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June 14, 2024
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Precious Metals

Dundee Precious Metals acquires high value project in Namibia


Dundee Precious Metals Inc. (TSX:DPM) acquired Osino Resources Corp. (TSXV: OSI)(FSE: RSR1) (OTCQX: OSIIF), adding the latter’s high-quality Twin Hills open pit gold project and exploration portfolio based in Namibia.

Announced on Monday, DPM will pay CAD$0.775 in cash per Osino share and 0.0801 DPM share per Osino share. This implies a total equity value of CAD$287 million on a fully-diluted basis. After completing the transaction, DPM will issue 13,766,364 shares to Osino shareholders. and existing Osino shareholders will own approximately 7 per cent of the combined company.

Osino discovered Twin Hills in 2019 and accelerated its development to the pre-construction stage within four years. The property has a multi-million-ounce gold project with 2.15 million ounces of proven and probable reserves. The feasibility study for the project outlines an estimated gold production of 175,000 ounces per year over the first 5 years and 162,000 ounces per year over the 13-year mine life.

The project has obtained substantial permits, including a 20-year mining licence, with only outstanding site-level permits remaining. Front-end engineering and design have also progressed, and all surface rights for mining and related infrastructure have been acquired.

The Twin Hills project benefits from a mining-friendly jurisdiction with established infrastructure, a skilled labour force and access to renewable power. Dundee Precious Metals has been using the Tsumeb smelter in Namibia since 2010 and has established strong relationships with the government and local communities in the country.

This move also positions DPM as a leading intermediate gold producer with exceptional assets and a strong growth profile.

Dundee’s Tsumeb smelter and property in Namibia. Image via Dundee Precious Metals.

Read more: Calibre Mining’s merger with Marathon Gold deemed ‘tremendous opportunity’

Read more: Calibre Mining joins Mining Association of Canada

Dundee Precious Metals growth pipeline supported by new gold discoveries

Prior to the deal, DPM’s asset portfolio boasted a production profile of 258,000 ounces of gold per annum from the Chelopech and Ada Tepe mines in Bulgaria. Now the growth pipeline will receive support from two high-quality gold discoveries.  These include Twin Hills with its targeted production started in 2026 and its high-grade Čoka Rakita deposit in Serbia.

The Serbian project currently holds an inferred mineral resource of 1.78 million ounces of gold. DPM has recently initiated a preliminary economic assessment (PEA) for this project.

Additionally, DPM gains longer-term optionality and upside potential with the Loma Larga development project and Tierras Coloradas exploration prospect in Ecuador. This expansion further strengthens DPM’s mineral reserve and resource base, increasing proven and probable reserves by 43 per cent to approximately 7.2 million gold ounces. Moreover, it adds 2.9 million ounces of Measured and Indicated Resources and 0.25 million ounces of gold in Inferred Resources.

“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,” David Rae, president and CEO of Dundee Precious Metals, said.

“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.”

Namibia is attractive to mining companies because it offers political stability and a secure legal framework, which reduces investment risks. The country has rich mineral resources, including gold, uranium and diamonds. It also prioritizes environmental responsibility, which aligns with global standards.

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