‘Highest-grade discovery in all of Quebec’— Osisko Development’s CEO Sean Roosen on Windfall project

Kitco mining's special coverage of the rule Symposium natural resource investing is brought to you by G mining Ventures [Music] maker and a key figure in the royalties and development space we are sitting down and talking with Sean rusen of the Cisco group hello and welcome to Kiko mining here at the rule Symposium in Boca Raton Florida Sean welcome to Kitco it's really really great to be here we're really pleased to have you on a lot of things to talk about obviously the Cisco group is very well known you've got several companies hopefully we can dig into each one of those a little bit today let's start with a Cisco Mining and and the windfall project that's been the latest real big announcement out of the group earlier this year you announced a joint venture with Goldfield which includes a 300 million dollar initial payment that was in May um I think that surprised many people what's the thinking behind doing a joint venture rather than perhaps an outright sale with goldfields well shout out to John Brzezinski who's the chairman and the CEO of the company it's done an exceptional job uh you drilled off the the resource there uh over 2 million meters of drilling into the project outlined one of the more exceptional deposits in the history of Quebec I believe it's the highest grade Discovery in all of Quebec it's about 10 grams per ton of grams so you outline 4.1 million ounces of measured indicated and another three million ounces over and above that uh the deal at goldfields I thought was a spectacular deal you know again it hats off to John and his team they really did a great job so it's about a 1.2 billion dollar financing with 600 million dollars crossing over to the osk Cisco mining side and then the provides the backbone to build a 3 400 ton a day mine at windfall which is about a four hour drive north of valdor so very much sort of mid Mid North if you will for the Quebec standards access to grid power it's on the road one of the more exceptional projects in the golf space especially in North America thank you now as you say win food's a standout asset in in the gold space you've had a standout asset before in the group and I'm talking to the Canadian Milotic uh deposit in Quebec as well in the valley law District now um that this didn't necessarily turn out too good for the company you in 2014 you were the subject to a hostile takeover bid from goldfields um leading ultimately leading to the deal with yamana and agnico Eagle mines um how has that experienced conditioned uh how you you approach to running companies and developing companies since then well it was an exceptional experience we bought the project out of bankruptcy for 88 888 in 2004 we did mostly Equity financings because nobody would give us debt and we built a 590 000 ounce a year mine started with now 700 000 ounces a year mine um and then we got into the Hostile with gold Corp in 2014 which ended up selling to Humana and agnico I went from a two and a half billion dollar bid to closing on over four billion dollars uh in total consideration to the shareholders and in that we spun out what is the most successful spinco I believe in the sector a Cisco gold royalties which had a five percent royalty on the project and four other royalties on on the other assets that we had in the company at the time but we were not trying to sell that mine it's the ninth largest gold mine in the world and has been the top gold producer in Canada two out of three years for the last 10 years um so we know that when we find these big assets that uh you know there's a lot of capital intensity a lot of dilution to shareholders if you go through uh the whole process this is a one-off dilution to get to the end game of being in production and maintaining 50 percent of it um you know the thought pattern being that if you have 50 of windfall rate now hopefully with the expiration development that will double when you're on that back basically with 100 of what you started with today right so um it's about keeping more of the assets for our shareholders and having a fully funded outcome uh in a in a very seesaw Market we're you don't really know what the cost of equity capital or debt Capital will be it's also this is a high high cost interest rate environment that we're in um you know so this is by far the safest and and best route for shareholder optimization that was available to the windfall project and I think that team has just really knocked it out of the park congratulations to Goldfield for having the vision to do it well thank you and obviously the name of Cisco mining is a statement of intent you want to be a producer you want to you want to build and build and operate mines absolutely so that you know that was the the idea was to bring it back there are five things on the TSX called osisco now too on the New York Stock Exchange so very busy okay so now that the um you have the joint venture agreement with goldfields what are the the next steps for Winfield and what can we expect to see over the next six to 12 months there well let's uh I'll let that management team speak to it but essentially they're in the final push for the permitting and the construction and commissioning uh over the next 24 36 months they should be fairly far along uh you know in an effort to get to that first goal bar okay thank you now you mentioned the Cisco go royalties and the the uh the origin story of a Cisco go royalties there how's the company grown and where'd you see the company going to so I started as a CEO and chairman in 2014. um the first time we got a bid for the company was three days after we started so it's been a highly sought after asset the royalty there is a five percent royalty on Canadian Arctic and it's produced uh it's paid almost 500 million dollars uh in Revenue since we got it in 2014. uh it covers the bulk of the Canadian Arctic mine site which you know produces somewhere between 650 and 700 000 ounces a year so net about 35 to 40 000 ounces of zero cost gold to US with that we've been able to add to other royalties we have 188 royalties in the royalty company now 21 are producing and we're on schedule to look for a hundred thousand GEOS this year to put that in context Royal gold is you know the next largest royalty company they're about 350 000 ounces and took them 40 years to get there