Osisko makes Bowmore Exploration acquisition

first_imgOsisko Mining Corp has signed a letter of intent with Bowmore Exploration pursuant to which the mining companies are to become strategic partners. Under the terms of the letter of intent, Osisko is to acquire C$3.0 million of a proposed C$4.2 million non-brokered private placement and, upon completion of the private placement; Osisko will have the right to appoint two nominees to Bowmore’s five member board of directors. Osisko’s primary business objective is the exploration and development of the flagship Canadian Malartic gold deposit, which currently has reserves totalling 6.28 Moz. It has also identified a number of grass-roots gold exploration opportunities in Canada and has selected Bowmore as an exploration partner to advance these projects. Bowmore currently has an option to acquire a 100% interest in the Santa Elvira gold-copper property in Mexico, which is of interest to Osisko. The parties believe that their strategic alliance should create shareholder value for both Osisko and Bowmore, as Osisko intends to involve Bowmore in exploration projects that would not be suitable for Osisko given its focus on the Canadian Malartic gold deposit, and thereby reduce Osisko’s exploration risk, and Bowmore will benefit from deal flow generated by Osisko, allowing it to use the proceeds for exploration work on Santa Elvira, new project acquisitions, development and for working capital purposes.Bowmore previously announced a C$1.0 million non-brokered private placement which has now been restructured as a C$4.2 million non-brokered private placement consisting of the sale of 21,000,000 units at $0.20 per unit for gross proceeds of C$4.2 million. Osisko will agree to acquire 15,000,000 units for gross proceeds to Bowmore of C$3.0 million and the remaining 6,000,000 units will be acquired by insiders of Osisko and Bowmore and by other accredited investors. Each unit consists of one common share of Bowmore and one-half of one common share purchase warrant.Upon closing of the private placement, Bowmore will have 37,728,984 shares outstanding on a non-diluted basis and 55,458,984 shares outstanding on a fully diluted basis, of which Osisko will own 15,000,000 shares (39.8%) of the shares outstanding on a non-diluted basis and 22,500,000 shares (40.6%) of the shares outstanding on a fully diluted basis.Sean Roosen, President and Chief Executive Officer of Osisko commented: “We are very pleased to announce this placement with Bowmore Exploration, a company that we believe has great depth and strength as an exploration group. As Osisko’s strategic partner in future grass-roots exploration projects, we are confident that Bowmore will be able to move quickly to evaluate opportunities of merit. This will allow Osisko to participate in grassroots exploration as a significant shareholder. Our goal is to enhance value for our shareholders by providing a solid pathway for the company’s future growth.”Osisko is currently developing the Canadian Malartic gold deposit and evaluating adjacent areas for a large-scale open pit, bulk-tonnage mining operation. The Canadian Malartic deposit is one of the biggest gold reserves in Canada for a single deposit, and is still growing through ongoing drilling on new mineralised zones. Osisko is well-funded with around C$450 million on hand.last_img read more

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