Osisko Development: Project Financing in Place for Big Gold Project in Canada with Upscale Potential

Key Concepts

• Oiscoco Development (ODV): A mining company focused on gold projects.
• Caribou Gold Project: The primary project discussed, located in British Columbia, Canada.
• Prostine Target: An exploration target adjacent to the Caribou Gold Project.
• San Antonio Project: A heap leach project in Mexico.
• Tintic Project: A gold project in Utah, USA.
• Feasibility Study: A comprehensive study to assess the technical and economic viability of a mining project.
• All-In Sustaining Costs (AISC): A key metric for mining profitability, representing the total costs to produce an ounce of gold.
• Resource and Reserve: Terms used to classify the amount of gold that can be economically extracted. Resources are estimates, while reserves are proven or probable quantities.
• Permitting: The process of obtaining regulatory approval to develop and operate a mine.
• Heap Leach: A mining process that uses a dilute solution of cyanide to extract gold from ore.
• Longhole Mining: A low-cost, bulk mining method used in underground operations.
• Paste Backfill: A method of returning processed tailings underground to support mine workings and reduce surface waste.
• Offtake Agreement: A contract to purchase a specific quantity of a commodity.
• Critical Minerals: Minerals deemed essential for economic and national security.

Oiscoco Development Update: Financing, Exploration, and Production Outlook

This summary details the current status and future plans of Oiscoco Development (ODV), as presented by CEO Sean Rosen. The company has achieved significant milestones in financing, exploration, and project development, particularly for its flagship Caribou Gold Project.

Financial Position and Funding

• Strong Balance Sheet: ODV currently holds CAD $41 million in cash and has secured USD $100 million in drawn debt from Appian.
• Additional Financing: The company is working on an additional USD $350 million facility with Appian, with a final investment decision anticipated in Q1.
• Total Funding: ODV has raised over USD $700 million, exceeding the USD $653 million required for its feasibility study in April. This fully funds the initial 5,000-ton-per-day mine.
• Warrants: Two outstanding warrants are expected to provide an additional USD $125 million within approximately 12 months (November 2026).
• Offtake Agreement: Ongoing competition for the sale of their flotation concentrate (110,000 ounces per year at 133 g/t pyrite concentrate) from 13 interested groups represents another potential source of capital to accelerate development.

Caribou Gold Project: Development and Production

• Feasibility Study: The feasibility study, published in April 2025, outlines a 5,000-ton-per-day mine producing 200,000 ounces of gold per year for the first five years, and 190,000 ounces per year for the subsequent 10 years, based on 2 million ounces of reserves.
• Production Timeline: Full production is targeted for 2028, with test work and commissioning commencing in 2027.
• Permitting: The project is fully permitted for 4,950 tons per day. Permitting for an expansion is underway with the BC government, with a request to be submitted this year.
• Underground Development: ODV is actively developing underground, with three drills operating and drifting towards the Cow Mountain deposit. This opens up an additional 3.5 kilometers of strike length, extending the ore body to 3.5-4.5 kilometers.
• Mine Plan: The current mine plan includes 27 kilometers of underground development over the next 28 months, with a budget of CAD $330 million for this work. This infrastructure is designed to access both existing reserves and newly identified resources.

Exploration and Resource Expansion

• Resource Base: The current resource includes 2 million ounces of reserves and 3.5 million ounces of measured, indicated, and inferred resources (1.61 million measured/indicated, 1.8 million inferred).
• At-Depth Drilling: Dedicated drills will focus on confirming continuity at depth, as the current resource is primarily within the first 350 meters, while drilling has reached 1,000 meters. This is expected to potentially uncover new discoveries.
• Prostine Target: A significant exploration target, 6 kilometers long and 1 kilometer wide, located down-trend from the Caribou Gold Project. Initial drilling will involve two drills, potentially ramping up to four to six. Winter conditions are considered optimal for work in this area.
• Strike Length: The Caribou ore body's strike length is now 3.5-4.5 kilometers. The company has only drilled 4.4 kilometers of an 83-kilometer mineralized trend, indicating substantial exploration potential.
• Ounces per Vertical Meter: The deposit exhibits an average of 15,000 ounces per vertical meter, contributing to low development costs.
• Drilling Strategy: ODV's platform is "drill twice, mine once," emphasizing thorough exploration. The company has a history of successful large-scale drilling programs.
• Reconciliation: Past projects, like Canadian Malartic, demonstrated strong reconciliation (3% after 12 years of mining), indicating the quality of ounces documented.

