Osisko Development (ODV) - 2025 Q2 - Quarterly Report

Financial Statements Consolidated Statements of Financial Position As of June 30, 2025, the company's financial position shows a significant decrease in cash and cash equivalents to $46.3 million from $106.7 million at year-end 2024, with total assets declining to $783.7 million from $856.9 million, while total liabilities increased, driven primarily by a rise in the warrant liability to $88.6 million, leading to a reduction in total equity to $484.8 million from $570.6 million Key Balance Sheet Items (in thousands of Canadian dollars) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $46,298 | $106,653 | -$60,355 | | Total Current Assets | $62,112 | $123,250 | -$61,138 | | Mining interests | $493,299 | $506,670 | -$13,371 | | Total Assets | $783,738 | $856,902 | -$73,164 | | Total Current Liabilities | $158,759 | $144,501 | +$14,258 | | Warrant liability | $88,578 | $67,852 | +$20,726 | | Total Liabilities | $298,905 | $286,273 | +$12,632 | | Total Equity | $484,833 | $570,629 | -$85,796 | - The company reported a negative working capital of $96.6 million as of June 30, 2025, a key factor in the going concern assessment[15] Consolidated Statements of Loss For the six months ended June 30, 2025, the company's net loss significantly widened to $84.7 million from $36.7 million in the prior year period, driven by higher operating costs, a $25.8 million asset impairment charge, and a $23.9 million negative change in the fair value of the warrant liability, while revenues increased to $6.9 million from $4.4 million year-over-year Performance Summary for the Six Months Ended June 30 (in thousands of Canadian dollars) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $6,859 | $4,399 | +55.9% | | Operating loss | ($61,218) | ($33,956) | +80.3% | | Impairment of assets | ($25,793) | ($5,438) | +374.3% | | Change in fair value of warrant liability | ($23,903) | $10,045 | Negative Swing | | Net loss | ($84,734) | ($36,668) | +131.0% | | Basic and diluted net loss per share | ($0.62) | ($0.43) | +44.2% | Consolidated Statements of Comprehensive Loss The company reported a comprehensive loss of $91.2 million for the six months ended June 30, 2025, a substantial increase from the $35.3 million loss in the same period of 2024, primarily due to the higher net loss of $84.7 million, compounded by a $6.5 million other comprehensive loss, which included negative currency translation adjustments Comprehensive Loss for the Six Months Ended June 30 (in thousands of Canadian dollars) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net loss | (84,734) | (36,668) | | Other comprehensive (loss) income | (6,456) | 1,385 | | Comprehensive loss | (91,190) | (35,283) | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, cash used in operating activities was $33.1 million, and cash used in investing activities was $27.7 million, primarily for additions to mining interests, resulting in a total decrease in cash of $60.4 million and an ending cash balance of $46.3 million Cash Flow Summary for the Six Months Ended June 30 (in thousands of Canadian dollars) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash flows used in operating activities | ($33,089) | ($22,308) | | Net cash flows used in investing activities | ($27,705) | ($16,412) | | Net cash flows (used in) provided by financing activities | ($2,752) | $27,569 | | Decrease in cash and cash equivalents | ($60,355) | ($9,775) | | Cash and cash equivalents – End of period | $46,298 | $33,680 | Consolidated Statements of Changes in Equity Total equity decreased from $570.6 million at the beginning of 2025 to $484.8 million at June 30, 2025, primarily driven by the comprehensive loss of $91.2 million for the period, partially offset by equity issued for deferred consideration and share-based compensation - The company's deficit increased from $598.3 million to $683.1 million during the first six months of 2025 due to the net loss of $84.7 million[8] - Share capital increased by $3.7 million, mainly from shares issued for the settlement of deferred consideration ($3.4 million)[8] Notes to the Consolidated Financial Statements Note 1: Nature of operations and going concern The company is a mineral exploration and development firm focused on projects in North America, with management identifying material uncertainties that cast substantial doubt on its ability to continue as a going concern, given a negative working capital of $96.6 million