Osisko adds ground at Canadian Malartic (March 20, 2006)

Abitibi explorer Osisko Exploration (OSK-V, OSXLF-O) has concluded agreements with prospectors under which it will take over properties covering the Barnat, Sladen-Malartic, and East Malartic mines, all southeast of Malartic, Que.

The properties cover 11.6 sq. km immediately north of Osisko’s Canadian Malartic property, where Osisko is drilling a gold-porphyry system. East Malartic produced about 2.8 million oz., Barnat about 900,000 oz., and Sladen about 300,000 while in production; Barnat was the last of the three to close, in 1983.

The vendors get $1.2 million in cash, and two retain a 2.5% net smelter return on production from seven of the 16 claim blocks in the deal. Osisko has a right of first refusal on the royalty should the vendors ever sell it.

To finance the acquisition, Osisko is placing 600,000 shares priced at $1.80 each, and 300,000 attached warrants, exercisable at $2.25 for two years. The buyer is German investment fund Eurasia Holding, already a large institutional holder in Osisko.