Osisko Metals surges on C$32.5M investment for Gaspé

Osisko Metals (TSX: OM) is set to receive a C$32.5 million investment boost from big names in the industry to support its development of the Gaspé copper project in Quebec.

Osisko is to issue around 67.66 million common shares priced at C48¢ each under a private placement, the company reported Wednesday. Several high-profile Canadian mining companies are expected to participate, including Hudbay Minerals (TSX, NYSE: HBM), Agnico Eagle Mines (TSX, NYSE: AEM) and Franco-Nevada (TSX, NYSE: FNV).

Hudbay, in particular, is expected to acquire over 29 million shares – representing 4.3% of those outstanding post completion of financing — and become a first-time investor in the company. Agnico and Franco-Nevada also plan to buy 26 million and about 4.16 million shares,  respectively. An unnamed institutional investor would buy the remaining 8.33 million shares, Osisko said.

“We are pleased to welcome Hudbay Minerals as a new significant shareholder of Osisko Metals. We also appreciate the continued participation of Agnico Eagle and two of our existing principal and strategic shareholders,” Osisko Metals CEO Robert Wares said in a release.

Osisko Metals’ stock surged more than 12% to a near 52-week high of C55¢ following the announcement. This gives the company a market capitalization of about $330.7 million.

Funding for Gaspé

The funding, said Osisko, will be used to advance its flagship Gaspé Copper project in eastern Quebec, which it hails as the largest copper project in the eastern part of North America. Work planned includes drilling, permitting and technical studies.

The property, located near Murdochville on the Gaspé Peninsula, is the site of a former Noranda mine. Osisko acquired the project from Glencore in July 2023 and has put a plan in place to reboot the historic mine by the early 2030s.

According to Wares, the Gaspé mine – backed by federal and provincial support and full offtake rights secured by Glencore – could start producing roughly 500,000 tonnes a year of copper concentrate around 2032.

Currently, the company is working to upgrade the deposit’s resource ahead of a preliminary economic assessment next year. At the moment, Gaspé has 824 million indicated tonnes grading 0.27% copper, for 2.23 million tonnes of contained copper, plus another 670 million tonnes inferred grading 0.3% copper for 1.99 million tonnes of copper.