Minera Alamos (MAI.V) isn’t wasting any time and shortly after closing the financing deal with Osisko Gold Royalties (OR, OR.TO) the company has now officially kicked off the construction phase on the Santana gold mine in Mexico’s Sonora province. As you may remember, the construction period is quite short and the first gold should be recovered in the third quarter of this year.
Now the C$6M equity financing has closed, Osisko Gold Royalties increased its position by 30 million shares (which were issued at C$0.20 per share for a total cash inflow of C$6M which will be used to fund a part of the Santana construction activities) and now owns roughly 18.7% of Minera’s share count. As Osisko is already making good money on the equity position and it stands to directly benefit from the gold sales further down the road, the Minera Alamos case could prove to be an excellent example of why and how Osisko’s incubator model could be beneficial to its shareholders.
Disclosure: The author has a long position in Minera Alamos.