Osisko Development Announces Closing of US$225.0 Million Aggregate Principal Amount of 4.125% Convertible Senior Notes Offering

Osisko Development closed a US$225.0 million offering of 4.125% convertible senior notes due 2031 via private placement. Net proceeds of ~US$215.9 million will fund development of the Cariboo Gold Project, general corporate purposes, and the cost of cash‑settled capped call transactions (cap at US$5.88/share, 100% premium to May 20 reference price). Initial purchasers also hold a 13‑day option for up to an additional US$25.0 million in notes; a concurrent US$50.0 million private placement by affiliate Double Zero Capital, LP is to close May 29. The notes convert at 272.1088 common shares per US$1,000 principal – an initial conversion price of US$3.68, a 25% premium to the May 20 US$2.94 reference price. Interest is 4.125% semi‑annually, maturity June 15, 2031. The offering is consistent with the US$275.0 million pricing announced on May 21.

The closing is the final step of a fully articulated financing that was widely expected; it therefore has no new informational content. The market had already absorbed the initial proposal (May 20) – rated Material – Negative – and the pricing terms (May 21) – rated Routine – Positive. Now that the notes are in place, the immediate funding overhang is resolved, but the instrument itself carries material future implications: it increases total debt from ~US$109.9 million (Appian facility) to at least ~US$334.9 million (excluding the affiliate tranche), imposes a 4.125% cash‑interest burden, and creates an overhang from the conversion feature, even though the effective conversion price (US$3.68) is well above the current CAD$ price when converted at the prevailing exchange rate. The capped‑call structure mitigates dilution only up to US$5.88, leaving meaningful exposure if the stock recovers. Combined with the fatal January 2026 contractor incident, slower‑than‑planned underground development, and the recent‑equity‑and‑debt‑heavy capital structure (numerous placements in 2025‑2026), the financing underscores the project’s intensive capital needs and execution risk. Against the backdrop of a 41% share‑price decline from the March 2026 peak, the transaction does not alter the project’s fundamental outlook but adds leverage and potential dilution. Consequently, the closing is routine and, on balance, marginally negative given the ongoing execution and funding challenges.

Osisko Development Corp. is a gold development company focused on the Cariboo Gold Project in central British Columbia – a fully permitted, 100%‑owned underground deposit. A 2025 feasibility study (filed June 2025) outlined proven and probable reserves of 2.07 Moz Au (17.8 Mt @ 3.62 g/t), a 10‑year mine life producing ~190 koz Au/year (202 koz/year in the first five years), after‑tax NPV₅% of $943 million (base case US$2,400/oz gold), IRR of 22.1%, and all‑in sustaining costs of US$1,157/oz. The project is in pre‑construction and early underground development, with a US$450 million senior secured loan facility from Appian Capital Advisory and a project/construction management agreement with JDS Energy & Mining. Other assets include the Tintic small‑scale heap‑leach operation in Utah (limited gold sales) and the sold San Antonio Gold Project in Mexico (completed January 2026).