Osisko Gold Announces Formal Construction Decision and Development Update for the Cariboo Gold Project
Osisko Development Corp. announced that its Board of Directors has issued a formal positive decision to proceed with the construction of its 100%-owned Cariboo Gold Project in British Columbia, marking the Final Investment Decision (FID). The company also secured a US$30 million strategic private placement from Urion Investments Holdings Limited, an affiliate of Trafigura, at US$3.14 per share, alongside definitive off-take agreements for 100% of gold concentrate and doré for the first four years of production. Additionally, a potential non-binding subordinated gold prepayment facility of up to US$120 million was announced, with an exclusivity period for negotiation.
The go-forward capital obligation for the project is estimated at C$990 million, net of C$272 million in costs incurred to July 31, 2026. This figure includes a 16.5% contingency and assumes C$117 million in equipment leasing. Construction is scheduled to span 30 months from August 1, 2026, with the first gold pour expected in Q1 2029 and commercial production anticipated in H2 2029. As of July 31, 2026, overall project completion stands at 22%, with detailed engineering approximately 40% complete and procurement commitments reaching ~44% with C$325 million committed to date. Underground development has seen ~3.0 km completed, and the workforce currently exceeds 350 active personnel, ramping toward 360-375.
Under the terms of the equity financing, Osisko issued 9,554,141 common shares to Urion Investments Holdings Limited at an issue price of US$3.14 per share, representing a 10% premium to the 5-day VWAP. Gross proceeds of approximately US$30 million will be used for the development of the Cariboo Gold Project. The transaction is expected to close in September 2026, subject to TSXV and NYSE acceptance. Shares are subject to a statutory hold of 4 months and 1 day, along with additional standstill and lock-up provisions outlined in a Voting Support Agreement.
Trafigura Canada Limited has agreed to purchase 100% of gold concentrate for the first four years of production, or until 80,000 dry metric tons are delivered. Trafigura also agreed to purchase 100% of gold doré for the first four years of production. Pricing for these agreements incorporates LBMA prices and standard treatment and refining charges.
Regarding the potential prepayment facility, non-binding terms outline a subordinated gold prepayment facility of up to US$120 million, secured by a subordinated security interest against Barkerville assets. The facility would be available to draw for three years from closing, with a maturity of at least five years from closing and an interest rate of SOFR + 6.00%. An exclusivity period has been granted for negotiation, though there is no assurance of a definitive agreement.
Project economics under a spot price scenario of US$4,350/oz indicate an after-tax NPV5% of C$3.2 billion and an after-tax IRR of 42.7%. Average annual free cash flow for the first five years is projected at C$642 million. Total cash costs are estimated at US$996/oz, with All-In Sustaining Costs (AISC) at US$1,202/oz. Sources and uses of capital show total estimated sources of C$1,637 million (US$1,186 million) against total estimated uses of C$1,435 million (US$1,040 million), resulting in a projected surplus liquidity of C$201 million (US$146 million), which includes C$837 million in cash and equivalents.
Mineral reserves effective April 10, 2025, total 17,815,435 tonnes at 3.62 g/t Au for 2,070,798 oz contained gold in the Proven & Probable category. Mineral resources effective April 22, 2025, include Total Measured & Indicated resources of 17,380,000 tonnes at 2.88 g/t Au for 1,612,000 oz contained gold, and Total Inferred resources of 18,774,000 tonnes at 3.09 g/t Au for 1,864,000 oz contained gold. Cut-off grades are set at 1.8 g/t Au for most deposits and 3.5 g/t Au for Bonanza Ledge.
Sean Roosen, Chairman and CEO, stated, "The Board's formal positive decision to commence full-scale construction of our flagship Cariboo Gold Project represents a defining milestone for Osisko Gold and a pivotal inflection point toward our objective of becoming an intermediate gold producer." He added, "We are very pleased to welcome Trafigura, a global leader in the commodities industry, as a long-term strategic partner at Cariboo. Its strategic investment in the Company reflects confidence in both the Project and our team's ability to execute on its construction."