Investors cheer Sprott, Osisko, Barkerville deal
After the market close on Monday Osisko Mining (TSE:OSK) announced that it had entered into a purchase agreement with a company controlled by mining financier Eric Sprott to acquire 50 million shares of Barkerville Gold Mines (BGM-V).
The 50 million shares represent roughly half of Sprott's 36% stake in Vancouver-based Barkerville. Following the transaction, Osisko would own 17% of Barkerville, which is advancing the Cariboo gold project in central BC.
Barkerville will pay $20 million in cash for 25 million shares, and will issue 8,097,166 common shares of Osisko Mining at $2.47 a share for the remaining 25 million shares, valuing Barkerville at some $0.80 per.
Barkerville shares added 7.3% on the TSX Venture Exchange in midday trade exchanging hands for $0.73 a share for a market valuation of $214 million. Like many of its peers Barkerville is enjoying a spectacular 2016 with a year-to-date surge of 180%.
Osisko stock also received a bump gaining nearly 5% on the TSX for a market capitilization of $307 million. The Toronto-based company's flagship asset is the Windfall Lake gold deposit located in Quebec.
In March last year Barkerville updated the resource estimate for its Cow Mountain project outlining indicated resources totalling 2.8 million ounces of gold at an average grade of 2.4 g/t. Inferred resources total 2 million ounces at 2.3 g/t.
Barkerville is currently completing a 30,000m drilling program and hopes to start small scale mining on its massive 1,177 square km Cariboo land position which includes six past producing mines early next year as it advances Cow Mountain to feasibility stage.