Osisko Metals

To discuss the opportunity at Gaspé Copper and the path forward. Thanks very much, and good afternoon, everybody. The Gaspé Copper project is really, I guess, the latest iteration of what we’ve done as a group over the last 23 years. So originally Sean Roose and Bob Wares and I started Osisko Mining Corporation, which we were forced to sell in 2014 after the hostile in Canadian Malartic. But what we’ve done over the years, if you look collectively at the ounces we defined and the ounces that have subsequently been defined and will be defined, I’m certain, at the Malartic complex, we’ve been responsible for the discovery of about 70 million ounces of gold or about a half a trillion dollars’ worth of new wealth creation.

This project we’re currently working on, Gaspé Copper, I think is going to be the largest scale new wealth creator, certainly one of the biggest ones that we’ve done ever. And I like to call it the Canadian Malartic of copper because there are so many similarities to what we did about 20 years ago with the Canadian Malartic project and the Gaspé Copper project. The current CEO is Bob Wares. I’m the Executive Chairman. Don Ngavan, who joined us in 2015, did most of the real work at Windfall, is our company President. These deposits that we’ve worked on and developed over the years are all now in the hands of significant large senior mining companies.

I like to joke around that when we started, Sean and I had a conversation about what type of company we’d like to be, and we emulated Agnico Eagle ’cause then we thought we could be the next intermediate mining company in Canada like Agnico Eagle. But as it turns out, Agnico Eagle is the next Agnico Eagle. They’ve done very well now and certainly are the standout in the gold business.

The Gaspé Copper project is really a repetition of what we’ve done over the years. Our operation playbook has been to go into existing mining camps and try and find things that people have overlooked, or maybe errors that were made, or just look at it with a different set of inputs using different metal prices. And this one particularly is interesting because it’s where Bob Wares started his career after he came out of McGill. He actually worked for Noranda in what was a 44-year mine life. He spent four years there in the early nineties re-logging all this historic drill core and then doing work underground and helped them, led them to the discovery of the second deeper porphyry, which we call DeepX.

And really, I remember when we were developing Canadian Malartic, to fast-forward a little bit, with Bob and Sean, and Bob kept talking to us about this Gaspé Copper project, and Sean and I kept saying, “Shut up. It’s copper, Bob. It’s not important.” But what Bob realized ultimately when he took this into what we called Osisko Metals after the takeover. I went and did Windfall. Sean carried on with the royalty company, and Bob did base metals. But he realized that there was an opportunity to repeat what we did at Canadian Malartic at the Gaspé Copper project. He was aware that there was a lot of disseminated mineralization that was understood to be there, but had just never been quantified.

Really, the bulk of the work we did at Canadian Malartic, because again, when we started, everyone knew there was about a gram everywhere, but nobody quantified it or took into account the change in metal prices, the change in technology that allowed you to mine at a larger scale. Bob just started that program when he acquired the property from Glencore and proved through a compilation of the old work and his new drilling that there was at least a half a billion tons at about 0.3% copper there, which was an interesting starting point. He did some more work and brought that up to 1.5 billion tons at about 0.3% copper, which is when after we sold Windfall to Gold Fields, we merged our two teams together, did a big financing in late 2024 and accelerated the program.

And our most recent resource and current resource in all categories, about 2.1 billion tons at about 0.3% copper. We’re finishing that work this year. We expect a resource update in November and then the final resource in March. So you don’t have long to wait for it, but we expect to end up somewhere between, call it 3.5 and perhaps 4 billion tons for the scale of the system. So this is truly a world-class copper system, low grade bulk tonnage, and again, what I like to refer to as the Canadian Malartic of copper.

The difference between this project and many of the other near-term copper projects is it comes with full infrastructure. Because it was an operational mine under Noranda for 44 years, there are roads that exist that we don’t have to build or permit. The deep sea all year round access port is in place. We don’t have to permit or build. The power corridor is in place. We don’t have to permit or build. And not to mention the cost. We’re probably saving something north of $2 billion of infrastructure cost.

But like Canadian Malartic, and again, it was always our method of operation as a group over the last couple of decades, the focus on existing mining camps saves you a lot of time from first drill hole to first pour, whether it’s gold or copper. Malartic from our first drill hole to our first gold pour was six years and one month on a billion-dollar mine build. It was an incredibly quick project, but that infrastructure allowed us to do it, and I think we’re gonna see that happen again here. What we’re currently projecting is production by 2031, 2032.

That most recent resource we put out earlier this spring gets us to the top of the pack. These are really the near-term development projects in the Americas, trading at higher multiples than we are, despite the fact that we have more contained copper. By the time we finish our current drill program, we should be something well north of 20 billion pounds of contained copper. But again, on that fabulous infrastructure, Québec also has the lowest power rates or certainly lower power rates compared to, say, BC, where traditionally most of the copper mining is done in Canada. We’re at 5.5 cents tariff L power versus 8 cents.

