Modifies Outstanding Warrants
MONTREAL, QUEBEC--(Marketwire - May 16, 2012) - Osisko Mining Corporation ("Osisko" or the "Company") (TSX:OSK)(FRANKFURT:EWX) is pleased to announce that it has entered into an agreement to amend its $150 million credit facility with CPPIB Credit Investments Inc. ("CPPIB"), a wholly-owned subsidiary of the CPP Investment Board, with CPPIB making available to the Company an additional $100 million delayed draw term loan. The key terms of the amendment are as follows:
- The initial cash repayment schedule has been extended by one year to June 30, 2013. The reimbursements are based on 50% free cash flow up to $60 million per annum.
- CPPIB will make available a delayed draw term loan of $100 million for working capital and general corporate purposes. Osisko may draw funds under this facility in $20 million increments, and any funds outstanding are reimbursable by December 31, 2013. There are no standby fees related to this tranche.
Sean Roosen, President and Chief Executive Officer of Osisko commenting on the agreement: "The enhanced CPPIB facility provides us with greater flexibility as we continue our ramp up at Canadian Malartic and pursue our growth initiatives. We are pleased to have CPPIB as a financial partner in further establishing Osisko as a premier intermediate gold producer".
Osisko and CPPIB have agreed that security on property and assets not relating to Osisko's Canadian Malartic Mine will be released after December 31, 2013 upon making of the initial quarterly mandatory repayment in an amount of not less than $15 million, based on 50% free cash flow. All advances carry an interest rate of 7.5%.
In addition, Osisko has agreed to modifications of the existing warrants held by CPPIB. Osisko has applied to the Toronto Stock Exchange ("TSX") for approval to amend the exercise price of each of the 7 million Tranche A common share purchase warrants issued in September 2009 (the "Tranche A Warrants") and each of the 5.5 million Tranche B common share purchase warrants issued in March 2010 (the "Tranche B Warrants"). The proposed amendment would reduce the exercise price of the Tranche A Warrants from $10.75 to $10.00 and the Tranche B Warrants from $19.25 to $10.00 (which exceeds the volume weighted average trading price of Osisko's common shares for the 5 trading days ended May 15, 2012). The amendment will take effect on the closing of the transaction, expected to occur on or about May 31, 2012.
In addition, the Company has agreed to forego its right to accelerate the exercise of the Tranche A Warrants if the common shares of the Company trade at a 50% premium to the exercise price of the Tranche A Warrants for a period of 15 days. All other terms of the Tranche A Warrants and the Tranche B Warrants will remain the same, including that the Tranche A Warrants will expire on September 24, 2014 and the Tranche B Warrants will expire on December 31, 2015. None of the warrants are held by insiders of Osisko.
About Osisko Mining Corporation
Osisko Mining Corporation operates the Canadian Malartic gold mine in Malartic, Québec and is pursuing exploration on a number of properties, including the Hammond Reef Gold Project in Northern Ontario.
About CPP Investment Board
The CPP Investment Board is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPP Investment Board invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, The CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At December 31, 2011, the CPP Fund totaled $152.8 billion. For more information about the CPP Investment Board, please visit www.cppib.ca.
Certain statements contained in this press release may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that Osisko expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, the successful ramping up of Canadian Malartic. Although Osisko believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, including, without limitation, that all technical conditions will be met in order to proceed diligently with resumption of milling activities at Canadian Malartic however such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include access to skilled consultants, mining development and construction personnel, Osisko's limited experience with production and development of operations, uninsured risks, regulatory framework and changes, availability of personnel, materials and equipment, actual performance of facilities, equipment and processes relative to specifications and expectations, continued availability of capital and financing and general economic, market or business conditions. These factors are discussed in greater detail in Osisko's most recent Annual Information Form and in the most recent Management Discussion and Analysis filed on SEDAR, which also provide additional general assumptions in connection with these statements. Osisko cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Osisko believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.