Osisko Development to divest noncore San Antonio gold project
North America-focused Osisko Development has agreed to sell its noncore San Antonio gold project, in Mexico’s Sonora state, to TSX-V-listed Axo Copper in an all-share transaction that will see Osisko retain a strategic 9.99% stake in the emerging copper/gold company.
Axo will acquire Osisko’s wholly owned subsidiary Sapuchi Minera, which holds the San Antonio mineral concessions, subject to closing conditions and regulatory approvals.
On completion, Osisko will receive about 15.3-million Axo shares – or such number as required to give it a 9.99% non-diluted interest. The company will also be eligible for a series of contingent payments tied to project milestones.
These include 70% of any Mexican value-added tax refund owed to Sapuchi, a $2-million payment (in cash or shares) upon Axo filing a National Instrument 43-101 feasibility study, and a further $2-million cash or share payment upon first gold pour. If Axo raises at least $10-million in equity, Osisko will be issued additional shares to maintain its 9.99% interest on the initial tranche.
Chairperson and CEO Sean Roosen said the transaction aligned with the company’s strategy to focus capital and management attention on core development assets.
“We are pleased to announce the sale of San Antonio to Axo. We believe Axo is well equipped to successfully advance the project through its next phase, and look forward to remaining a supportive long-term shareholder,” he stated.
San Antonio has been on care and maintenance since the third quarter of 2023 and is not considered a material property within Osisko’s portfolio. Osisko is advancing its flagship 100%-owned Cariboo gold project, in British Columbia, alongside its Tintic project in Utah, as it targets becoming an intermediate gold producer.
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