Osisko Metals

Investor Insight

Osisko Metals’ high-quality polymetallic assets present a compelling investment opportunity amid a rapidly expanding critical and base metals market, as North America continues to strengthen its domestic supply.

Overview

Osisko Metals (TSXV:OM) is an exploration and development company focusing on two base metal assets in Canada – Gaspé Copper and Pine Point – targeting copper and zinc, both critical minerals necessary for the global transition to clean energy. These assets are past-producing, brownfield projects of significant potential for future production.

The Gaspé Copper project in Québec has a rapid development plan to begin mining the indicated resource of 495 million tons (Mt) of ore grading 0.37 percent copper equivalent. As the gap between available copper supply and growing demand widens, Osisko Metals is well-positioned to help create and strengthen a domestic supply chain for the North American market.

The company’s Pine Point zinc-lead project in the Northwest Territories contains an indicated mineral resource estimate of 49.5 million tons at 4.2 percent zinc and 1.5 percent lead, in addition to significant inferred resources. Zinc is a necessary mineral for the clean energy transition and has important applications throughout the manufacturing industry. This widespread use of this mineral has analysts cautioning about a looming supply shortage.

A preliminary economic assessment (PEA) completed in 2022 indicates the Pine Point project has the potential to become a world-class, high-grade zinc asset, with an after-tax net present value (NPV) of C$602 million and internal rate of return (IRR) of 25 percent.

In February 2023, Osisko Metals announced a C$100-million investment agreement with Appian Natural Resources Fund III for a joint venture on the Pine Point project. The agreement includes C$75.3 million of funding for the project and up to C$24.7 million in cash payments to Osisko Metals.

Led by a management team with a wide range of expertise throughout the natural resources industry and experience in geology, exploration, corporate finance and corporate administration, Osisko Metals is well-poised to become a world-class supplier of base metals.

Company Highlights

Osisko Metals (OM) is focused on becoming a significant base metals producer by bringing two past-producing Canadian brownfield assets back into production: the Gaspé Copper project and the Pine Point zinc and lead project. The company’s projects target critical minerals to aid in the global transition to clean energy and net-zero emissions. OM’s 100-percent-owned Gaspé Copper project in Québec has a rapid development plan to capitalize on its NI 43-101 indicated resource of 495 million tons of ore grading 0.37 percent copper equivalent to meet the needs of a growing supply gap. The Pine Point project in the Northwest Territories has the potential to become a top-ten zinc producer with high-grade zinc concentrates. C$100 million investment agreement with Appian Natural Resources Fund III for a joint venture on the Pine Point project – including C$75.3 million funding for the project – under which Appian can earn an up to 65 percent ownership in Pine Point. The 2024 mineral resource estimate update for the Pine Point project includes indicated mineral resources of 49.5 Mt grading 4.22 percent zinc and 1.49 percent lead and inferred mineral resources of 8.3 Mt grading 4.18 percent zinc and 1.69 percent lead. A management team with expertise throughout the mining industry leads the company toward achieving its goal of becoming the leading base metal developer in North America by supplying the base metals necessary for the clean energy transition.

Key Projects

Gaspé Copper Project

The Gaspé Copper project in Québec is among the most significant copper development projects in eastern North America. Osisko Metals completed the100-percent acquisition of Gaspé Copper in July 2023 and has since commenced drilling at the property. Québec has a well-known reputation as one of the most mining-friendly jurisdictions in North America, with a long history of copper production.

Project Highlights:

Promising Metallurgy: Preliminary testwork delivered average copper recoveries of 92 percent and average molybdenum recoveries of 65 percent, indicating that Gaspé Copper should produce copper and molybdenum concentrates with excellent metal grades and a payable silver credit added to the copper concentrate. Prolific Past Production: The former Gaspé mines were in production from 1955 to 1999 and produced more than 100 million tonnes from a combination of open-pit and high-grade underground mines. The growing demand for copper makes reviving the project economically compelling. Robust Infrastructure: The project has infrastructure to quicken development, including paved road access, hydroelectric power on-site, and port access via the Saint Lawrence River and the town of Gaspé. Water characterization: Surface water characterization of the mine site and surrounding area is continuing. Detailed sampling of the pit waters and experimental fishing downstream from the mine site are planned to better understand the health of fish populations and the potential impacts of pit dewatering. Preliminary economic assessment: Scheduled for early 2025.

