Dundee Precious Metals sees growth potential as it moves to buy Osino

TSX-listed gold miner Dundee Precious Metals (DPM) has entered into a definitive agreement to acquire TSX-V-listed Osino Resources Corp and, in turn, Osino's high-quality, long-life Twin Hills openpit gold project, along with other exploration assets, in Namibia.

DPM has offered Osino shareholders C$0.78 in cash and 0.08 of a DPM common share per Osino share, resulting in an implied value of C$1.55 per Osino share and an overall equity value of C$287-million.

DPM has been operating the Tsumeb speciality smelter, in Namibia, since 2010, processing concentrate from its Chelopech mine, in Bulgaria. The acquisition of Twin Hills will further raise its existing production profile of 258 000 oz/y of gold from the Chelopech and Ada Tepe mines, with the latter also located in Bulgaria.

A June 2023 feasibility study completed by Osino on Twin Hills outlined an openpit project with a 13-year mine life and average production of 175 000 oz/y of gold over the first five years, with first production targeted in the second half of 2026.

DPM is confident that the Twin Hills project, along with its high-grade Čoka Rakita deposit, in Serbia, holds good growth potential for the company.

“Twin Hills represents a unique opportunity to add a high-quality development asset in an excellent mining jurisdiction to our portfolio. The project provides a foundation for our future production profile with production targeted for 2026, as well as significant exploration upside.

“This transaction also allows us to leverage our strong local relationships in Namibia, which we have built over many years, and continue our focus on growing our portfolio of gold assets. With Twin Hills and Čoka Rakita, DPM will have an extremely attractive growth pipeline and the financial capacity to fund it internally through our existing cash balance and free cash flow," comments DPM president and CEO David Rae.

“DPM is a highly credible and well-financed builder and operator of gold mines with the technical skills and financial resources to progress the Twin Hills project through construction and into production. We are very proud to have attracted a company of DPM’s calibre, thereby securing the future development of Twin Hills, which we believe has the potential to become Namibia’s third and largest gold mine.

“Since 2019, the Osino team has made great strides in discovering and advancing Twin Hills, and de-risking the project from a technical and permitting perspective. We believe that handing over the project to DPM at this critical juncture is in the best interest of our shareholders and local stakeholders. Our well-established and highly credible Namibian exploration and technical team will continue to contribute meaningfully as DPM takes the project to the next level,” adds Osino president and CEO Heye Daun.

Going forward, DPM intends to advance all remaining engineering activities for Twins Hills to reach a construction decision by the third quarter of 2024.

Over this period, DPM will pursue opportunities to refine and optimise the mining, construction and execution aspects of the project, given DPM’s experience in the development and operation of its existing portfolio.

In parallel, DPM will also be reviewing the construction timeline, which is currently targeting first production in the second half of 2026.