And this deposit’s got a probably superior strip ratio to the existing mines out there, which are all mining at a rate of about 4 to 1 strip or 5 to 1 strip. The current strip on our resource is about 1.5 to 1, and we expect that to go down to 1 to 1 by the time we finish our work. We own about 10% of the company. There is about 30% corporate ownership, Agnico Eagle, Hud Bay, Glencore, and Franco. This was an entirely retail-owned shareholder base about two years ago, and that’s flipped now to the point where it’s probably about 10% retail, and the balance is corporates or institutions. A lot of coverage on the company for any of you who want to look at some of the research work.

This slide shows the property as it stands today. There were about 150 million tons processed by Noranda, half of it from underground, half of it from open pit. Effectively, everything that you see in this slide will end up being in a large super pit, which is probably going to go about 4 kilometers long, kilometer at the lip and down to 900 meters of depth. The current resource in red, this is our global 2.1 billion tons. The green dots are the holes from last year. The yellow dots are newer holes from this year’s program, some in progress. And the dashed yellow line is the outline of the pit shell as it would be on that red resource.

But we’re finishing the drilling right now. Currently, we expect to be done by December. That white shape on the bottom is where we’re seeing great expansion of the deposit. We had more results out today. There’ll be a lot more out this fall. But we expect to add about half a billion to a billion tons from that area. It’s pit-shaped, shallow mineralization starts at surface, so there’s zero strip. And it’s shaping up to be the potential starter pit area at about 25% higher grade than the global 0.3%. So this starter pit area may end up as a 0.4 resource. And it’s the reason the strip drops because when blended with the rest of it, that brings the 1.5 to 1 strip down to 1 to 1.

A geological cross-section showing the porphyry, Copper Mountain porphyry, which was mined in a small open pit by Noranda. Effectively, what they were after, though, were what we call the C&E zones, or they called the C&E zones. These were high-grade zones up to over 100 meters wide of 1% to 2% copper. And it explains why the deposit was still there for us to be found and acquired. Noranda drilled in the light blue areas, which are calcareous sediments, which host the disseminated mineralization. But in the 90s and 80s, they weren’t interested in 0.3 material. It didn’t make sense at 65-cent copper.

So largely, though they knew that the disseminated material was there, most of the core was never assayed. We’ve done some re-assing of that, and certainly our program has been drilling it off, and this is where the bulk of the billions of tons come from. But the majority of their mining was by underground methods on the C&E zones, and about half came out of the open pit. It’s another recent section from some of our drill results. The shaded area is the pit on the current MRE. And just to show some of the numbers as we step out to the southwest and the expansion of the deposit. Ultimately, it’ll be deeper than this one and a larger pit.

This diagram shows the resource in green and yellow. This is the 2 billion ton global resource. The second porphyry was discovered starting with the work Bob did. He realized there was a second alteration zone that didn’t match the current porphyry. And Noranda drilled about 20 holes into this and defined approximately half a billion tons of 0.7% copper. There’s also moly and silver, so as an equivalent, that would be about a 1% number. Again, not interesting to them in the 90s when the price of copper was 65 cents. But now considering that we’re looking at a super pit that will go down to 900 meters, it about touches the top of this. So ultimately, at the end of the pit mine life, you’d be able to ramp into this and block cave it.

Some of the work we’re doing now suggests that the two are potentially connected. So we expect that with the drilling that we have ongoing right now with our DeepX program, that certainly will confirm and add some information to that half a billion tons of 0.7 and potentially get that up to somewhere between half a billion to a billion tons globally. So when we put that together with what we think we’ll end up with this 3 billion ton resource on the main pit, the system scale is about 4 billion tons. So what we’re looking at is a large long life mine.

Our throughput assumptions currently are at about 160,000 tons a day. We’re a smaller company. Certainly, I think if we were a larger copper miner, we wouldn’t bother. We’d start at somewhere like 220, 240. We will model those assumptions by the time we get to the PEA. And I suspect finally, once we finish the resource work, we’ll probably settle on a throughput number assuming something north of 200, which will mean that we will join the ranks. Instead of being a high tier two, we’ll actually be a tier one copper producer at north of 200,000 tons of copper per year.

Recoveries are good. There are 44 years of met test work done by Noranda, the 150 million tons. Our met work is confirming in the areas that they didn’t have met work from in the prusselanites, what we call the prusselanites, which are the silicified sediments that host the disseminated sulfide, coming in effectively the same as the recoveries from the general deposit.

We’ve had strong local support. The center picture is a shot of the minister and some of his group that came down the project last year, put out their own press release about their support for the opening of a new mine. We’ve been doing lots of consultations with the town of Murdochville. Murdochville was built by Noranda when they had the mine in operation from the ’50s until the ’90s. It was a purpose-built mine town. Much of the population’s moved away since the mine closed in the late ’90s. But there are approximately 400 homes in the town that we may, depending on the scale of the operation, be looking at having to do something with. It’s not certain until we come out with our PEA ultimately what the pit shell outline is gonna look like. But there is a consideration that some of the homes, similar to Malartic, may have to be moved out of the way.