Pine Point Zinc-Lead Project

The Pine Point asset in the Northwest Territories has the infrastructure in place to help the company move the project toward development. The project has an existing hydroelectric power substation on site, rail access within 60 kilometers, and paved access roads to the site.

Project Highlights:

High-grade Clean Concentrates: Pine Point has demonstrated the potential to produce one of the world’s cleanest concentrates for zinc and lead. A recent metallurgical assessment indicates high recoveries of 87 percent for zinc, and 93 percent for lead using XRT sorting and conventional grinding and flotation processes. Additionally, studies indicate low levels of deleterious elements in the concentrates, making them appealing to smelters around the world that seek to increase the overall purity levels of their concentrate inputs. Community Support: Osisko Metals has worked hard to earn community support in the nearby towns of Hay River, Fort Smith and Fort Resolution, and has also concluded two separate collaboration agreements with local Indigenous communities: Deninu K’ue First Nation and Northwest Territory Metis Nation. These agreements include education, training, employment, and business opportunities. Additionally, a 2017 exploration agreement was signed with K’atl’odeeche First Nation.

Management Team

Robert Wares – CEO

Robert Wares is a professional geologist with more than 35 years of experience in mineral exploration and development. He was responsible for discovering the Canadian Malartic bulk tonnage gold mine, which Osisko Mining subsequently developed into one of Canada’s largest gold producers. Among other awards, Wares was a co-winner of the Prospectors and Developers Association of Canada’s “Prospector of the Year Award” for 2007 and was named, together with John Burzynski and Sean Roosen, as “Mining Men of the Year” for 2009 by the Northern Miner. Wares sits on the board of directors of Brunswick Exploration. Wares has a Bachelor of Science and an honorary doctorate in earth sciences from McGill University.

Jeff Hussey – Director and CEO of Pine Point Mining Limited

Jeff Hussey has 32 years of professional experience in the mining industry. He has worked in both open-pit and underground mine operations at various stages of mine life, from start-up to mine closure, and more recently, working in mineral exploration and development projects. He spent 19 years with Noranda/Falconbridge. His mine operation experience includes work at the Brunswick No. 12 mine, Gaspé Copper mines, the Antamina mine start-up in Peru, as well as the Raglan mine in Northern Québec. As a senior scientist with the Mining Technology Group at the Noranda Technology Centre in 2002, he enhanced his network in the metallurgical research and mining innovation fields. As a consultant since 2007, Jeff Hussey and Associates has helped junior mine development companies by offering exploration, mining, and geo-metallurgical support services. These include Champion Iron Mines, Focus Graphite, Puma Exploration and Starcore International in Mexico. While at Champion Iron Mines, he participated in building significant high-quality iron ore resources, completing feasibility studies and participating in raising more than $70 million for corporate development. While working with Focus Graphite, development responsibilities included a feasibility study and associated work with community stakeholders and governments. Hussey has a Bachelor of Science in geology from the University of New Brunswick.

Anthony Glavac – Chief Financial Officer

Anthony Glavac has more than 17 years of experience in financial reporting, including over 12 years in the mining industry. Since August 2017, Glavac has served as vice-president, corporate controller for Falco Resources. He previously served as director of financial reporting and internal controls at Dynacor Gold Mines, and interim chief financial officer at Alderon Iron Ore. Before joining Alderon, Glavac spent 10 years at KPMG, working with both public and private companies, providing audit, taxation, strategic advisory and public offering services. Glavac is also involved with other public companies in the mining industry.

Ann Lamontagne – Vice-president, Environment and Sustainable Development

Ann Lamontagne is a civil engineer who obtained her doctoral degree in mining environment from Laval University in 2001. She has worked in the mining industry for over 25 years as a consultant for geotechnical, water management, hydrogeology, and environmental projects. She has been involved in the development of several mining projects where her expertise has been invaluable in minimizing environmental risks throughout the mine planning process, from initial design through to closure and reclamation. Lamontagne has also been involved in many R&D projects with mining companies, including Nouveau Monde Graphite, Troilus Gold, and Mason Graphite.

Killian Charles – Strategic Advisor

Killian Charles has been president and CEO of Brunswick Exploration since 2020. Prior to this, he was vice-president, corporate development for Osisko Metals, where he now remains as a special advisor. Charles was a mining analyst at Laurentian Bank Securities and at Industrial Alliance Securities (Broker) for six years. He also worked as a manager of corporate development at Integra Gold, until its acquisition by Eldorado Gold in 2017. Charles received an undergraduate degree in Earth and Planetary Sciences from McGill University.