and an accumulated deficit of $683.1 million as of June 30, 2025, making its continued operations dependent on securing additional financing - The company's financial statements have been prepared on a going concern basis, but management acknowledges material uncertainties related to its ability to continue operations[15][16] - Key projects include the Cariboo Gold Project (BC), San Antonio Gold Project (Mexico), and Trixie Test Mine (USA)[13] - Future operations depend on securing additional financing through asset sales, project debt, offtake/royalty financing, or capital markets; failure to do so may require curtailing planned activities[17] Note 4: Mining interests The net book value of mining interests decreased to $493.3 million from $506.7 million, primarily due to a significant impairment charge of $25.3 million recorded on the QR Mill during the first quarter of 2025, following an optimized feasibility study for the Cariboo Gold Project which removed the need for the mill, resulting in the QR Mill's net book value being fully written off - An impairment charge of $25.3 million was recorded on mining interests related to the QR Mill in Q1 2025[21][25] - The impairment was triggered by an optimized feasibility study for the Cariboo Gold Project that eliminated the need to transport concentrate to the QR Mill[25] Note 7: Long-term debt and credit facility As of June 30, 2025, total long-term debt and credit facility stood at $43.2 million, with $37.0 million classified as current, including a US$50 million credit facility designated for the Cariboo gold project, of which the outstanding US$25 million was repaid subsequent to the quarter-end using proceeds from a new financing facility Debt Balance (in thousands of Canadian dollars) | Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Current portion | 37,037 | 40,314 | | Non-current portion | 6,155 | 5,503 | | Total | 43,192 | 45,817 | - The US$50 million Credit Facility matures on October 31, 2025, and the outstanding US$25 million was repaid on July 21, 2025[29][32] Note 9: Warrants Certain warrants exercisable in U.S. dollars are classified as a financial liability and measured at fair value, with the warrant liability increasing to $88.6 million at June 30, 2025, from $67.9 million at year-end 2024, resulting in a $23.9 million charge to the statement of loss for the six-month period due to the change in fair value Warrant Liability Movement (in thousands of Canadian dollars) | Period | Balance – Beginning of period | Change in fair value | Balance – End of period | | :--- | :--- | :--- | :--- | | H1 2025 | $67,852 | $23,903 | $88,578 | - The warrants are revalued at each reporting period using the Black-Scholes model, with changes in fair value recognized in the income statement[35] Note 13: Segmented information The company's operations are segmented geographically across Canada, Mexico, and the USA, with Canada being the largest contributor to the operating loss at $55.3 million for the six months ended June 30, 2025, primarily due to a $25.8 million asset impairment, while the USA was the sole source of revenue at $6.9 million Operating Loss by Segment for Six Months Ended June 30, 2025 (in thousands of Canadian dollars) | Segment | Revenues | Impairment of assets | Operating loss | | :--- | :--- | :--- | :--- | | Canada | $— | ($25,793) | ($55,339) | | Mexico | $— | $— | ($4,057) | | USA | $6,859 | $— | ($1,822) | | Total | $6,859 | ($25,793) | ($61,218) | Non-Current Assets by Segment as of June 30, 2025 (in thousands of Canadian dollars) | Segment | Non-Current Assets (excluding investments) | | :--- | :--- | | Canada | $504,996 | | Mexico | $48,739 | | USA | $142,999 | | Total | $696,734 | Note 15: Subsequent events Subsequent to the quarter-end, the company secured significant financing to address its liquidity needs and fund the Cariboo Gold Project, including a US$450 million senior secured project loan facility, of which an initial US$100 million was drawn, and planned private placements for aggregate gross proceeds of up to US$195 million - On July 21, 2025, the company entered into a US$450 million credit facility with Appian Capital for the Cariboo Gold Project, with an initial draw of US$100 million[49] - On July 31, 2025, the company announced a "bought deal" private placement for gross proceeds of US$120 million[50] - Concurrently, a non-brokered private placement with a strategic investor was arranged for gross proceeds of US$75 million[52]