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Wednesday, February 22, 2017 Derek Macpherson

Osisko Gold Royalties to Invest C$15.2 Million in IDM


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IDM Mining Ltd. (TSXV:IDM) announced a private placement with Osisko Gold Royalties Ltd. (TSX:OR, NYSE:OR) for C$15.248 million which should provide IDM the necessary funds to move its Red Mountain project to a production decision along with allowing for a significant 2017 exploration program. The financing was a combination of flow-through shares that are priced at a 61.3% premium to the prior day’s close (41 million shares at C$0.25 for gross proceeds of C$10.250 million) and common shares that are priced at a 9.7% premium to the prior day’s close (29.4 million shares at C$0.17 for gross proceeds of C$4.998 million). As a result of the transaction Osisko Gold Royalties would own ~19.9% of IDM on a non-diluted basis. In conjunction with the financing, Osisko will be granted certain preemptive rights in respect to the acquisition of royalties or streams from the Red Mountain project. The transaction is expected to close on March 1st. This should provide IDM the balance sheet flexibility to advance the Red Mountain project to a production decision and fund a significant exploration program in 2017. IDM trades at a discount to peers on a P/NAV basis (0.39x vs. peers at 0.56x) and on a per ounce basis (C$41/oz vs. peers at C$57/oz). We expect the pending feasibility study for Red Mountain, coupled with the project’s ongoing de-risking (engineering and permitting), should help close the valuation gap to peers.



Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
 
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Company Specific Disclosure Details
IDM Mining Ltd. - TSXV:IDM - 1,2,3,4
Osisko Gold Royalties Ltd. - TSXV:OR, NYSE:OR - None

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