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MONTREAL - Osisko Development Corp. (NYSE:ODV, TSXV: ODV) announced Friday it has closed a private placement raising approximately US$203 million to fund construction of its Cariboo Gold Project in British Columbia. The financing comes at a crucial time for the company, which according to InvestingPro data, has been rapidly burning through cash with a concerning current ratio of 0.39.
The financing consists of 99,065,330 units priced at US$2.05 per unit, comprising a US$120 million brokered placement and an US$83 million non-brokered placement. Each unit includes one common share and a half-warrant exercisable at US$2.56 until August 15, 2027. The stock has shown strong momentum, gaining nearly 83% over the past six months and currently trades near its 52-week high of $2.75.
The non-brokered portion includes a US$75 million investment from Double Zero Capital LP, giving the Delaware investment firm a 15.4% stake in Osisko Development on a non-diluted basis.
According to the company’s statement, proceeds will fund "the broadly distributed equity portion of the capital required to construct the Cariboo Gold Project and for general corporate purposes."
Osisko Development believes this financing, combined with a previously announced US$450 million project loan credit facility with Appian Capital Advisory Limited and potential arrangements with commodity traders seeking concentrate off-take, will provide sufficient funding to construct the project.
The underwriters for the brokered offering received a 4.5% cash commission, while Double Zero received a 4.0% investment fee settled in common shares.
Company insiders participated in the offering, subscribing for 628,000 units for gross proceeds of US$1,287,400.
All securities issued will have a four-month and one-day hold period under Canadian securities laws. The offering remains subject to final acceptance from the TSX Venture Exchange.
Double Zero and Osisko Development entered an investor rights agreement granting Double Zero rights to nominate one director to the company’s board, along with pre-emptive rights and top-up rights for certain acquisitions. With a market capitalization of $355 million and moderate debt levels, InvestingPro analysis reveals 8 additional key investment factors that could impact the company’s future performance. Subscribers can access detailed financial health metrics and exclusive insights about Osisko’s growth potential.
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