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Investing.com -- RBC (TSX:RY) Capital Markets has upgraded shares of Osisko (TSX:OSK) Development Corp (TSXV:ODV) to Outperform, citing reduced development risk at its flagship Cariboo project in British Columbia and imminent catalysts that could support a valuation re-rating. The upgrade comes despite underperformance in ODV shares over the past three years, as permitting, execution, and financing challenges weighed on sentiment.
Analyst Harrison Reynolds has assumed coverage of the stock and believes sentiment could now improve following the completion of a feasibility study, streamlined development plans, and secured permits. Cariboo is considered “shovel-ready and waiting to be built,” with the feasibility study outlining an average annual production of 180,000 ounces at approximately $1,200 per ounce all-in sustaining cost over a 10-year reserve life.
The critical next step for the company is securing project financing, with RBC modeling a C$650 million debt facility and C$300 million equity raise to fund construction. The firm expects financing by the end of 2025, enabling first gold production roughly two years later, which would align with management’s timeline of late 2027.
RBC values the Cariboo asset at US$1.8 billion based on only its reserves, and as much as US$2.5 billion factoring in the broader resource inventory, which could extend the mine life by over a decade. The bank sees strong upside if resource conversion and exploration potential at depth are further realized, describing the project as both scalable and well-advanced.
In addition to potential organic growth, RBC highlighted Cariboo as a likely target for acquisition. “We view Cariboo as an attractive acquisition target as a permitted project in a safe jurisdiction with potential upside from mine life extension and/or capacity expansion,” Reynolds wrote in the note.
Despite Osisko Development’s progress, the company continues to trade at a steep discount to peers. Its current valuation implies only 0.2x price-to-spot NAV and 0.3x based on Cariboo alone, compared to 0.3x and 0.8x among emerging and growth producers, respectively.
RBC’s price target of C$5.00 per share is based on 0.8x NAV, reflecting upside of 99% from current levels. The firm believes an inflection point could come as financing clarity emerges and progress continues on a bulk sample program scheduled for the second half of this year.
While Cariboo remains the central investment thesis, the Trixie deposit in Utah offers additional optionality, though analysts do not view it as core to the story. In RBC’s view, Osisko Development offers underappreciated leverage to rising gold prices and could re-rate meaningfully as the financing overhang is cleared and M&A dynamics intensify.