Osisko Gold Royalties (TSX: OR; NYSE: OR) has agreed to acquire an additional 1.75% net smelter return royalty (NSR) for $20 million on the Barkerville Gold Mines’ (TSXV: BGM; US-OTC: BGMZF) Cariboo gold project in British Columbia, raising its total royalty on the project to 4%.
Osisko can add a further 1% to its NSR for $13 million at any time before the end of the year.
Barkerville will also give the company 10 million warrants that it can exchange for shares at a 75¢ exercise price over three years.
The company currently owns 32.4% of Barkerville shares. That number would rise to 34.7% if it exercises its warrants.
The deal leaves Barkerville well funded to continue developing Cariboo, where it recently cut 14.7 grams gold over 23.6 metres from 120 metres downhole in the project’s Mosquito Creek Zone as part of its 50,000-metre 2018 exploration program.
The project contains 8.1 million measured and indicated tonnes grading 6.1 grams gold per tonne for 1.6 million oz. gold and 12.7 million inferred tonnes at 5.2 grams gold for 2.16 million oz. gold.
The 1,950 sq. km property includes Barkerville’s fully-owned and permitted QR mill and tailings facility, located 110 km from Wells, British Columbia, and accessible via an all-season road.
Prior to this acquisition, Osisko most recently acquired a silver stream on Falco Resource’s (TSXV: FPC; US-OTC: FPRGF) Horne 5 project in Rouyn-Noranda, Que., for staged payments of up to $180 million. It will also pay 20% of the spot price of silver per ounce, up to US$6 per oz. silver.
Shares of Barkerville are currently trading at 37¢ with a 52-week range of 35¢ to 91¢. The company has a $162 million market capitalization.
Shares of Osisko Gold Royalties are currently trading at $9.97 with a 52-week range of $9.85 to $17.55. The company has a $1.56 billion market capitalization.