Osisko Metals (TSX: OM; US-OTC: OMZNF) is part of a rising trend tapping private equity to help build projects, but it’s wary of the growing role of “predatory” debt financing.
Appian Capital Advisory, a London-based private equity firm with mining projects valued at US$3.6 billion, is investing $25 million for a quarter of Osisko’s Pine Point zinc-lead mine in the Northwest Territories.
Appian is to hold 60% of the project after spending $100 million as it covers costs until a final investment decision, Osisko chairman and CEO Robert Wares told The Northern Miner in an interview in New York this month at the Society for Mining, Metallurgy & Exploration’s eighth annual Trends in Mining Finance Conference.
“As a business model for a junior developer, quite honestly, I could do this repeatedly. Find good projects, drill them off, define a significant resource and private equity groups like Appian are often willing to step in,” Wares said. “If we retain 40-50%% free carried to mine build, what’s wrong with that? If I do that multiple times, I’m still building great value for shareholders and we’ve got partners who are going to finance the mine and spare shareholders excessive dilution.”
For the rest of this article: https://www.northernminer.com/financing/osisko-cofounder-wares-praises-private-equity/1003855089/