Eagle Gold Mine Operations Update
Osisko Gold Royalties (OR) has reported that its partner, Victoria Gold Corp., experienced a failure at the heap leach pad of the Eagle Gold Mine in Yukon Territory. Operations have been temporarily suspended while the situation is assessed. Infrastructure damage has occurred, and some material has left containment, though no injuries were reported. Osisko holds a 5% NSR royalty on Eagle until 97,500 ounces of gold are delivered, and a 3% NSR royalty thereafter. The royalty covers the entire Dublin Gulch property, including Eagle, Olive ore deposits, and key exploration targets. Osisko is closely monitoring the situation and maintaining communication with Victoria.
- No injuries were reported during the heap leach pad failure.
- Osisko's royalties on Eagle Gold Mine cover the entire Dublin Gulch property.
- Operations at Eagle Gold Mine have been temporarily suspended.
- There has been infrastructure damage at the Eagle Gold Mine.
- Some material has left containment following the heap leach pad failure.
Insights
The announcement of a failure in the heap leach pad at the Eagle Gold Mine is significant for several reasons. Heap leaching is a critical process for extracting gold from ore and any disruption in this process can have a substantial impact on production levels. Given that Osisko Gold Royalties holds a 5% NSR royalty on the Eagle Gold Mine until 97,500 ounces of gold are delivered and a 3% NSR royalty thereafter, this event could reduce expected royalty revenues in the short-term. The immediate suspension of operations indicates that the issue is severe enough to require a halt in production to assess and repair the damage.
In the mining sector, infrastructure failures such as this can lead to significant delays and unexpected costs. The potential for environmental impact, given that a portion of the failure has left containment, could also result in regulatory scrutiny and additional operational costs. While no injuries were reported, which is positive from a safety standpoint, the financial implications for both Victoria Gold Corp. and Osisko, as a royalty holder, could be notable. Investors should closely monitor updates from Victoria regarding the extent of the damage and the expected timeline for resuming operations.
In the long term, if the damage is extensive, there might be delays in achieving the production targets, which could affect the overall return on investment for Osisko. Stakeholders should also consider the potential for increased operational costs and the impact on future cash flows from the mine.
From a financial perspective, the temporary suspension of operations at the Eagle Gold Mine due to infrastructure failure has immediate implications for revenue streams. Osisko Gold Royalties’ financial health is partly tied to the performance of its royalty assets. A reduction in gold production at the Eagle Mine could lead to a shortfall in anticipated royalty revenue, particularly during the period of suspension. Given the fixed nature of the NSR royalty at 5% until 97,500 ounces and 3% thereafter, any delay in production directly impacts the royalty accrual rate.
Moreover, the need for Victoria to assess and potentially repair the heap leach pad will incur costs, which might reflect in their financial statements and indirectly affect Osisko if operational costs are passed on through reduced profitability. Investors should review Osisko’s balance sheet and cash flow statements to assess their ability to absorb potential short-term revenue disruptions. Conservative financial planning and reserves are vital in mitigating such unforeseen operational risks.
In terms of stock market impact, this news might lead to a short-term decline in share prices for both Victoria Gold Corp. and Osisko Gold Royalties, as investors react to the uncertainty and potential financial implications. Investors should be cautious and consider the broader financial health and risk management strategies of Osisko in their investment decisions.
The failure of the heap leach pad at the Eagle Gold Mine raises environmental concerns, particularly because a portion of the failure has left containment. Heap leach pads are used to extract gold from ore using chemicals like cyanide, which can be hazardous if not properly contained. Environmental risks include potential contamination of surrounding land and water bodies, which could lead to regulatory fines and remediation costs. These environmental liabilities can be financially burdensome and could affect public perception and stakeholder confidence in both Victoria Gold Corp. and Osisko Gold Royalties.
Regulatory bodies may enforce stricter environmental compliance measures following this incident, potentially leading to higher operational costs and more stringent monitoring requirements. Investors should consider the environmental track record of the Eagle Gold Mine and the potential for increased regulatory oversight when evaluating the long-term viability and risk profile of their investments in these companies.
It's also important to consider the impact on local communities and biodiversity, which could have broader socio-economic implications. Companies with strong environmental management practices tend to fare better in the long term, making environmental performance an essential component of investment analysis.
MONTRÉAL, June 25, 2024 (GLOBE NEWSWIRE) -- Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX & NYSE) notes that its operating partner, Victoria Gold Corp. (or “Victoria”), announced yesterday that the heap leach pad at its Eagle Gold Mine (“Eagle”) in the Yukon Territory experienced a failure. Eagle operations have been temporarily suspended while Victoria continues to assess the situation. At this early stage, it has been confirmed by Victoria that there has been some damage to infrastructure and a portion of the failure has left containment. There have been no injuries to personnel associated with the incident. Osisko is monitoring the situation closely and plans to maintain an open line of communication with Victoria as more information becomes available. Osisko holds a
For more detailed information, please refer to Victoria's press release dated June 24, 2024.
