportunities on future strategic activity, as well as a right of first refusal (ROFR) in favour of OBL on royalties or streams on any asset owned or acquired by MAC for a minimum of seven years following the closing date.

Metals streams details

Silver stream:

• OBL has made an upfront cash deposit to MAC of $75-million (U.S.).
• OBL will purchase an amount of refined silver equal to 100 per cent of the payable silver produced from CSA for the life of the mine and will make continuing payments for refined silver delivered equal to 4 per cent of the spot silver price at the time of delivery. Between 2023 and 2025, MAC estimates payable silver production from the mine to average approximately 428,000 oz per annum.

Copper stream:

• OBL has made an upfront cash deposit to MAC of $75-million (U.S.).
• OBL will purchase refined copper equal to the following amounts of payable copper produced from CSA:
  • From the closing date until the first anniversary of the closing date: nil;
  • From the first anniversary of the closing date to the fifth anniversary of the closing date: 3 per cent (first threshold stream);
  • From the fifth anniversary of the closing date until 33,000 metric tonnes of refined copper have been delivered to OBL: 4.875 per cent (second threshold stream);
  • Thereafter: 2.25 per cent for the remaining life of the mine (tail stream).

Between 2023 and 2025, MAC estimates payable copper production from the mine to average approximately 46,000 metric tonnes per annum:

• OBL will make continuing payments for refined copper delivered equal to 4 per cent of the spot copper price at the time of delivery.
• On the fifth anniversary of the closing date, MAC may elect to exercise one of two buydown options with respect to the copper stream:
  • Reduce the second threshold stream from 4.875 per cent to 3.25 per cent and the tail stream from 2.25 per cent to 1.50 per cent and reduce the threshold volume between the second threshold stream and the tail stream from 33,000 metric tonnes to 23,900 metric tonnes by paying a one-time cash payment to OBL of $40-million (U.S.);
  • Reduce the second threshold stream from 4.875 per cent to 4.0625 per cent and the tail stream from 2.25 per cent to 1.875 per cent and reduce the threshold volume between the second threshold stream and the tail stream from 33,000 metric tonnes to 28,450 metric tonnes by paying a one-time cash payment to OBL of $20-million (U.S.).

Other considerations:

• MAC has granted OBL an ROFR in respect of the sale, transfer or buyback of any royalty, stream or similar interest in the products mined or otherwise extracted from any property owned or acquired by MAC or an affiliate between the closing date and the later of (i) the seventh anniversary of the closing date and (ii) the date on which OBL or any affiliate ceases to hold or control more than 5 per cent of the issued and outstanding common shares of MAC.
• MAC and its subsidiaries will provide OBL with corporate guarantees and other security over their assets.
• In conjunction with the metals streams, OBL subscribed for $40-million (U.S.) in the equity of MAC.

CSA mine overview

CSA is a high-grade, long-life, underground copper-silver mine located approximately 12 kilometres west-northwest of the town of Cobar in New South Wales, Australia. The mine comprises several mining and exploration leases in a proven polymetallic base metals province. CSA was first discovered in the 1870s, and large-scale production commenced in the mid-1960s.

Since 2019, Glencore has invested approximately $130-million (U.S.) in infrastructure improvements to reduce costs and position the mine for future growth. Major projects included ventilation upgrades, shaft refurbishment, mill replacements, processing circuit optimization and construction of an on-site paste backfill plant. These infrastructure projects will support potential mine life extensions beyond 15 years.

CSA is located along a highly prospective geological trend that is known to host major deposits in the Cobar region. In recent years, near-mine exploration has led to the discovery of the QTS Central orebody and the QTS South Upper orebody and highlights the potential for additional high-value deposits close to existing infrastructure. Exploration success has led to mineral reserves increasing by approximately 83,000 tonnes of contained copper since 2011, despite cumulative production of over 540,000 tonnes of contained copper since that time. Drilling is continuing on multiple mineralized lodes. On the broader CSA land package, there has been limited historical drilling completed. Recent exploration focus has been on the implementation of high-resolution geophysical surveys and structural modelling to create a sustainable exploration model in support of future drilling campaigns.

CSA is the largest employer in the Cobar region and enjoys strong relationships with local stakeholders. The mine has a number of environmental programs in place to ensure best practices are followed and has committed to working toward reducing carbon emissions from operations through utilizing an electric mining fleet where possible and evaluating green energy alternatives.

Qualified person

The scientific and technical content of this news release has been reviewed and approved by Guy Desharnais, PhD, PGeo, vice-president, project evaluation, at Osisko Gold Royalties, who is a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

About Osisko Gold Royalties Ltd.

Osisko Gold Royalties is an intermediate precious metal royalty company which holds a North American-focused portfolio of over 180 royalties, streams and precious metal offtakes. Osisko's portfolio is anchored by its cornerstone asset, a 5-per-cent net smelter return royalty on the Canadian Malartic mine, one of Canada's largest gold mines.

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