Osisko Metals Sells an Additional 5% Interest in Pine Point to Appian



MONTREAL, Feb. 22, 2024 (GLOBE NEWSWIRE) — Osisko Metals Incorporated (the “Company” or “Osisko Metals“) (TSXV:OM, OTCQX:OMZNF, FRANKFURT: 0B51)) is pleased to announce that it has sold an additional 5% ownership interest in Pine Point Mining Limited (“PPML“) to a subsidiary of Appian Natural Resources Fund III LP (“Appian“), a fund advised by Appian Capital Advisory LLP, a London-based private equity group specializing in the acquisition and development of mining assets, for an expected payment of approximately C$8.33 million (based on certain assumptions and estimates outlined below) of which (i) approximately C$6.66 million in cash was paid to Osisko Metals in connection with closing of the transaction, and (ii) the remaining amount (if any), estimated to be approximately C$1.67 million based on certain budget assumptions and estimates of management required to advance the Pine Point Project to a positive FID (as defined below), to be paid as a milestone payment to Osisko Metals upon a positive FID (if at all) (the “Additional Interest Disposition“). PPML is a joint venture entity jointly owned by the Company and Appian, which holds the Pine Point Project. The Additional Interest Disposition is a non-arm’s length transaction within the policies of the TSX Venture Exchange (the “Exchange“) as Appian is a non-arm’s length party of PPML, an affiliate of the Company.

Robert Wares, CEO and Chairman of the Board, commented: “The sale of the additional five percent interest in Pine Point to Appian will allow the Company to advance the Gaspé Copper project without resorting to an additional equity financing, which in the current market would be excessively dilutive. We thank Appian for their committed interest in the Pine Point Project and look forward to a continued productive joint venture.”

As additional background, the Company and Appian formed a joint venture in respect of PPML on April 6, 2023 pursuant to which, among other things, Appian is entitled to earn up to a 60% ownership interest in PPML by satisfying certain funding obligations in respect of the Pine Point project. See the Company’s news release dated April 6, 2023 entitled “Osisko Metals Announces Successful Closing of Previously-Announced Joint Venture Transaction with Appian”. Pursuant to the Additional Interest Disposition, the Company and Appian entered into (i) an amending agreement to the investment agreement dated February 21, 2023, and (ii) amendment and restatement of the joint venture company agreement dated April 6, 2023 to, among other things, provide for the following amendments to the joint venture:

Increase in the target ownership interest by Appian in PPML from 60% to 65% – Appian will commit to funding all cash calls issued by the board of PPML to Appian until Appian has acquired an ownership interest of 65%.
Board Size and Composition – Prior to the amendments, the board of directors of PPML consisted of four directors (two nominees from Appian and two nominees from Osisko Metals), with Appian having the right to appoint the Chair and the Chair having the casting vote. Pursuant to the amendments and subject to certain exceptions, the default board of directors of PPML shall consist of five directors (three nominees from Appian and two nominees from Osisko Metals). During any period in which Appian holds less than 65% of the shares of PPML and terminated its buyer commitments, the PPML board will consist of four directors, with Appian and Osisko Metals having the right to nominate two directors each, subject to certain exceptions.
Casting Vote – In exchange for increasing the nominees of Appian to the board of directors of PPML from two to three nominees, the threshold for a casting vote by the Chair has been increased from 60% to 65% in the event Appian holds more than 50% but less than 65% of the shares of PPML and has terminated its buyer commitments.

The increase in Appian’s target ownership interest in PPML from 60% to 65% is expected to result in additional proceeds to Osisko Metals of C$8.33 million, …

Full story available on Benzinga.com


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