Osisko Metals closes JV transaction with Appian

Apr 9, 2023

2023-04-06 13:07 ET – News Release

Mr. Robert Wares reports

OSISKO METALS ANNOUNCES SUCCESSFUL CLOSING OF PREVIOUSLY-ANNOUNCED JOINT VENTURE TRANSACTION WITH APPIAN

Osisko Metals Inc. has successfully closed its previously announced joint venture transaction with a subsidiary of Appian Natural Resources Fund III LP, which resulted in the formation of a joint venture for the advancement of Osisko Metals’ Pine Point project.

Robert Wares, chairman and chief executive officer of Osisko Metals, commented: “We are delighted to have successfully closed this transaction with Appian, and look forward to a mutually beneficial and collaborative partnership to rapidly advance the Pine Point project for our stakeholders. On behalf of the board of directors of Osisko Metals, we thank our shareholders, management, advisers and partners for their hard work and long-standing support.”

Michael Scherb, founder and CEO of Appian Capital Advisory LLP, commented: “The Pine Point project is a highly prospective and strategically located project and Appian is delighted to partner with Osisko Metals on its development. The work of the Osisko Metals team to date is a credit to themselves. Appian looks forward to a collaborative partnership with Osisko Metals, the Pine Point team, surrounding communities and stakeholders to advance the development of the Pine Point project.”

As part of the closing of the transaction:

Appian has purchased 20,153,164 common shares of Osisko Metals at a price of 24.81 cents per share for gross proceeds of $5-million.
Appian has purchased share capital of Pine Point Mining Ltd. (which holds the Pine Point project) (PPML) from Osisko Metals in exchange for a payment in the amount of $8.3-million.
Appian has subscribed for share capital of PPML in exchange for a payment to PPML in the amount of $13.1-million.
The interim loan made by Appian to Osisko Metals in the amount of $6.7-million has been converted for share capital in PPML.

After giving effect to the transaction, Osisko Metals and Appian now hold approximately 74.7 per cent and 25.3 per cent, respectively, of the share capital of Pine Point Mining (which holds a 100-per-cent interest in the Pine Point project).

Subsequent to the closing of the transaction, and until Appian has acquired an ownership interest of 60 per cent in PPML or until a final investment decision (FID) has been reached, all financing in respect of the Pine Point project will be made by way of cash calls issued by the board of PPML to Appian, the quantum and speed of which are determined at the sole discretion of the board of directors of PPML. Osisko Metals will not be required to make any cash contributions to PPML until Appian has reached the target ownership percentage, following which additional cash calls, if required, will be satisfied by each of Appian and Osisko Metals on a pro rata basis pursuant to approved annual programs and budgets as determined by the board of PPML.

Initially, the board of PPML will comprise Mr. Wares and Gordon Stothart, as nominees of Osisko Metals, and Adam Fisher and Geoff Cohen (chairman), as nominees of Appian, and management will include Jeff Hussey (chief executive officer) and Anthony Glavac (chief financial officer). There are no changes contemplated to the board of directors of Osisko Metals in connection with the transaction.

As part of closing of the transaction, the company and Appian entered into a joint venture company agreement and an investor rights agreement, in substantially the forms attached to the investment agreement dated Feb. 21, 2023, between the company and Appian in respect of the transaction, a copy of which is available on SEDAR under the company’s issuer profile.

See below for the biographies of the directors and officers of PPML:

Mr. Cohen, director and chairman of PPML

Mr. Cohen is the senior adviser to Appian in North America. Prior to joining Appian, Mr. Cohen was managing director and head of North American mining investment banking at JPMorgan. During this period, he originated and successfully executed merger and acquisition, debt, and equity transactions valued at over $40-billion (U.S.). Prior to joining JPMorgan in 2010, Mr. Cohen worked as a senior professional in the M&A groups of both global and domestic Canadian investment banks, where he focused on the natural resources sector. Mr. Cohen holds a BSc in engineering from Queen’s University and an MBA from the Ivey School of Business at the University of Western Ontario.

Mr. Fisher, director of PPML

Mr. Fisher is a principal at Appian Capital Advisory. Prior to joining Appian in 2019, Mr. Fisher served as vice-president for Mubadala Investment Company, making and managing direct private equity investments into companies focused within the mining, metals and utilities sectors. Prior to Mubadala, Mr. Fisher worked as an investment banker within the natural resources group at Deutsche Bank, responsible for metals and mining client coverage and execution. Mr. Fisher began his career as a submarine officer in the U.S. Navy, where he was a qualified nuclear engineer. Mr. Fisher holds an MBA from Harvard Business School, a master of science in electrical engineering from the Naval Postgraduate School and a bachelor of science in electrical engineering from the United States Naval Academy.