we're at a hundred thousand already so it's gone extremely well and fast the market cap the company is about uh just under 3 billion us right now and about three and a half billion Canadians so it's gone exceptionally well you're a little fourth largest royalty company I would say yeah we're probably you know between we're in a seesaw for fourth but I think you know the quality asset base here with the big name Arctic royalty and then significant growth pipeline the pipeline I think is the important part because we did a lot of asset acquisition in the early the first seven eight years of the company and now that pipeline is starting to bear fruit excellent now um you see former CEO Sandeep Singh left quite unexpectedly I think for a lot of people uh at the start of this month the the independent directors unanimously voting uh saying need to change the CEO what happened there well listen you know this is a you know a very fluid sector there's a lot going on something that's equated to the NHL Hockey League you know sometimes there's a trade and uh sometimes you're playing for the Montreal canadios sometimes you're playing for you know the uh the king so we wish Sandeep all the luck and uh he's well a smart fellow and uh I've you know he's been around us a long time and hopefully he goes on to do uh do good things on The Cisco side um very much focused on you know curating the asset pipeline that we have in place uh and carrying on with the business plan that we put in place in 2020 uh which we sort of slowed down the acquisition line a bit and focused more on near-term production stories like CSA uh and we just could continue on with the execution of that plan so this is like the third year on on that sort of change in plan where we you know we stepped away a little bit from the uh the more aggressive growth assets and more into the traditional assets okay thank you Sean now uh also in the Cisco group this is the Cisco development earlier this year you published a feasibility study on the Caribou project in British Columbia detailing a 160 000 year operation for uh 12 years if I remember correctly that had a after tax irr of more than 20 but a payback of more than five years um what are you working on at the moment to try and improve that well it's about you know it's a big land manage and I see this as a mining camp so this is main one of what we believe will be five to ten mines in the site um we only drilled this down to about a thousand feet or about 350 meters we've tested the deposit down to 900 meters and right now we're two million ounces of reserves another million and a half so Vision indicates about three and a half million ounces uh and then there's another 1.7 million ounces in the inferred so the goal will be to convert those other ounces into the mine plan increase the output uh and increase the grade as we get further into it but we wanted to get started the permits are underway right now we're looking for the eia here in fall and final construction releases hopefully uh sometime in q1 Q2 next year so this is really about getting started on what we believe uh is a mining camp not just a mine so this is for me this is phase one of many phases to come okay um I'll take that as a a cue to sort of let's talk about Capital markets the The Cisco group you've been very successful raising capital for a number of companies um over a number of years we're currently in a quite a challenging Capital Market environment for for junior companies and and developers what's the sentiment you're picking up are you still getting good access to Capital yeah we've been very fortunate we leased about a half a billion dollars in the last 24 months um across very across odv and then within the royalty company 250 million U.S uh and then lsk's had really good access to Capital raising over a couple hundred million dollars in that period plus now they've recently raised essentially a 1.2 billion dollar uh project financing so um I think for good projects there's always funding uh we're certainly seeing a lot of activity from you know the downtime the the downtick equity Market players such as private Equity royalty companies uh and and some of the corporates um you know so that flow is there and you know we'll see you in the next Equity window opens up but uh honestly 2022 and 2023 in the early part of the year was pretty good so um we have uh we've been fortunate and I don't know it's often say it's good to be lucky and uh you know we we try to make as much luck as we can well I think you're also being a little bit modest to assume because money tends to flow to sort of good people with people that can't deliver and uh the Cisco group has certainly done that over the years now um and we thank everybody for that support and we don't take any of it for granted excellent now um as we've talked about the Cisco groups on the verge of building a couple of mines in Canada you know either end of Canada um the Canadian government's really getting behind the uh the critical medal story making funding available and things like that do you see any sort of changes in facilitating permitting in the Regulatory and Regulatory reform to support and advance and accelerate mind building um certainly we're seeing governments take it seriously we're in the EA process in British Columbia we're the first company through the new uh and improved EA process there and I have to say it's been you know pretty much as they stated with legislative timelines so we're encouraged by BC uh we're obviously Hometown in Quebec and we've you know Quebec is always taking their mining seriously and been a good jurisdiction for permitting we certainly have quite a bit of activity between Brunswick Mining and on Cisco development we also have a a lithium gold land package portfolio in Quebec it's about 1600 square kilometers within a Cisco royalties uh we hold the we the ground that Patriot made the discovery on for the Corvette project was on our land so we own a royalty on that once again back just making your own luck we just happen to you know sold that project about seven years ago and kept the royalty so you know those things are a very nice very nice found money so I imagine so obviously critical minerals are very much in the focus at the moment uh companies can raise money there's a lot of interest there now um you've also you've also began a spat called a Cisco green spac's special purpose