Osisko Mining Corporation

Osisko Mining Corporation

November 13, 2009 10:35 ET

Osisko Options Goldboro Gold Property From Orex Exploration

MONTREAL, QUEBEC--(Marketwire - Nov. 13, 2009) - Osisko Mining Corporation ("Osisko")(TSX:OSK)(FRANKFURT:EWX) is pleased to announce that it has signed an Option and Joint Venture Agreement (the "Agreement") with Orex Exploration Inc. ("Orex")(TSX VENTURE:OX) of Montreal for the Goldboro gold property. Osisko has a working right and exclusive option to acquire up to a 60% undivided interest in Orex's Goldboro gold property and surrounding claims located in northeastern Nova Scotia (collectively, the "Property") under the following terms:

- Upon signing of the Agreement, Osisko will close a subscription in the capital stock of Orex of 13,000,000 Units at a price of $0.10 per Unit, for gross proceeds of $1,300,000. Each Unit consists of one common share and one transferable common share purchase warrant. Each transferable common share purchase warrant entitles its holder to acquire one common share for $0.125 for a period of three years.

- In order to acquire a 50% undivided interest in the Property on or before September 29, 2013 (the Initial Option), Osisko shall incur exploration and development expenditures:

a) In the amount of at least $1,500,000 on or before September 29, 2010;

b) In the aggregate amount of at least $3,500,000 on or before September 29, 2011; and

c) In the aggregate amount of at least $8,000,000 over the following two years, that is, on or before September 29, 2013.

- Osisko may, at its sole discretion, accelerate and apply exploration and development expenditures to future years' expenditures and, accordingly, the Initial Option may be exercised sooner.

- Osisko shall solely fund a prefeasibility study to earn an aggregate 60% interest (that is, an additional 10% interest) in the Property on or before September 29, 2015.

Between now and up to September 29, 2015 (the Option Period), Osisko will be the manager of the project. A management committee will be formed during the Option Period with two representatives from each party. This management committee will be responsible for reviewing programs submitted by Osisko and for approving and evaluating the results of all programs. In the event of a tie, Osisko shall have the casting vote during the Option Period. Upon acquiring a 50% or a 60% interest in the Property, a joint venture would be formed between Osisko and Orex.

Robert Wares, Executive Vice-President and COO of Osisko, stated, "The Goldboro gold property offers potential for a bulk minable gold deposit located on a geological structure that has traditionally been mined by underground methods in Nova Scotia. This structure will be drill tested over a 2.5 kilometre strike length to a depth of 200 metres, with the objective of significantly increasing the gold resource that has currently been estimated by Orex."

The common shares of Orex acquired by Osisko represent approximately 8.4 %, of the outstanding common shares of Orex before giving effect to the exercise of the warrants and approximately 15.5 % of the outstanding common shares of Orex after giving effect to the exercise of the warrants acquired by Osisko (but before the exercise of any other warrants or convertible securities of Orex). Osisko has acquired the common shares and warrants of Orex for investment purposes. Osisko has no present intention to increase its holdings in Orex although it will evaluate the investment in Orex and whether to increase or decrease its shareholdings in response to market conditions, the business and prospects of Orex and other factors.

The private placement was exempt from the prospectus and registration obligations as it was for an amount greater than $150,000. A copy of the early warning report to be filed in connection with this transaction may be obtained from the secretary of Osisko at (514) 735-7131.

Osisko Mining Corporation is currently developing the Canadian Malartic gold deposit and evaluating adjacent areas for a large-scale open pit, bulk-tonnage mining operation. The Canadian Malartic deposit currently represents one the biggest gold reserves in Canada for a single deposit, and is still growing through ongoing drilling on new mineralized zones. Current reserves for the Canadian Malartic property are 6.28 million ounces, plus (including the Barnat deposit) a measured and indicated resource of 3.65 million ounces and an inferred resource of 0.84 million ounces. Mr. Robert Wares, P. Geo. and Executive Vice-President of Osisko, is the Qualified Person who has reviewed this news release and is responsible for the technical information reported herein.

Cautionary Notes Concerning Estimates of Mineral Resources

This news release uses the terms measured, indicated and inferred resources as a relative measure of the level of confidence in the resource estimate. Readers are cautioned that mineral resources are not economic mineral reserves and that the economic viability of resources that are not mineral reserves has not been demonstrated. In addition, inferred resources are considered too geologically speculative to have any economic considerations applied to them. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except for Preliminary Assessment as defined under NI 43-101. Readers are cautioned not to assume that that further work on the stated resources will lead to mineral reserves that can be mined economically.

Forward Looking Statements

Certain statements contained in this press release may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Corporation expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, including, without limitation that all technical, economical and financial conditions will be met in order to put the Canadian Malartic Project into commercial production, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include gold prices, access to skilled consultants, mining development and mill production personnel, results of exploration and development activities, the Corporation's limited experience with production and development stage mining operations, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment, timeliness of government approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations market prices, continued availability of capital and financing and general economic, market or business conditions. These factors are discussed in greater detail in the Corporation's most recent Annual Information Form filed on SEDAR, which also provides additional general assumptions in connection with these statements. The Corporation cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the Corporation's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

Contact Information

  • Osisko Mining Corporation
    John Burzynski
    Vice-President Corporate Development
    Osisko Mining Corporation
    Sylvie Prud'homme
    Investor Relations
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