Osisko Gold Greenlights Construction of Cariboo Gold Project
News related to:Osisko Gold Group Inc · 2 min read
Osisko Gold Group Inc., a Canadian mining company, has announced a significant milestone in its Cariboo Gold Project. The company's Board of Directors has made a formal positive decision to proceed with the construction of the 100%-owned Cariboo Gold Project, located in central British Columbia, Canada.
Chairman and CEO Sean Roosen commented, "This decision marks a defining milestone for Osisko Gold and a pivotal inflection point toward our objective of becoming an intermediate gold producer. It reflects our confidence in the significant long-term value Cariboo can deliver to our shareholders and other stakeholders."
The project, which has been in development for over a decade, is expected to support 613 direct jobs at its peak, followed by 525 permanent jobs during operations. The construction is anticipated to generate substantial direct and indirect economic benefits for local communities and the Province of British Columbia.
According to the press release, the project's remaining go-forward capital obligation is estimated at $990 million, net of approximately $272 million in costs incurred up to and including July 31, 2026. The project is designed as a conventional, decline-accessed underground mining operation employing mechanized long-hole stoping mining methods, with paste backfill, to extract ore from gold-bearing vein corridors.
The project's timeline includes the establishment of a second underground access at the Valley Portal, which will provide a second development front and support critical path primary development access to the Valley and Shaft Zones. Approximately 3.0 kilometers of underground development has been completed to date, with early works already underway at the mine site complex, waste rock storage facility, sediment control pond, and water treatment plant.
Construction is expected to support a 30-month construction period from August 1, 2026, to first gold pour in Q1 2029, and a 36-month period to commercial production in H2 2029. The project's robust economics are underscored by an after-tax NPV5% of C$3.2 billion, an after-tax IRR of 42.7%, and average annual free cash flow of C$642 million in the first five years.
To support the project's development, Osisko Gold has entered into agreements with Trafigura Canada Limited and Urion Investments Holdings Limited, an affiliate of Trafigura. These agreements include a subscription agreement for an equity investment of approximately US$30 million, off-take agreements for gold concentrate and doré, and non-binding terms for a potential subordinated gold prepayment facility.
Roosen added, "We are very pleased to welcome Trafigura, a global leader in the commodities industry, as a long-term strategic partner at Cariboo. Its strategic investment in the Company reflects confidence in both the Project and our team's ability to execute on its construction."
The project's development is expected to significantly contribute to Osisko Gold's long-term growth strategy, with ongoing exploration and conversion drilling within the current deposit and the advancement of exploration at depth and along strike within the existing permit footprint.