Osino Resources Advancing Twin Hills Gold Project in Namibia Despite Challenging Markets

• Osino Resources, led by CEO Haya Don, is known for its previous successful gold project sale to B2Gold and aims to replicate that success.
• The company's most advanced project is Twin Hills, a 3 million ounce resource with a pre-feasibility stage, and they have another project acquired from B2Gold set to announce its resource at the end of the month.
• Due to market indifference despite their fast-tracking approach and successful delivery, Osino Resources is entering a "hibernation mode," slowing down its activities.
• Osino is actively working towards finalizing its definitive feasibility study, addressing infrastructure challenges like water and power in Namibia.
• The company's recent pre-feasibility study shows an NPV of $783 million with a 2-year payback, even though it was released during challenging economic times affected by COVID-19 and rising costs.

About Osino Resources

Osino Resources (TSXV: OSI) is a Canadian gold exploration and development company focused on the acquisition and development of gold projects in Namibia. The company was founded by CEO Heye Daun, a Namibian mining engineer and entrepreneur with over 10 years experience building and advancing mining companies in Africa. Osino’s flagship project is the Twin Hills gold project, located in north-central Namibia.

Interview with Heye Daun, CEO of Osino Resources

Twin Hills Gold Project

The Twin Hills gold project is Osino’s most advanced asset with a resource of over 3 million ounces of gold. Osino discovered Twin Hills in 2019 and has quickly advanced it to a preliminary feasibility study (PFS) stage. The PFS outlines a 13-year open-pit mine producing 150,000 ounces of gold per year in the first 5 years at all-in sustaining costs of $930/oz. Initial capital costs are estimated at $375 million with a 2.3 year payback period at $1,700/oz gold prices.

The large scale project has total probable mineral reserves of 2.15 million oz gold at 1.00g/t and is amenable to open pit mining methods. The project benefits from being located in a mining friendly jurisdiction with good infrastructure nearby. Osino plans to continue advancing Twin Hills to construction in 2023, with first gold production possible in 2024.

Current Challenging Markets

Despite the solid economics of Twin Hills shown in the PFS, Osino’s share price has languished over the past year along with the overall bear market in gold stocks. CEO Heye Daun acknowledges that the fast-tracking of Twin Hills has not been rewarded by the market as expected.

With gold prices weakening and equity markets remaining risk-off, Daun believes now is the time to slow expenditures and focus only on critical path items and permitting until markets improve. As a result, Osino has put drilling on hold and entered a “hibernation mode” to conserve cash. Daun believes this is the prudent strategy in the current market environment.

Financing and Project Funding

Osino ended Q2 2022 with around $7 million in cash and no debt. While the current budget is sufficient to fund planned work programs into 2023, additional funding will be required to advance Twin Hills to construction.

The company has appointed debt advisors and received significant interest from lenders to provide senior debt financing for Twin Hills. Osino aims to secure debt term sheets by the end of 2022 that will provide a clear path to funding up to 70% of the project’s capex. Equity financing for the remainder is expected to come from existing supportive shareholders.

Management remains confident they can fund Twin Hills' construction without excessive equity dilution given the project's strong economics. The definitive feasibility study planned for 2023 will provide updated cost estimates and help secure financing packages.

Permitting and Development Timeline

Osino continues to make good progress on permitting activities required ahead of construction. The key permits required are the Mining Licence and Environmental Clearance Certificate, both of which are expected within the next 6 months.

The definitive feasibility study is targeted for completion around mid-2023. This will be followed by detailed engineering and the ordering of long-lead equipment in preparation for construction to commence in 2023 once all financing and permits are in place.

First gold production from Twin Hills is envisioned by 2024 based on the current development timeline. The construction period is estimated at 18 months, providing a potential major catalyst for the stock as the project is derisked and funded for production.

Upside Potential

CEO Daun sees considerable upside potential remaining at Twin Hills. The large mineralized system is open for expansion and only a portion of the deposits have been drill tested. Additional discoveries are likely as exploration continues both at Twin Hills and other regional targets.

Once in production, the initial 5-year outlook of 150,000 oz/yr gold provides significant annual free cash flow that can be used to fund mine life extensions through exploration success. Osino aims to continue growing Twin Hills into a long-life gold mining operation in Namibia.

Management believes the current share price significantly undervalues Twin Hills based on its solid PFS metrics and peer comparisons. As gold prices stabilize and financing is secured, the market should begin to recognize the potential of Osino’sNamibian gold assets.

Conclusion

Osino Resources provides leverage to an undervalued advanced stage gold project with solid economics and potential near-term catalysts. Despite market headwinds, management has a clear path to funding and constructing its flagship Twin Hills gold project at an opportune time in the cycle.

With plenty of exploration upside remaining, investors have an opportunity to position at the lows ahead of permitting, financing and development milestones over the next 18 months. As Twin Hills gets de-risked on the path to gold production, Osino’s share price should reflect the potential of its Namibian gold assets.