Mr. Sandeep Singh reports
OSISKO GOLD ROYALTIES LTD LAUNCHES OSISKO DEVELOPMENT CORP. AND ANNOUNCES RELATED CORPORATE CHANGES
Osisko Gold Royalties Ltd. has launched Osisko Development Corp. -- a premier gold development company in North America with the objective of becoming the next mid-tier gold producer. The common shares of Osisko Development will begin trading on the TSX Venture Exchange on or about Dec. 2, 2020, under the symbol ODV.
Closing of reverse takeover transaction
Earlier today, Osisko Gold Royalties and Osisko Development completed their previously announced spinout transaction, which resulted in, among other things, Osisko Gold Royalties transferring certain mining properties, including the Cariboo gold project, and a portfolio of marketable securities (through the transfer of the entities that directly or indirectly own such mining properties and marketable securities) to Osisko Development Holdings Inc. (Osisko Subco), following which Osisko Subco and 1269598 B.C. Ltd. (Barolo Subco) amalgamated by way of a triangular amalgamation under the Business Corporations Act (British Columbia) to form Amalco. Upon the amalgamation, Osisko exchanged its Osisko Subco shares for ODV shares, which resulted in a reverse takeover of Osisko Development.
Further details regarding the RTO and the amalgamation are set out in: (i) the management information circular of Osisko Development (formerly known as Barolo Ventures Corp.) dated Oct. 19, 2020; and (ii) the Form 3D2 of Osisko Development dated Nov. 20, 2020, which are available on SEDAR under Osisko Development's issuer profile.
Conversion of subscription receipts
On Nov. 25, 2020, prior to the effective time of the amalgamation, upon satisfaction of the escrow release conditions, 13.35 million subscription receipts of Osisko Subco issued under the $100.1-million concurrent financing of Osisko Subco that closed on Oct. 29, 2020, were converted into 13.35 million common shares of Osisko Subco and 6,675,000 common share purchase warrants of Osisko Subco, and the net subscription proceeds were released from escrow and paid to Osisko Subco.
Each common share purchase warrant of Osisko Subco outstanding immediately prior to the effective time of the amalgamation was exchanged for one common share purchase warrant of Osisko Development, with each common share purchase warrant of Osisko Development entitling the holder to acquire one ODV share at a price of $10 per share for a period of 18 months from the effective date of the amalgamation.
Management and board reconstitution
Osisko Gold Royalties
Upon the closing of the RTO, Sandeep Singh became the president, chief executive officer and a director of Osisko Gold Royalties, and Sean Roosen was appointed as executive chair of the board of directors of Osisko Gold Royalties and transitioned from his role as chief executive officer of Osisko Gold Royalties to chief executive officer of Osisko Development.
Upon the closing of the RTO, the board of directors of Osisko Development was reconstituted to consist of: Mr. Roosen (chair); Charles Page (lead director); John Burzynski; Joanne Ferstman; Michele McCarthy; Duncan Middlemiss; and Eric Tremblay.
Upon the closing of the RTO, management of Osisko Development was reconstituted to consist of: Mr. Roosen (chair and chief executive officer); Chris Lodder (president); Luc Lessard (chief operating officer); Benoit Brunet (chief financial officer, vice-president of finance and corporate secretary); Francois Vezina (vice-president of technical services); Chris Pharness (vice-president of sustainable development); Maggie Layman (vice-president of exploration); and a further technical team that will be transferred from Osisko Gold Royalties to Osisko Development.
Other corporate updates
In connection with the completion of the RTO:
Amalco is expected to merge with Osisko Development by way of a voluntary dissolution on or about Nov. 26, 2020.
- Osisko Development is expected to continue from the Business Corporations Act (British Columbia) to the Canada Business Corporations Act on or about Nov. 27, 2020.
The directors of Osisko Development have resolved to change the financial year-end of Osisko Development from May 31 to Dec. 31, being that of the reverse takeover acquirer.
PricewaterhouseCoopers LLP has been appointed as the auditor of Osisko Development.
