Mr. John Burzynski reports
GOLD FIELDS TO ACQUIRE OSISKO MINING FOR C$2.16 BILLION
Osisko Mining Inc. has entered into a definitive arrangement agreement dated Aug. 12, 2024, pursuant to which Gold Fields Ltd., through a 100-per-cent-owned Canadian subsidiary, has agreed to acquire all of the issued and outstanding common shares of Osisko at a price of $4.90 per share in an all-cash transaction valued at approximately $2.16-billion on a fully diluted basis. The transaction will be completed by way of a statutory plan of arrangement under the Business
Corporations
Act (Ontario).
The consideration represents an approximate 55-per-cent premium to the 20-day volume-weighted average trading price per share on the Toronto Stock Exchange (TSX) for the period ending Aug. 9, 2024, being the last trading day prior to the announcement of the transaction.
Osisko's chairman and chief executive officer, John Burzynski, stated:
"This premium transaction represents a strong and near-term outcome for our shareholders and is reflective of the truly world-class nature of the Windfall project. In the span of nine years, we've transformed Windfall into one of the largest and highest-grade gold development projects globally, and this transaction
is a testament to the extraordinary entrepreneurial effort of the Osisko Mining team. Gold Fields is a globally diversified senior gold producer with an impressive track record of successfully building and operating mines. As our joint venture partner at Windfall, Gold Fields knows the asset well and understands the significance of the strong relationships that we have built in Quebec with all of our stakeholders. Moreover, Gold Fields shares our core principles of operating in a safe, inclusive and socially responsible manner. They are well suited to take Windfall into production, and we wish them all the best going forward."
Gold Fields' chief executive officer, Mike Fraser, stated:
"We are pleased to consolidate the remaining 50-per-cent interest of the advanced-stage Windfall project and its highly prospective exploration camp. Over the past two years, beginning with our initial due diligence in 2022 and throughout our joint ownership of the project, since May, 2023, with Osisko, we have developed a strong understanding of Windfall and its potential, and view it as the next long-life cornerstone asset in our portfolio.
"We are excited to build on the progress achieved to date at Windfall and look forward to continue working with the host Cree First Nation of Waswanipi, other local communities, the Quebec government, and Windfall employees and business partners as we advance this project, which I strongly believe will create shared, enduring value for Gold Fields and our people, community, business and government partners."
Benefits to Osisko shareholders:
-
All-cash offer that is not subject to a financing condition;
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Immediate and attractive premium for Osisko shareholders;
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Removes future dilution, commodity, construction and execution risk.
Board of directors recommendation
The board of directors of Osisko, having received a unanimous recommendation from a special committee solely comprising independent directors of Osisko and after receiving outside legal and financial advice, has unanimously determined that the transaction is in the best interests of Osisko and is fair to the shareholders of Osisko, and unanimously recommends that shareholders vote in favour of the transaction. In making their respective determinations, the board considered, among other factors, the oral fairness opinions of Maxit Capital LP and Canaccord Genuity Corp., and the special committee considered, among other factors, the oral fairness opinion of Fort Capital Partners. Each of the fairness opinions concluded that, as of Aug. 10, 2024, subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by the shareholders pursuant to the transaction is fair, from a financial point of view, to such shareholders. A copy of the fairness opinions will be included in the management information circular of the company to be mailed to the shareholders in connection with the special meeting of shareholders to be called to approve the transaction.
Transaction details
The transaction will be implemented by way of a statutory plan of arrangement under Section 182 of the Business Corporations Act (Ontario). The completion of the transaction is subject to customary conditions, including, among others, court approval, regulatory approvals, the approval of at least two-thirds of the votes cast by the shareholders present in person or represented by proxy at the meeting, and a simple majority of the votes cast by shareholders on a resolution approving the arrangement, excluding for this purpose the votes attached to the shares held by persons required to be excluded for purposes of Multilateral Instrument 61-101 -- Protection of Minority Security Holders
in
Special
Transactions.
In connection with the transaction, each of the directors and officers of Osisko has entered into a voting support agreement with the purchaser and Gold Fields, pursuant to which they have agreed, among other things, to vote all of their shares (including any shares issued upon the exercise of any securities convertible, exercisable or exchangeable into shares) in favour of the transaction.
The arrangement agreement provides for customary deal protection provisions, including non-solicitation covenants of Osisko and "fiduciary out" provisions in favour of Osisko. In addition, the arrangement agreement provides for a termination fee of $108-million payable by Osisko if it accepts a superior proposal and in certain other specified circumstances. Each of Osisko and the purchaser has made customary representations and warranties and covenants in the arrangement agreement, including covenants regarding the conduct of Osisko's business prior to the closing of the transaction.
Pursuant to the terms of the arrangement agreement, each outstanding option to purchase common shares in the capital of Osisko immediately prior to the effective time of the arrangement shall be, and shall be deemed to be, unconditionally vested and exercisable, and shall be deemed to be assigned and transferred by such holder to Osisko in exchange for a cash payment from Osisko equal to the company option in-the-money amount. Each such company option shall immediately be cancelled, and the holder shall cease to be a holder of such company option. Each deferred share unit and restricted share unit of Osisko granted under Osisko's equity incentive plans outstanding immediately prior to the effective time of the arrangement agreement shall be deemed to be settled by Osisko in exchange for a cash payment from Osisko pursuant to the terms of the arrangement agreement. The $154-million of 4.75 per cent convertible senior unsecured debenture due Dec. 1, 2025, will either be converted by the holder thereof for shares in advance of the closing of the transaction or repaid in accordance with its terms.
The common share purchase warrants of the company issued on Feb. 28, 2023, with an exercise price of $4 per share,
are scheduled to expire on Aug. 28, 2024. Any shares issuable upon the exercise of such warrants will be entitled to receive the consideration of $4.90 per share pursuant to the transaction.
Subject to the satisfaction of all conditions to closing set out in the arrangement agreement, it is anticipated that the transaction will be completed in the fourth quarter of 2024. Upon closing of the transaction, it is expected that the shares will be delisted from the TSX and that Osisko will cease to be a reporting issuer under applicable Canadian securities laws.
The foregoing summary is qualified in its entirety by the provisions of the respective documents. Copies of the fairness opinions of Maxit Capital, Canaccord Genuity and Fort Capital, and a description of the various factors considered by the special committee and the board in their respective determinations to approve the transaction, as well as other relevant background information, will be included in the information circular to be sent to the shareholders in advance of the meeting. Copies of the information circular, the arrangement agreement, the plan of arrangement, the voting support agreements and certain related documents will be filed with the applicable Canadian securities regulators and will be available in due course on SEDAR+ under Osisko's issuer profile.
Advisers
Maxit Capital and Canaccord Genuity are acting as financial advisers to Osisko. Bennett Jones LLP is acting as legal adviser to Osisko. Fort Capital is acting as financial adviser to the special committee. Cassels Brock & Blackwell LLP is acting as legal adviser to the special committee.
About Osisko Mining Inc.
Osisko is a mineral exploration company focused on the acquisition, exploration and development of precious metals properties in Canada. Osisko holds a 50-per-cent interest in the high-grade Windfall gold deposit, located between Val d'Or and Chibougamau in Quebec, and holds a 50-per-cent interest in a large area of claims in the surrounding Urban Barry area and nearby Quevillon area (over 2,300 square kilometres).
We seek Safe Harbor.
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