Osisko Development Impairment Announcement

Osisko Development shares experienced a decline Wednesday morning as the company announced its anticipation of a noncash impairment of up to $120 million associated with its gold test mine in Utah.

Impairment Details

The company revealed that this impairment is a part of an ongoing review of its asset values as of the end of 2023. Specifically, Osisko highlighted a noncash impairment concerning the Trixie gold test mine within its broader Tintic project in the state. The projected impairment amount ranges from $80 million to $120 million, impacting the net carrying value of the mine, but it is clarified that this will not affect the company’s cash flows.

Factors Influencing Impairment Charge

Various factors influenced the decision to project this impairment, including assumptions regarding future exploration, necessary capital expenditures, potential mining and processing techniques, and average processed gold grades specifically related to gold targets within the Trixie mine.

Management’s Outlook

Despite this impairment charge, company management remains optimistic about the extensive exploration potential within its portfolio. They emphasized that certain areas with historical mining activity have yet to be fully explored due to resource constraints on the balance sheet.

This impairment is a strategic move by Osisko Development to align its asset values with current market conditions and positions it for future growth opportunities in the gold mining sector.