Mr. Wares, director of PPML

Mr. Wares is currently the chairman and chief executive officer of Osisko Metals, and a professional geologist with over 40 years of experience in mineral exploration and development. He was responsible for the discovery of the Canadian Malartic bulk-tonnage gold deposit, which was subsequently developed by Osisko Mining Inc. into one of Canada’s largest gold producers. Among other awards, Mr. Wares was a co-winner of the Prospectors and Developers Association of Canada’s Prospector of the Year Award for 2007, and was named, together with John Burzynski and Sean Roosen, as Mining Men of the Year for 2009 by the Northern Miner. Mr. Wares is also chairman and CEO of Brunswick Exploration Inc. He holds a bachelor of science and an honorary doctorate in earth sciences from McGill University, and currently serves as member of McGill University’s faculty of science advisory board. Mr. Wares also served for 10 years as president and board director of the Ordre des Geologues du Quebec and three years on the mining advisory board with the Autorite des Marches Financiers du Quebec.

Mr. Stothart, director of PPML

Mr. Stothart is an independent consultant with over 35 years in the mining business. Up until 2022, he previously spent 14 years with Iamgold Corp., originally as chief operating officer and later moving to the position of president and CEO. Prior to Iamgold, Mr. Stothart worked in the Noranda-Falconbridge-Xstrata organization for 21 years in a number of operational, project, business development and management roles, including spending nearly 10 years in South America on large base metal operations and development projects. Mr. Stothart graduated from the University of British Columbia in 1987 with a double major in mining and mineral process engineering and later completed a Falconbridge-sponsored executive development program at the Universidad Catolica de Santiago in Chile. Mr. Stothart has been involved in several industry associations and previously served as the chair of the Mining Association of Canada (MAC) from 2019 to 2021. Mr. Stothart is also the current chair of the non-profit St. Elizabeth Foundation with a current focus on end-of-life care and in-community health care training and service partnerships with several first nations and Inuit communities in Canada.

Mr. Hussey, CEO of PPML

Mr. Hussey, PGeo, is currently the president and chief operating officer of Osisko Metals, and has over 35 years of professional experience in the mining industry. As a consultant, he assisted junior mine development companies by offering exploration, mining and geometallurgical support services, including Champion Iron Mines. He was with Noranda/Falconbridge for 19 years working at the Brunswick No. 12 mine, Gaspe Copper mines, the Antamina mine start-up in Peru, as well as the Raglan mine in Northern Quebec. As senior scientist with the mining technology group at the Noranda Technology Center in 2002, he enhanced his network in the metallurgical research and mining innovation fields.

Mr. Glavac, CFO of PPML

Mr. Glavac is currently the chief financial officer of Osisko Metals, and has over 20 years of experience in financial reporting, including over 12 years in the mining industry. Since 2018, Mr. Glavac has also served as chief financial officer for Falco Resources Ltd. and previously served as director, financial reporting and internal controls, at Dynacor Gold Mines, and interim chief financial officer at Alderon Iron Ore Corp. In addition, Mr. Glavac spent 10 years at KPMG, working with both public and private companies, providing audit, taxation, strategic advisory and public offering services. Mr. Glavac is also involved with other public companies in the mining industry.

Advisers

Maxit Capital LP acted as financial adviser to Osisko Metals and Bennett Jones LLP acted as legal counsel to Osisko Metals. McCarthy Tetrault LLP acted as legal counsel to Appian.

About Osisko Metals Inc.

Osisko Metals is a Canadian exploration and development company creating value in the critical metals space, specifically copper and zinc. The company is a joint venture partner with Appian for the advancement of one of Canada’s premier past-producing zinc mining camps, the Pine Point project, located in the Northwest Territories, for which the 2022 preliminary economic assessment has indicated an after-tax net present value of $602-million and an internal rate of return of 25 per cent, based on long-term zinc price of $1.37 (U.S.)/pound and the current mineral resource estimates that are amenable to open-pit and shallow underground mining. The current mineral resource estimate in the 2022 PEA consists of 15.7 million tonnes (Mt) grading 5.55 per cent zinc equivalent of indicated mineral resources and 47.2 Mt grading 5.94 per cent ZnEq of inferred mineral resources.

We seek Safe Harbor.

https://osiskometals.com/