An LHD exits the Windfall project in Québec. (Photo: Osisko Mining)
Osisko, Gold Fields Announce 50:50 JV on Windfall
Gold Fields will make an initial cash payment to Osisko of C$300 million ($220 million) on signing; and an additional (deferred) cash payment to Osisko of C$300 million ($200 million) on issuance of the applicable permits authorizing the construction, operation and mining of the Windfall Project. Gold Fields will fund regional exploration expenses up to a maximum of C$75 million ($55 million), after which regional exploration programs would be funded proportionately by both companies.
In addition to the initial and deferred cash payments, Gold Fields will make two additional separate C$17 million ($12.5 million) cash payments to Osisko, the first on July 31, 2023, and the second on December 31, 2023. These are reimbursement payments for Osisko’s pre-construction spend. The two companies will share all pre-construction costs, estimated at C$250 million ($184 million), and construction costs, estimated at C$789 million ($579 million) on a 50:50 basis going forward.
“Today is the start of what we believe will prove to be a long and fruitful partnership with Gold Fields at Windfall, and in what we both believe is a significant emerging gold district in Québec,” said John Burzynski, chairman and CEO for Osisko Mining. “This partnership further strengthens our strong balance sheet, allows us to significantly de-risk Windfall and brings us a very important step closer to realizing our objective of becoming a leading Canadian gold producer.” With the proceeds from this transaction, Osisko is fully-funded for its share of development capital to bring Windfall into production, Burzynski said.
Assuming a cut-off grade of 3.5 grams per metric ton (g/mt) of gold, the Windfall resource estimate has 811,000 mt at 11.4 g/mt gold (297,000 oz) in the measured mineral resource category, 10.25 million mt at 11.4 g/mt gold (3,754,000 oz) in the indicated mineral resource category and 12,287,000 mt at 8.4 g/mt gold (3,337,000 oz) in the inferred mineral resource category.
The transaction closed on May 2, 2023, with Gold Fields acquiring a 50% partnership interest in the Windfall Mining Group, which will develop the Windfall project and the surrounding Urban Barry and Quévillon exploration properties.