Osisko Development, O3 Mining create Quebec-focused lithium spinoff

James Bay, Northern Quebec. Stock image.

Canadian gold developers Osisko Development (NYSE: ODV, TSXV: ODV) and O3 Mining (TSXV: OIII, OTCQX: OIIIF) have joined to create a premier lithium exploration company focused on various properties located in the James Bay region of Québec.

The new company – called Electric Elements Mining Corp. – will hold all of Osisko’s interests in its James Bay properties plus O3’s rights to the Éléonore Opinaca property. After its formation, Osisko and O3 respectively owned 80% and 20% of Electric Elements’ shares.

The James Bay properties cover prospective grounds totalling 186,000 square kilometres near Newmont’s Éléonore mine. Osisko obtained the properties in 2015 with its acquisition of Virginia Mines. To date, over $50 million have been invested with several drill-ready targets identified.

The Éléonore Opinaca project is located approximately 320 kilometres north of the town of Matagami, comprising 79 claims totaling 4,131 square kilometres in two separated blocks. The property is also accessible by road to the Éléonore gold mine.

By spining out these assets to create Electric Elements, both Osisko and O3 can continue to focus on their respective primary businesses of developing their respective material gold properties, the companies said in a statement.

Subsequent to the spinout, Electric Elements completed an equity financing of C$0.50 per share to raise gross proceeds of just over C$4.1 million, which will be used to fund exploration activities on the newly acquired properties.

After giving effect to the financing, Osisko and O3′ shareholding would be diluted down to approximately 47% and 12%, respectively, with the remaining 41% to be held by new subscribers.