Our timelines are complete the work by Christmastime, come out with that ultimate resource by the end of Q1 next year. So you don’t have to wait long to see what we decide is the ultimate scale of both the deposit and the throughput. The PEA will follow about four months post that. That allows us to file the project description, which is the official start of permitting. And on an ideal timeline, and everyone knows in the mining business everything works on an ideal timeline, we’d come out of permitting in late ’29, a couple of years to build. We’re estimating about a $5 billion capex right now. And then we’d be producing concentrates by the end of 2031, early 2032.

Again, it’d be about 35 B-train trucks down to the Port of Gaspé to ship what we estimated would be, in our low-case scenario, 500,000 tons of concentrate per year going to Glencore. Glencore, when we acquired the project, kept the full offtake, so we know, and as a benefit to us, what the offtake pricing looks like, and it’s a very standard agreement. At the rate of 500,000 tons of con per year, this is a 26% copper con and has silver and moly, we would, by our initial calculations, be netting about a billion dollars Canadian of free cash flow per year at about $4 copper, $4.50 copper. So at $5 copper, $6, $7 copper, it’s more than double what we saw as free cash flow coming from Canadian Malartic when we turned that operation on in 2011. Gives you a sense of the scale.

So as a group, we’ve done projects like this before in Québec. This is certainly larger, but we’ve done large truck, large shovel, large open pit operations. People forget that we ran Canadian Malartic for the first 1.2 million ounces as an operation before we were forced to sell it, so it is something we’re familiar with. We have a strong balance sheet pro forma. The rest of the warrants that come in from our original and only financing, about $154 million. And certainly, if our plans come through the way that we have them on paper right now, we’re going to be Canada’s largest copper producer in about six or seven years’ time. And certainly going into these old camps as a way to look at the projects has worked very well for Osisko in the past. This is really a repetition of what we did at Canadian Malartic 20 years ago, on a slightly larger scale. So at that point I’ll end my presentation. Thank you.

Great, thank you. And with that, we have a few minutes. Anybody questions? Thank you. Thank you, John.

New Brunswick? Ah, New Brunswick, yeah. About a week or so ago, we announced a spin-out of other properties that we have and we still currently have in Osisko Metals. It is a currently 100% owned subsidiary, and we announced that we were gonna go to market for $100 million financing and had a tremendous amount of interest, so we upsized the deal to $250 million. The properties in New Brunswick are largely properties that we staked. We optioned some others to fill out some gaps we had.

But really what that is, is an extension of the identical geology that hosts Gaspé, with hosting also identical Devonian age porphyries, and lots of indications of copper, disseminated low-grade copper around in both porphyries and sediments that if you took the rocks and some of the drill core that was done on maybe a dozen holes in the area over time, including some by Noranda while they were operating Gaspé Copper, and also not assayed, you wouldn’t be able to distinguish them from the Gaspé deposit. So it’s a target. It’s an exploration target, and the intent there is to go and do a large program to see if there is actually a porphyry hiding under this principal anomaly. But that anomaly is also one of 22 on the project. The rest of them have had no work.

And it’s funny, and we’ve seen this time and time again looking for new projects within the group, how exploration concepts tend to stop at provincial boundaries, but geology doesn’t, the potential doesn’t. So this is really just an untested extension of the belt that never saw any work for bulk tonnage porphyry deposits. But it’s understandable. Even Noranda, when they owned Gaspé, did not contemplate a very large throughput, like 150,000 ton a day operation. Xstrata, when they had it, drilled some holes, but they were, again, only looking for more high-grade C Zone and E Zone, and even Glencore, same thing. And none of the core they drilled really was assayed, or very little of it. So it took that experience with Canadian Malartic where it was, well, what if it all is 0.3 and how much is there? And copper price has not hurt. But yeah, that’s New Brunswick.

Time for one more. Yeah.

The question is how does it benefit Osisko Metals shareholders? Quite simply, Osisko Metals will retain approximately 10% of the new company. So should we find something, and even if we don’t, it allows the company to mark-to-market what the value of those shares are, which right now, I would argue, are worth nothing. And it’s happened to us time and again with our group companies. When you define the world-class deposit, everything else in your portfolio gets valued as nothing. And then ultimately, unfortunately, and fortunately in some cases, what’s happened is if you end up in an M&A discussion and your company is sold, those assets travel to the new acquirer for nothing. So you as a shareholder, and remember we’ve always been big shareholders of our companies, you get no benefit from it.

So perhaps it’s a little bit of preemptive thinking, but it’s something that we’ve done repeatedly and successfully with the other companies in the past. And certainly it allows us to retain the focus at Gaspé on Gaspé, while this other new company goes and does that exploration work. And that’s pretty much it.

Great. Thank you.

And just as a final word, the prime example was when we were forced to sell Canadian Malartic, we also sold Odyssey and Upper Beaver and Hammond Reef and all these other things which, we sold the company for $4.3 billion in 2014, and I think last quarter Agnico made 4.3 billion on Canadian Malartic. These were things where tremendous value was left behind because they went in a sale vehicle. So, yeah. Thank you, everyone. Thank you. [audience applauding]