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Osisko Gold to acquire Barkerville Gold in all-share deal valued at C$338M

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Osisko Gold to acquire Barkerville Gold in all-share deal valued at C$338M

Osisko Gold Royalties Ltd. entered into a definitive agreement to fully acquire Barkerville Gold Mines Ltd. through a plan of arrangement, with the planned share-exchange ratio implying a total equity value of about C$338 million on a fully diluted, in the money basis.

Osisko Gold holds about 32.6% of the outstanding Barkerville Gold shares. Under the deal, each Barkerville Gold shareholder will receive 0.0357 of an Osisko Gold share for each share held, implying consideration of 58 Canadian cents per share.

Barkerville Gold shareholders will hold about 9% of the outstanding Osisko shares upon closing, which is expected in November, according to a Sept. 23 release.

Osisko Gold Chair and CEO Sean Roosen said the company will take advantage of the combined exploration, permitting and development expertise to advance the C$402.2 million Cariboo gold project in British Columbia.

The company also agreed to provide Barkerville Gold with a six-month, C$7 million unsecured bridge loan to continue exploration and development at Cariboo, which may be increased to C$13 million, subject to the approval of both parties.

The Barkerville Gold board unanimously approved the arrangement and will recommend that shareholders vote in favor.

Concurrent to the deal, Osisko Gold announced the creation of a new project development platform, dubbed North Spirit Discovery Group, with the goal of privatizing and surfacing value in resource development projects.

The company recently entered into a letter of intent to acquire cash-strapped Stornoway Diamond Corp. with the help of Stornoway's secured creditors.