Video: Gold Royalties!
Billion dollar deals in the commodity sector are relatively rare. But on Monday, we saw one of these spectacular deals! Osisko Gold Royalties announced, that the company will take over Orion Mine Finance’ royalty portfolio!
Osisko Gold Royalties will acquire this high-quality precious metals portfolio of assets consisting of 74 royalties, streams and precious metal offtakes for total consideration of CA$1,125-million!
The purchase price paid to Orion will consist of: CA$675-million in cash consideration plus CA$450-million in Osisko common shares.
Research: Cormark Research recommends Osisko Gold Royalties with target 22,50 CAD
Transaction highlights:
- Immediately accretive to cash flow: The transaction, which increases shares outstanding by less than 50 per cent, doubles Osisko's near-term cash flow and more than triples Osisko's cash-flowing assets from five to 16.
- Industry-leading production and cash flow growth: The transaction provides Osisko with an unparalleled growth pipeline with expected forecasted production of over 100,000 gold equivalent ounces in 2018 growing to over 140,000 gold equivalent ounces by 2023 and pro forma cash flow growth of 10 per cent per annum from 2017 to 2023.
- Addition of three cornerstone assets: Stream assets from the Renard, Mantos Blancos and Brucejack mines complement the company's existing cornerstone royalties on the world-class Canadian Malartic and Eleonore mines.
- Maintains precious metals focus: Osisko's pro forma net present value and cash flow will be over 90 per cent from precious metal assets.
- Americas-focused portfolio: Over 80 per cent of combined cash flow will come from North America and over 90 per cent of combined cash flow will come from the Americas.
- Expands and diversifies portfolio: The deal adds 74 assets, including 61 royalties, seven precious metal offtakes and six streams, diversifies Osisko's existing cash-flowing asset base, and enhances the company's development and exploration pipeline.
The combination of Osisko and Orion's portfolios will result in the Company holding a total of 131 royalties and streams, including 16 revenue-generating assets.
Combining these tremendous assets from Orion Mine Finance together with Osisko's existing portfolio will set the stage for the company to earn over 140,000 gold equivalent ounces annually by 2023, without compromising its focus on gold and precious metals from properties located principally in North America.
Investors reacted very positive on this great news and pushed the Osisko Gold Royalties stock 14% higher!
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