MONTREAL, QUEBEC--(Marketwired - July 2, 2013) - Osisko Mining Corporation (the "Company" or "Osisko") (OSK.TO)(EWX.F) is pleased to announce that it has received the final $30 million payment from Kirkland Lake Gold Inc. ("KL Gold") (KGI.TO) pursuant to a property sale agreement between KL Gold and Queenston Mining ("Queenston"). Osisko has filed the transfer application which leads to the final steps of the purchase and sale agreement ("Agreement") dated March 27, 2012 between KL Gold and Queenston pursuant to which Queenston had agreed to sell its 50% interest in the properties held under Joint Venture ("JV") with KL Gold located in Teck Township to KL Gold for $60 million cash and a royalty, subject to the terms and completion of the conditions set out in the Agreement.
The original terms of the sale were a $10 million non-refundable cash payment on signing, $20 million cash on closing (both completed prior to Osisko's acquisition of Queenston), and $30 million cash due on December 3, 2012. Upon closing of the sale, Queenston received a promissory note representing the balance of the purchase price payable in the principal amount of $30 million, accruing interest at a rate of prime plus 2.5% per annum, secured by way of a first fixed charge and mortgage on the JV properties that are the subject of the sale, that was due and payable on December 3, 2012. Payment of this promissory note was not completed on schedule due to a delay by the Ontario government in dividing a mining lease in two separate parts. The promissory note was subsequently modified to an escrow deposit in early 2013 which was payable to Osisko upon completion of the land title transfer application. The land title transfer application was filed with the Ontario government on June 27, 2013 and the escrow funds have been released to Osisko.
Although Osisko has no reason to believe that Consent ("the Consent") by the Ministry of Northern Development and Mines ("MNDM") will be refused or delayed, the company has agreed that should Osisko not receive Consent to transfer the Queenston claims to KL Gold by September 30, 2013, Osisko will return the escrow funds ("the Funds") to KL Gold and use its best efforts to obtain the Consent and to register the transfer of the land title to KL Gold as soon as possible thereafter, at which time the Funds would be repaid to Osisko.
As part of the original transaction, Osisko also maintains the right to receive a royalty equal to $15 per ounce on any gold produced from the sold properties after the first 1.3 million ounces of gold have been produced, for the next 1 million ounces produced; and $20 per ounce on any gold produced thereafter.
About Osisko Mining Corporation
Osisko Mining Corporation operates the Canadian Malartic Gold mine in Malartic, Québec and is carrying out exploration and project development within the Americas.
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, that consent to the land title transfer will be obtained from the Ministry of Northern Development and Mines in a timely manner and that any gold may be produced from the properties transferred to Kirkland Lake Gold Inc. ("KL Gold") and, accordingly, that any royalty may be paid to the Company. Although Osisko believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, including, without limitation, that all technical, economical and financial conditions will be met in order to achieve such events qualified by the foregoing cautionary note regarding forward looking statements, 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 timeliness of government approvals, Osisko's reliance on KL Gold to achieve commercial production on the above mentioned properties, results of exploration and development activities, gold prices, access to skilled consultants, mining development and construction personnel, uninsured risks, regulatory framework and changes, defects in title, availability of personnel, materials and equipment, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations market prices, 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.