Production Scalability and Cost Efficiency

• Production Targets: The goal is to increase annual production from 200,000 ounces to 300,000-350,000 or even 400,000 ounces per year by converting existing resources.
• Mill Expansion: The existing mill has been engineered for expansion.
• Permitting for Expansion: The company aims to increase throughput from 4,950 tons per day to approximately 7,500 tons per day (a 50% increase), with a further potential expansion to 10,000-11,000 tons per day.
• Low AISC: The All-In Sustaining Cost (AISC) is projected at USD $1,157 per ounce, considered exceptionally low. This is attributed to:
  • Ounces per Vertical Meter: High ounces per meter of depth reduce development costs.
  • In-Situ Grade: An average in-situ grade of 11 g/t after 8,000 pierce points.
  • Longhole Mining: A low-cost, mechanized bulk mining method on 30-meter centers.
  • Gravity and Flotation Recovery: 46% recovery from gravity and 56% from flotation, with no cyanide used.
  • Paste Backfill: 60% of material is returned underground, minimizing surface footprint and waste disposal costs.
• Payback Period: The feasibility study indicates a payback period of 1.6 years. At current gold prices, the project is estimated to generate around CAD $650 million in free cash flow annually.
• Scalability Funding: The scalability to higher throughputs is expected to be self-financed through project cash flow.

Government Support and Jurisdictional Advantages

• BC Government Support: ODV has received strong support from the BC government, including a dedicated Minister of Mines who has prioritized the Oiscoco mining permit.
• Permitting Efficiency: The company experienced a relatively short permitting process in BC, attributed to strong First Nations partnerships (LCO, Dun, and Williams Lake) and government support.
• Infrastructure: The project benefits from proximity to infrastructure, being a 45-minute drive on pavement from the town of Quinnell and 1.5 hours from Prince George.
• Comparison to Quebec: The permitting process in BC is compared favorably to the company's experience in Quebec with Canadian Malartic.
• "Open for Business" Stance: The BC government has signaled a commitment to supporting mining development.

Other Projects and Market Outlook

• San Antonio Project (Mexico): ODV is observing developments, including Silver Tiger Metals' open-pit permit. The company has a 1.1 million ounce resource and a 5,000-ton-per-day crushing and screening plant for a heap leach project. Mexico's current economic climate is seen as needing to support mining.
• Tintic Project (Utah, USA): The project is generating small-scale production, with Q3 financials showing a profit of a couple of million dollars from mining operations. Development is ongoing underground, with the ramp reaching the 600-foot level. The project has five historic gold mines along a 5 km trend with 27 km of high-grade mineralization. Significant potential exists below the water table at 350 meters. The project also hosts 18 CRD (carbonate replacement deposit) mines rich in silver, lead, and zinc, and produces tellurium.
• Critical Minerals Market: While there's capital allocation to critical minerals, prices for metals like zinc, copper, and nickel have not seen significant increases to drive development. Gold and silver are leading the market.
• Gold Price Outlook: The CEO believes gold prices are more likely to move towards USD $4,000 than to USD $3,000.
• Investment Opportunity: Exploration and development companies are seen as having significant upside potential compared to producers and royalty companies.

Conclusion and Shareholder Value

Sean Rosen expresses strong optimism about Oiscoco Development's future, highlighting the project's scalability, low costs, and significant exploration potential. The company is fully financed and permitted for its initial production phase, with a clear path for expansion. The Caribou Gold Project is described as a "project for generations," with the potential for decades of production and growth. The CEO emphasizes the company's expertise in large-scale drilling and mine building, drawing parallels to past successes. The current stock valuation is considered undervalued, with significant upside potential projected by analysts.