Sable Resources Ltd. said Aug. 29 that it entered into an equity subscription agreement and an investment agreement with Osisko Gold Royalties Ltd. for a total of some C$12.6 million over four years, to progress exploration objectives including at the Vinata silver project in Mexico.
Osisko subscribed for 16 million Sable units at 13 Canadian cents apiece on a non-diluted basis, for C$2.1 million. Each unit is composed of 1 common share and half of a share purchase warrant. Each warrant allows Osisko to purchase an additional Sable share within three years at 21 cents apiece. The subscription gave Osisko a 9.86% stake in Sable.
The two companies will also enter into a royalty purchase agreement, which will allow Osisko to acquire a 1% net smelter royalty on properties controlled by Sable's wholly owned subsidiaries in Mexico, for C$5 million. The royalty will extend to any additional properties acquired by the company within four years.
Sable will also grant Osisko the right to acquire an additional 1% net smelter royalty for C$5.5 million on all minerals produced from initial and future properties, which will expire on the maturity date.
Osisko will have a right of first refusal over any royalty, stream or similar right in Sable properties, and an equity participation right to maintain pro rata ownership interest and the right to nominate one person to Sable's board of directors as long as Osisko owns over 5% of Sable.