Required early warning report disclosure
Osisko Gold Royalties' ownership in Osisko Development
Following the completion of the amalgamation, Osisko Gold Royalties holds beneficial ownership and control over 100,000,100 ODV shares, representing approximately 88 per cent of the issued and outstanding ODV shares. Prior to the completion of the amalgamation, Osisko Gold Royalties did not hold any securities of Osisko Development. An early warning report will be filed by Osisko Gold Royalties in respect of Osisko Development with applicable Canadian securities regulatory authorities. To obtain a copy, please contact Mr. Singh.
Osisko Gold Royalties' ownership in certain portfolio companies
Pursuant to the RTO, Osisko Gold Royalties transferred a portfolio of marketable securities to Osisko Development, which included securities of reporting issuers in which Osisko Gold Royalties is a reporting insider (see an attached table).
Prior to the completion of the RTO, Osisko Development did not hold any securities of any of the above-referenced reporting issuers. Upon completion of the RTO, Osisko Gold Royalties continues to beneficially own the above-referenced securities by virtue of Osisko Gold Royalties being deemed under securities laws to beneficially own the securities that are beneficially owned or controlled by its affiliates, including Osisko Development.
In connection with the foregoing, early warning reports will be filed by each of Osisko Gold Royalties and Osisko Development with applicable Canadian securities regulatory authorities in respect of each of the above-referenced reporting issuers. Copies of the early warning reports filed by each of Osisko Gold Royalties and Osisko Development will be available on SEDAR under the respective issuer profiles of Osisko Gold Royalties and Osisko Development. To obtain copies of the early warning reports filed by Osisko Development, please contact Mr. Roosen. To obtain copies of the early warning reports filed by Osisko Gold Royalties, please contact Mr. Singh.
As of the date of this news release, Osisko Gold Royalties and Osisko Development are not aware of any plans, nor have any future intentions, that would relate to, or result in, any of items (a) to (k) described in Item 5 of Form 62-103F1, other than:
On Nov. 17, 2020, Osisko Gold Royalties and Falco Resources Ltd. entered into a binding agreement to extend the maturity of Falco's existing senior secured loan from Dec. 31, 2020, to Dec. 31, 2022. Together with capitalized interest, the principal amount outstanding under the senior loan as of Nov. 17, 2020, was $17,596,136. In consideration for the extension of the maturity date of the senior loan, the senior loan will also be amended to become convertible after the first anniversary of the closing date into common shares of Falco at a conversion price of 55 cents per share, subject to standard anti-dilution protections. In consideration for the senior loan extension, Falco will also issue to Osisko 10,664,324 warrants of Falco, with each warrant exercisable for one Falco share at an exercise price of 69 cents for up to 24 months from the date of issuance of the Falco warrants. The terms of the Falco warrants provide for a cashless exercise feature. The underlying Falco shares issuable upon conversion of the senior loan will be subject to a hold period of four months from the closing date of the senior loan extension, in accordance with applicable Canadian securities laws. The Falco warrants (and the underlying Falco shares) will be subject to a hold period of four months from the date of issuance of the Falco warrants, in accordance with applicable Canadian securities laws. The senior loan extension and the issuance of the Falco warrants are subject to the approval of the TSX-V. The senior loan extension is scheduled to close on or about Nov. 26, 2020.
- Following the completion of the RTO, Osisko Gold Royalties may amend or assign to Osisko Development certain contractual rights held in certain of the above-referenced reporting issuers in which Osisko Gold Royalties is a reporting insider.
Osisko Gold Royalties' head office is located at 1100 Avenue des Canadiens-de-Montreal, suite 300, Montreal, Que., Canada, H3B 2S2.
Bennett Jones LLP is legal counsel to Osisko Gold Royalties. Cassels Brock & Blackwell LLP is legal counsel to Barolo. Stikeman Elliott LLP is legal counsel to the underwriters of the concurrent financing.
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 Gold Royalties holds a North American-focused portfolio of over 135 royalties, streams and precious metal offtakes. Osisko Gold Royalties' 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.
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