Osisko Mining Inc. has concluded a 50:50 joint venture (JV) agreement with a subsidiary of Gold Fields Ltd. for the joint ownership and development of Osisko’s Windfall gold project, located in the Abitibi greenstone belt in the James Bay region of Québec.
Gold Fields will make an initial cash payment to Osisko of C$300 million ($220 million) on signing; and an additional (deferred) cash payment to Osisko of C$300 million ($200 million) on the issuance of the applicable permits authorizing the construction, operation and mining of the Windfall Project. Gold Fields will fund regional exploration expenses up to a maximum of C$75 million ($55 million), after which regional exploration programs would be funded proportionately by both companies.
In addition to the initial and deferred cash payments, Gold Fields will make two additional separate C$17 million ($12.5 million) cash payments to Osisko, the first on July 31, 2023, and the second on December 31, 2023. These are reimbursement payments for Osisko’s pre-construction spend. The two companies will share all pre-construction costs, estimated at C$250 million ($184 million), and construction costs, estimated at C$789 million ($579 million) on a 50:50 basis going forward.
“Today is the start of what we believe will prove to be a long and fruitful partnership with Gold Fields at Windfall, and in what we both believe is a significant emerging gold district in Québec,” said John Burzynski, chairman and CEO for Osisko Mining. “This partnership further strengthens our strong balance sheet, allows us to significantly de-risk Windfall and brings us a very important step closer to realizing our objective of becoming a leading Canadian gold producer.” With the proceeds from this transaction, Burzynski said Osisko is fully-funded for its share of development capital to bring Windfall into production.
Assuming a cut-off grade of 3.50 grams per metric ton (g/mt) of gold, the Windfall resource estimate has 811,000 mt at 11.4 g/mt gold (297,000 oz) in the measured mineral resource category, 10.25 million mt at 11.4 g/mt gold (3,754,000 oz) in the indicated mineral resource category and 12,287,000 mt at 8.4 g/mt gold (3,337,000 oz) in the inferred mineral resource category.
The transaction closed on May 2, 2023, with Gold Fields acquiring a 50% partnership interest in the Windfall Mining Group, which will develop the Windfall project and the surrounding Urban Barry and Quévillon exploration properties.
