SCHEDULE: Double Zero Capital Increases Stake in Osisko Development

Double Zero Capital, LP has agreed to purchase $50 million in convertible senior notes, reinforcing its significant 19.9% stake in Osisko Development Corp.

Summary

• Double Zero Capital, LP is acquiring $50,000,000 in 4.125% convertible senior notes due 2031 through a private placement.
• The purchase price includes 100% of the principal plus accrued interest from the prior offering closing on May 26, 2026.
• The notes are convertible at an initial rate of 272.1088 shares per $1,000 principal amount, representing a conversion price of approximately $3.675 per share.
• Double Zero currently holds 48,591,775 common shares and 18,300,000 warrants, but is subject to a 19.9% beneficial ownership blocker.
• The total beneficial ownership reported is 63,632,697 shares, exactly 19.9% of the 304,721,378 shares outstanding as of May 11, 2026.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a highly positive development. Securing $50 million from a major existing shareholder on the same terms as a public offering demonstrates strong internal support and provides significant non-dilutive (immediate) liquidity for development.

Positives

• Secures $50 million in additional capital from a major existing shareholder.
• The 4.125% interest rate is relatively low for senior unsecured debt in the current mining development sector.
• Strong institutional support from Wen Hou and Double Zero Capital indicates long-term confidence in the issuer's assets.
• The financing is structured as senior unsecured debt, providing flexibility compared to secured lending.

Negatives

• Potential for significant future dilution as the notes are convertible into common shares.
• The 19.9% ownership blocker limits the reporting person's ability to provide further equity-linked support without regulatory hurdles.
• The company is increasing its long-term debt obligations by $50 million, maturing in 2031.

Risks

• Dilution risk for existing shareholders if the notes are converted into equity at the $3.675 rate.
• Interest rate risk, as the company must meet semi-annual interest payments starting December 2026.
• Market risk associated with the issuer's ability to settle conversions in cash, shares, or a combination thereof.
• Concentration risk with a single entity holding nearly 20% of the company's voting power.

Future Outlook

The company is positioning itself with long-term capital through 2031, suggesting a focus on multi-year development milestones. The flexibility to settle conversions in cash or shares allows management to manage dilution based on future share price performance.

Management Comments

• Double Zero is financing the purchase with working capital from realized gains on prior investments.
• The notes are general senior unsecured obligations of the Issuer.
• The closing of the private placement was specifically conditioned on the successful closing of the prior $225 million offering.

Industry Context

StockSavvy.ai notes that gold developers frequently utilize convertible debt to bridge the gap between exploration and production without immediate massive equity dilution. This $50 million add-on to a $225 million raise suggests Osisko is aggressively funding its project pipeline in a capital-intensive industry.

Comparison to Industry Standards

• The 4.125% coupon is competitive compared to recent convertible raises by peers like Seabridge Gold or Ivanhoe Mines, which often range between 3% and 6%.
• The 19.9% ownership cap is a standard regulatory threshold to avoid 'control' designations under Canadian and U.S. securities laws.
• The 5-year plus maturity (2031) is standard for senior notes in the mining sector to align with project development timelines.

Corporate Governance

Related Party Transactions

• Double Zero Capital, an insider holding 19.9% of the company, is the purchaser in this $50 million private placement.

Stakeholder Impact

• Shareholders: Face potential long-term dilution but benefit from increased liquidity and project funding.
• Creditors: The notes are senior unsecured, placing them ahead of equity but behind any future secured debt.
• Management: Gains $50 million in working capital to execute strategic plans.

Next Steps

• Complete the closing of the private placement on May 29, 2026.
• Make the first interest payment on December 15, 2026.
• Monitor share price relative to the $3.675 conversion price for potential future dilution.

Key Dates

Recommendation

While the capital raise is a positive sign of support, the potential for dilution and the increase in debt load suggest a cautious approach until the company demonstrates project milestones funded by this capital.

Keywords

Osisko Development, Double Zero Capital, Convertible Notes, Private Placement, Gold Mining, Schedule 13D, Wen Hou, Debt Financing