Osisko Dev't agrees to sell San Antonio project to Axo

Executive Summary

• Osisko Development Corp. has entered into a securities purchase agreement to sell its 100% interest in the San Antonio gold project in Sonora, Mexico, to Axo Copper Corp.
• The transaction consideration consists of approximately 15.3 million Axo common shares (representing a 9.99% non-diluted stake in Axo) plus significant contingent payments tied to project milestones and future financings.
• The San Antonio project is currently in care and maintenance and is not considered a material property of Osisko Development.

Key Details

• Transaction Structure: Osisko Development will acquire Sapuchi Minera S.A. de R.L. de C.V., which holds 100% of the mineral concessions for the San Antonio project, via Axo Copper Corp.
• Upfront Consideration: Osisko will receive 15,305,536 common shares of Axo (or equivalent number to maintain a 9.99% non-diluted ownership) upon closing.
• Contingent Payment 1 (Tax Refund): Cash payment equal to 70% of any Mexican value-added tax refund due to Sapuchi for periods ending on or before the closing date.
• Contingent Payment 2 (Feasibility Study): $2 million USD, payable in cash or Axo shares at Axo's option, upon the public filing of a National Instrument 43-101 compliant feasibility study.
• Contingent Payment 3 (First Gold Pour): $2 million USD, payable in cash or Axo shares at Axo's option, upon the completion of the first gold pour at the project.
• Contingent Payment 4 (Dilution Protection): If Axo raises at least $10 million USD in aggregate gross proceeds via equity financing, Axo must issue additional shares to Osisko to ensure Osisko retains its 9.99% non-diluted interest in Axo based on the initial $10 million raised.
• Lock-up Period: Osisko has agreed to hold its Axo shares for at least 12 months post-closing and comply with certain conditions for 24 months from completion.
• Regulatory Approval: Transaction is subject to customary closing conditions, including acceptance by the TSX Venture Exchange.
• Project Status: The San Antonio project has been in care and maintenance since Q3 2023 and is not considered a material property of Osisko.

Notable Quotes

• "In line with our strategy of focusing on priority development assets within our portfolio, 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," commented Sean Roosen, chairman and chief executive officer.