vehicle um what's the aim there and how is that advancing so we're looking essentially at transition metals uh from copper all the way through to uh you know to the more exotic stuff uh you know nickel lithium and and those things uh we haven't announced a deal yet there so we're still working on it but within the group we also have Assist called Metals uh which now has gas made copper and joint venture with Glenn core at Eastern Quebec uh we also have the Pine Point project in Northwest Territories it's now you know sort of growing up and it's got a deal we've got a deal for 110 million dollars with apian and then we have our big Target in Utah uh which is on the assistant development which is the tintik poor freak now we're very excited about that and that's a poly metallic play that's a lot in the in the green Metals as well with a little bit of delirium in our gold deposit there as well okay it's um it is still a tough market for juniors and developers what do you think is really Weighing on the sector and what will it take to get investors excited again well we need to deliver some success you know we're a little bit stuck behind the big guys that uh you know that haven't really the big big miners haven't really has you know moving their Equity prices um but you know there's there's kind of a bifurcation in the market between exploration development and producers right now uh which there always is in every cycle but we're seeing you know they're just seeing smart monies coming into those spaces now we're seeing you know the push towards green Metals is starting to actually turn from rhetoric into action which we think is good and you know that's one of the plays we're working on in Utah within Tech Ivan Hall electrics drilling next to us down there and I've seen Robert and I are going to be on the Living Legends panel here at four o'clock um you know so we're out there and we you know he's seeing a lot of smart money go to him and we've seen a lot of you know sorry about smart money starting to move into stories like the ones that we generate Brownfield uh big targets you know world-class targeting is is our goal and you know do no small thing being the uh the Mantra and the shadow of the head frame is where you find the next line kind of discussions in terms of expiration strategies so I think that those are attracting money again and uh um you know there's there is a separation where exploration's been harder Greenfield's been harder the lithium space has taken up a lot of a lot of word play uh we're involved in a few ways Brunswick mining one of our our group companies has got 500 lithium plays in it uh within odv we have our lithium portfolio in Quebec and then we have a few we got lucky got the royalty on on Corvette so you know we've been there we also worked with a company called Nile Bay which has got niobium and James Bay um but you know I think the big play for us and the one that I think everybody should maybe have a look at is we're about to drill this big Target that dick silicone generated in for us in 2010 uh in Utah rigs on site and everybody's chewing their fingers waiting to go we're just waiting for the archaeological study release and hopefully by September October we should be at depth and uh and Robert and the Ivan Hall Electric guys are drilling just on our South border so you know it's a it's a it's a it's an Ivan hole a Cisco kind of competition going on in 10 tick right now and I think it should be good fun okay we kind of giving me a good lead into uh next question uh what are gonna be some of the Milestones key milestones for the Cisco group the next six to 12 months well obviously we want to see if dick Soto is right about the uh the Bingham look-alike Target that we're on there we're down about five to eight hundred meters to the top of the campus of the four free um some complicated drilling to get there through some quartz sites and some horse grabbing sort of environment but we'll get it done and uh you know you know if Robert and his crew hit on the south of us I think things are going to heat up there pretty well um you know sort of milestoning on caribou and the gold side um you know EAS are a big thing these days and you know a lot of Finance guys will tell you they're only two types of projects right now the ones with a permit and all the other ones yeah so you know that's that's been a challenge in the space I think it's you know shareholders have been discouraged by this failure of Permitting length of time to money so hopefully we get some wins on the board and uh you know clear the racetrack from and and get on with it and uh I think that you know the recognization of the mining sector and its importance to the transition to clean energy is finally sinking in that that means that we have to build mines uh so I think we're right at the sort of the beginning of that that uh that transition right now and I think it gets a lot more interesting from here on okay uh finally Sean you're on the Living Legends panel you mentioned that's later on today um or does it feel like to be named a living legend or considered a living legend I think it's far better than being on the not living legends panel oh listen you know it's very uh humbling I mean this industry has given me uh a lot and uh you know I don't take anything for granted and we just want to work hard and make our shareholders money and for those people who take the risk to come with us they need to get rewarded and uh you know we appreciate all the all the support that we've had and uh you know give us a call if there's anything you got for ideas that recommend how we can do a better job but you know it's very uh very nice to get the recognition and uh we'll stay humble and and drill deep well congratulations on that Sean Rosen thank you very much for joining us today all the best Paul thank you very much good luck with your Investments everybody it's a it's a tough sector but there's an awful lot of reward thank you and stay tuned to Kitco mining for more from the rules Symposium in Boca Raton in Florida Kitco mining special coverage of the rule Symposium natural resource investing is brought to you by G mining Ventures [Music] foreign

Channel: Kitco Mining

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Keywords: Gold, Canada

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Length: 19min 0sec (1140 seconds)

Published: Wed Aug 09 2023