About Osisko Gold Royalties Ltd
Osisko Gold Royalties Ltd is an intermediate precious metal royalty company which holds a North American focused portfolio of over 185 royalties, streams and precious metal offtakes, including 19 producing assets. Osisko’s portfolio is anchored by its cornerstone asset, a 3
Osisko’s head office is located at 1100 Avenue des Canadiens-de-Montréal, Suite 300, Montréal, Québec, H3B 2S2.
| For further information, please contact Osisko Gold Royalties Ltd: | |
| Grant Moenting Vice President, Capital Markets Tel: (514) 940-0670 #116 Mobile: (365) 275-1954 Email: gmoenting@osiskogr.com | Heather Taylor Vice President, Sustainability & Communications Tel: (514) 940-0670 #105 Email: htaylor@osiskogr.com |
Forward-looking statements
Certain statements contained in this press release may be deemed “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking statements are statements other than statements of historical fact, that address, without limitation, future events, production estimates of Osisko’s assets (including increase of production), and in particular production at Victoria Gold’s Eagle Gold mine, timely developments of mining properties over which Osisko has royalties, streams, offtakes and investments, management’s expectations regarding Osisko’s growth, results of operations, estimated future revenues, production costs, carrying value of assets, ability to continue to pay dividend, requirements for additional capital, business prospects and opportunities future demand for and fluctuation of prices of commodities (including outlook on gold, silver, diamonds, other commodities) currency markets and general market conditions. In addition, statements and estimates (including data in tables) relating to mineral reserves and resources and gold equivalent ounces are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates will be realized. 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 variations (including negative variations), or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, most of which are beyond the control of Osisko, and actual results may accordingly differ materially from those in forward-looking statements. Such risk factors include, without limitation, (i) with respect to properties in which Osisko holds a royalty, stream or other interest; risks related to: (a) the operators of the properties, (b) timely development, permitting, construction, commencement of production, ramp-up (including operating and technical challenges), (c) differences in rate and timing of production from resource estimates or production forecasts by operators, (d) differences in conversion rate from resources to reserves and ability to replace resources, (e) the unfavorable outcome of any challenges or litigation relating title, permit or license, (f) hazards and uncertainty associated with the business of exploring, development and mining including, but not limited to unusual or unexpected geological and metallurgical conditions, slope failures or cave-ins, flooding and other natural disasters or civil unrest or other uninsured risks; (ii) with respect to external factors: (a) fluctuations in the prices of the commodities that drive royalties, streams, offtakes and investments held by Osisko, (b) fluctuations in the value of the Canadian dollar relative to the U.S. dollar, (c) regulatory changes by national and local governments, including permitting and licensing regimes and taxation policies; regulations and political or economic developments in any of the countries where properties in which Osisko holds a royalty, stream or other interest are located or through which they are held, (d) continued availability of capital and financing and general economic, market or business conditions, (e) responses of relevant governments to infectious diseases outbreaks and the effectiveness of such response and the potential impact of such outbreaks on Osisko’s business, operations and financial condition; (iii) with respect to internal factors: (a) business opportunities that may or not become available to, or are pursued by Osisko or (b) the integration of acquired assets, (c) the determination of Osisko’s PFIC status (d) Osisko’s ability to deliver on its climate strategy. The forward-looking statements contained in this press release are based upon assumptions management believes to be reasonable, including, without limitation: the absence of significant change in the Corporation’s ongoing income and assets relating to determination of its Passive Foreign Investment Company (“PFIC”) status; the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated or intended and, with respect to properties in which Osisko holds a royalty, stream or other interest, (i) the ongoing operation of the properties by the owners or operators of such properties in a manner consistent with past practice and with public disclosure (including forecast of production), (ii) the accuracy of public statements and disclosures made by the owners or operators of such underlying properties (including expectations for the development of underlying properties that are not yet in production), (iii) no adverse development in respect of any significant property, (iv) that statements and estimates relating to mineral reserves and resources by owners and operators are accurate and (v) the implementation of an adequate plan for integration of acquired assets. All forward-looking statements contained in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.
For additional information on risks, uncertainties and assumptions, please refer to the most recent Annual Information Form of Osisko filed on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov which also provides additional general assumptions in connection with these statements. Osisko cautions that the foregoing list of risk and uncertainties is not exhaustive. Investors and others should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Osisko believes that the assumptions reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be accurate as actual results and prospective events could materially differ from those anticipated such the forward-looking statements and such forward-looking statements included in this press release are not guarantee of future performance and should not be unduly relied upon. These statements speak only as of the date of this press release. In this press release, Osisko relies on information publicly disclosed by other issuers and third parties pertaining to its assets and, therefore, assumes no liability for such third-party public disclosure. Osisko undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.
FAQ
What happened at Eagle Gold Mine as reported on June 25, 2024?
How is Osisko Gold Royalties affected by the Eagle Gold Mine failure?
Were there any injuries reported at the Eagle Gold Mine incident?
What is the impact of the heap leach pad failure at Eagle Gold Mine?
