As per the terms of the agreement, Appian will invest up to $74m to acquire a 60% stake in the project holding company Pine Point Mining at a pre-money valuation of $67.5m
Osisko Metals has signed an investment agreement with a subsidiary of Appian Natural Resources Fund III to form a joint venture (JV) to advance the Pine Point lead-zinc project in Northwest Territories, Canada.
Appian Natural Resources Fund III is a fund advised by Appian Capital Advisory, a London-based private equity group.
Osisko Metals is a Canadian exploration and development company.
As per the terms of the agreement, Appian will invest up to C$100m ($74m) to acquire a 60% stake in the project holding company Pine Point Mining at a pre-money valuation of C$91.3m ($67.5m). The investment will be made over an estimated four-year period.
Appian’s investment will include about C$75.3m ($55.6m) funding to establish the JV and advance the Pine Point project towards a final investment decision (FID) or construction approval.
The remaining C$24.7m ($18.2m) to be paid in cash comprises an initial payment of C$8.3m ($6.1m) upon closing of the transaction to acquire an initial 9% stake in the project and a C$16.4m ($12.1m) upon positive FID.
Besides, Appian has committed to make an investment of C$5m ($3.7m) in the common shares of the Canadian exploration and development company upon closing the transaction.
Located about 60km east of the town of Hay River, the Pine Point lead-zinc project is an assemblage of more than 50 open-pit and underground mines.
Osisko Metals chairman and CEO Robert Wares said: “The Transaction allows us to leverage Appian’s extensive mine development experience and includes a crucial investment of C$75 million into the Project that will advance the development of Pine Point to a “shovel-ready” status.
“This funding is expected to cover all costs including final definition drilling, additional exploration drilling, feasibility, environmental assessment and permitting, including Indigenous engagements.
“This joint venture, coupled with Appian’s significant cash payments to Osisko Metals and C$5 million equity investment, will allow Osisko Metals to focus on the development of other projects while avoiding excessive dilution to advance the Pine Point Project.”