10:34:35 EDT Sat 24 Oct 2020
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Osisko Gold Royalties Ltd
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Shares Issued 166,659,435
Close 2020-09-14 C$ 17.13
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Osisko Gold partner to restart Renard mine this month

2020-09-14 09:11 ET - News Release

Mr. Sean Roosen reports


Following a thorough review of operations and the establishment of a detailed restart plan, Osisko Gold Royalties Ltd. has confirmed that the Renard diamond mine, operated by Stornoway Diamonds Canada Inc., will be restarting operations in September, 2020.

The detailed plan, which was approved by Stornoway's directors and shareholders, includes cost reductions of over $30-million over the next 16 months of operations, with a projected impact of significantly reducing the all-in cost of production. Further to this cost reduction plan, the current shareholders of Stornoway have committed to reinvest up to $30-million (up to $7.5-million for Osisko) in a senior secured working capital facility. This additional commitment will provide the required financial flexibility for Stornoway to continue operating in a challenging diamond market. No initial drawdown is expected on the facility at this time, as Stornoway currently has $10-million in cash as well as approximately 332,000 unsold carats in inventory, which it expects to sell later in 2020.

The diamond market continues to be challenging; however, structural impediments to diamond sales are easing, and increased demand has improved observed pricing for specific goods.

Sean Roosen, chair and chief executive officer of Osisko, commented: "The Stornoway team has shown an ability to operate the Renard mine efficiently, and the near-term cost reductions will further help improve profitability. We feel there is significant value in the Renard mine, given the scarcity of diamond mines globally and the approximately $1-billion of well-built infrastructure. We look forward to our partners at Stornoway putting Renard back into production."

Osisko holds a 9.6-per-cent diamond stream on the Renard mine and also became a 35.1-per-cent shareholder following the creditors' bid transaction, which closed in November, 2019. As part of the new commitment, the shareholders and streamers have agreed to continue deferring payments on their respective instruments until April, 2022. Payments can be made prior to this date if the financial situation of Stornoway allows it.

About Osisko Gold Royalties Ltd.

Osisko Gold Royalties is an intermediate precious metal royalty company focused on the Americas that commenced activities in June, 2014. Osisko holds a North America-focused portfolio of over 135 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, which is the largest gold mine in Canada. Osisko also owns the Cariboo gold project in Canada as well as a portfolio of publicly held resource companies, including: a 14.7-per-cent interest in Osisko Mining Inc.; a 17.9-per-cent interest in Osisko Metals Inc.; and an 18.3-per-cent interest in Falco Resources Ltd.

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