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.
• Osisko Development will retain a long-term equity position in Axo Copper Corp. and will hold the shares for a minimum of 12 months post-closing.

Key Details

• Transaction Structure: Osisko Development is selling its 100% interest in the San Antonio gold project via the acquisition of Sapuchi Minera S.A. de R.L. de C.V. by Axo Copper Corp.
• Initial Consideration: Osisko will receive 15,305,536 common shares of Axo (or equivalent number to achieve 9.99% ownership on a non-diluted basis) 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 (Equity Financing): If Axo raises aggregate gross proceeds of at least $10 million USD in equity financings, Axo must issue additional shares to Osisko to maintain Osisko's 9.99% non-diluted interest in Axo relative to the initial $10 million raised.
• Share Lock-up: Osisko agreed to hold Axo shares for at least 12 months following 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 is not considered material to Osisko and has been in care and maintenance since Q3 2023.
• Legal Adviser: Bennett Jones LLP is acting as legal adviser to Osisko Development.

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.