Osisko Gold and Virginia Mines plan to Merge

December 2, 2014

Osisko Gold Royalties Ltd. and Virginia Mines Inc. struck a deal that would combine the companies to create a Montreal-based gold-royalty company with a market capitalization of about 1.3 billion Canadian dollars ($1.15 billion), The Wall Street Journal reported.

The Quebec-based companies said existing Osisko and Virginia shareholders would own about 61 percent and 39 percent, respectively, of the merged entity, which would hold two long-life revenue-generating gold royalties: Osisko’s 5 percent net smelter return royalty on the Canadian Malartic Mine, Canada’s largest gold mine, and Virginia’s sliding-scale 2.2 percent-to-3.5 percent NSR royalty on the Eleonore Mine. Canadian Malartic is owned by Yamana Gold Inc. and Agnico-Eagle mines Ltd., and Eleonore is owned by Goldcorp Inc.

Both the Osisko and Virginia royalties cover the operating mines and the high-potential land packages surrounding the mines, they noted.

“The business combination of Osisko and Virginia creates a leading intermediate royalty company with the two most valuable royalty assets in the gold sector, both of which are located in mining-friendly Quebec,” Osisko Chief Executive Sean Roosen said in statement. “Shareholders of both companies will benefit from increased diversification, superior trading liquidity, a strong balance sheet and a heightened ability to compete for future growth opportunities in the royalty business.”



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