Investorideas.com

Call 800 665 0411 to learn about our services

Search   Follow Investorideas on Twitter   Investorideas is on Facebook   Investorideas is on Youtube   Investorideas is on Pinterest  Investorideas is on stocktwits   Investorideas is on tumblr   Investorideas is on LinkedIn   Investorideas Instagram   Investorideas Telegram   Investorideas Gettr   Investorideas RSS



Share on StockTwits

Firm to Gain Mining Royalty on Project in Ecuador for $50M

Source: Source: Kerry Smith

 

November 15, 2022 (Investorideas.com Newswire) The acquisition is a 0.6% net smelter return royalty on production that is estimated to start at this copper-gold property in late 2029, noted a Haywood Securities report.


Osisko Gold Royalties Ltd. (OR:TSX; OR:NYSE) agreed to acquire a 0.6% net smelter return (NSR) royalty on SolGold's Cascabel copper-gold property in northeastern Ecuador for a US$50 million (US$50M) financing package, reported Haywood Securities analyst Kerry Smith in a November 7, 2022 research note.

Osisko's investment will be used to continue advancing Cascabel, including the Alpala project.

Osisko's acquisition "is accretive and in line," Smith wrote. "At US$1,500 per ounce gold and US$2.50 per pound copper, we estimate a seven-year payback and a 5% internal rate of return."

Based on the Q2/22 prefeasibility study (PFS) of Cascabel's Alpala, with the NSR royalty, Osisko would get about 7,600 gold equivalent ounces (GEOs) annually through the first 10 years of production and roughly 4,700 GEOs annually over the mine's estimated 26-year life. The PFS, however, only includes 21% of Alpala's current Measured and Indicated resources.

As far as a timeline to production for Alpala, a PFS update to include ways to optimize the project is expected by the end of this year, and a definitive feasibility study is to follow by year-end 2023, relayed Smith.

Initial production at Alpala is forecasted for late 2029. If production has not started by 2030, however, under the NSR, SolGold will pay Osisko a minimum of US$4M per year from 2030 to 2039.

For four years after the deal's closing date, SolGold may buy back one-third of Osisko's NSR.

Smith noted that Cascabel's Alpala deposit has a world-class reserve of 558,000,000 tons of 0.58% copper and 0.52 grams per ton gold.

In addition, "the project and the surrounding land package have tremendous resource upside, and this will likely be a multidecade mine, likely ultimately owned by a major copper producer," indicated Smith.

Ownership and Coverage

Currently, BHP and Newcrest Mining each own 13% of SolGold, and another royalty firm, Franco-Nevada, acquired a 1% NSR royalty on Cascabel for US$100M in 2020.

Osisko is covered by Adrian Day of Adrian Day Asset Management and, as said above, Haywood Securities analyst Kerry Smith. Click "See More Live Data" in the data box above to read more of what they are saying.

Smith reiterated Haywood's Buy recommendation and CA$25 per share target price on Osisko Gold Royalties, noting it "continues to add to its royalty portfolio and continues to track well along its plan to grow about 45% in the next five years."

Osisko is now trading at about CA$17.00 per share.

Disclosures:

1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures For Haywood Capital Markets, Osisko Gold Royalties, November 7, 2022

Analyst Certification: I, Kerry Smith, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer's shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures: Of the companies included in the report the following Important Disclosures apply:

Haywood Securities, Inc. has reviewed lead projects of this company and a portion of the expenses for this travel may have been reimbursed by the issuer.

Haywood Securities Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for this company in the past 12 months.

More Info:

Investorideas.com Newswire

This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders


Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.

More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com

Global investors must adhere to regulations of each country. Please read Investorideas.com privacy policy: https://www.investorideas.com/About/Private_Policy.asp







Gold Mining Stocks - Gold Mining Stocks Directory, Gold Stocks News, Research and Resources

Gold-MiningStocks.com - investing ideas in gold and mining stocks

Like Gold Stocks? View our Gold / Mining Stocks Directory

Get News on Mining Stocks