EARLY WARNING REPORT FOR OSISKO MINING INC.

FORM 62-103F1

EARLY WARNING REPORT

 This report updates information disclosed in a previous report filed by Osisko Mining Inc. (“Osisko”) on July 14, 2021.

Item 1 – Security and Reporting Issuer

1.1             State the designation of securities to which this report relates and the name and address of the head office of the issuer of the securities.

Issuer:

O3 Mining Inc. (“O3 Mining“)
155 University Avenue
Suite 1440
Toronto, Ontario  M5H 3B7

Securities:   This report relates to the disposition by Osisko of common shares of O3 Mining (“O3 Shares“).

O3 Mining is a corporation existing under the laws of the Province of Ontario and its common shares trade through the facilities of the TSX Venture Exchange under the trading symbol “OIII”.

1.2             State the name of the market in which the transaction or other occurrence that triggered the requirement to file this report took place.

The Disposition (as defined below) will be completed by way of a private agreement.

Item 2 – Identity of the Acquiror

2.1             State the name and address of the acquiror.

Acquiror:

Osisko Mining Inc. (“Osisko“)
155 University Avenue
Suite 1440
Toronto, Ontario  M5H 3B7

Osisko is a corporation existing under the laws of the Province of Ontario and its common shares trade through the facilities of the Toronto Stock Exchange under the trading symbol “OSK”. Osisko is a mineral exploration company focused on the acquisition, exploration, and development of precious metal resource properties in Canada.

2.2             State the date of the transaction or other occurrence that triggered the requirement to file this report and briefly describe the transaction or other occurrence.

On December 15, 2021, Osisko entered into a purchase agreement with an arm’s length third party pursuant to which Osisko agreed to dispose of an aggregate of 2,500,000 O3 Shares at a price of $2.00 per O3 Share for aggregate consideration of $5,000,000 (the “Disposition”). The Disposition is expected to close prior to the end of December 2021. The Disposition triggered the requirement to file this report under National Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 61-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

2.3             State the names of any joint actors.

None.

Item 3 – Interest in Securities of the Reporting Issuer

3.1             State the designation and number or principal amount of securities acquired or disposed of that triggered the requirement to file the report and the change in the acquiror’s securityholding percentage in the class of securities.

Immediately prior to giving effect to the Disposition, Osisko had beneficial ownership of, or control and direction over, 18,361,298 O3 Shares, representing approximately 26.9% of the number of issued and outstanding O3 Shares (being 68,160,439 common shares).

Immediately after giving effect to the Disposition, Osisko had beneficial ownership of, or control and direction over, 15,861,298 O3 Shares, representing approximately 23.3% of the issued and outstanding O3 Shares on a basic basis (based on there being 68,160,439 O3 Shares issued and outstanding as of the date hereof).

3.2             State whether the acquiror acquired or disposed ownership of, or acquired or ceased to have control over, the securities that triggered the requirement to file the report.

Osisko disposed of 2,500,000 O3 Shares referred to in this report.

3.3             If the transaction involved a securities lending arrangement, state that fact.

Not applicable.

3.4             State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities, immediately before and after the transaction or other occurrence that triggered the requirement to file this report.

See Item 3.1 above.

3.5             State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities referred to in Item 3.4 over which

(a)             the acquiror, either alone or together with any joint actors, has ownership and control,

Osisko owns and controls the 15,861,298 O3 Shares referred to in Item 3.1, representing approximately 23.3% of the issued and outstanding O3 Shares.

(b)             the acquiror, either alone or together with any joint actors, has ownership but control is held by persons or companies other than the acquiror or any joint actor, and

Not applicable.

(c)              the acquiror, either alone or together with any joint actors, has exclusive or shared control but does not have ownership.

Not applicable.

3.6             If the acquiror or any of its joint actors has an interest in, or right or obligation associated with, a related financial instrument involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the related financial instrument and its impact on the acquiror’s securityholdings.

Not applicable.

3.7             If the acquiror or any of its joint actors is a party to a securities lending arrangement involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the arrangement including the duration of the arrangement, the number or principal amount of securities involved and any right to recall the securities or identical securities that have been transferred or lent under the arrangement.

Not applicable.

State if the securities lending arrangement is subject to the exception provided in section 5.7 of NI 62-104.

Not applicable.

3.8             If the acquiror or any of its joint actors is a party to an agreement, arrangement or understanding that has the effect of altering, directly or indirectly, the acquiror’s economic exposure to the security of the class of securities to which this report relates, describe the material terms of the agreement, arrangement or understanding.

Not applicable.

Item 4 – Consideration Paid

4.1             State the value, in Canadian dollars, of any consideration paid or received per security and in total.

See Item 2.2 above.

4.2             In the case of a transaction or other occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, disclose the nature and value, in Canadian dollars, of the consideration paid or received by the acquiror.

See Item 2.2 above.

4.3             If the securities were acquired or disposed of other than by purchase or sale, describe the method of acquisition or disposition.

Not applicable.

Item 5 – Purpose of the Transaction

State the purpose or purposes of the acquiror and any joint actors for the acquisition or disposition of securities of the reporting issuer. Describe any plans or future intentions which the acquiror and any joint actors may have which relate to or would result in any of the following: (a) the acquisition of additional securities of the reporting issuer, or the disposition of securities of the reporting issuer; (b) a corporate transaction, such as a merger, reorganization or liquidation, involving the reporting issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of the assets of the reporting issuer or any of its subsidiaries;(d) a change in the board of directors or management of the reporting issuer, including any plans or intentions to change the number or term of directors or to fill any existing vacancy on the board; (e) a material change in the present capitalization or dividend policy of the reporting issuer; (f) a material change in the reporting issuer’s business or corporate structure; (g) a change in the reporting issuer’s charter, bylaws or similar instruments or another action which might impede the acquisition of control of the reporting issuer by any person or company; (h) a class of securities of the reporting issuer being delisted from, or ceasing to be authorized to be quoted on, a marketplace; (i) the issuer ceasing to be a reporting issuer in any jurisdiction of Canada; (j) a solicitation of proxies from securityholders; (k) an action similar to any of those enumerated above.

The O3 Shares were disposed of in order to monetize a portion of its investment in O3 Mining. Osisko intends to review, on a continuous basis, various factors related to its investment in O3 Mining, and may decide to purchase or dispose of additional securities of O3 Mining as future circumstances may dictate.

Item 6 – Agreements, Arrangements, Commitments or Understandings With Respect to Securities of the Reporting Issuer

Describe the material terms of any agreements, arrangements, commitments or understandings between the acquiror and a joint actor and among those persons and any person with respect to securities of the class of securities to which this report relates, including but not limited to the transfer or the voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Include such information for any of the securities that are pledged or otherwise subject to a contingency, the occurrence of which would give another person voting power or investment power over such securities, except that disclosure of standard default and similar provisions contained in loan agreements need not be included.

Not applicable.

Item 7 – Change in material fact

If applicable, describe any change in a material fact set out in a previous report filed by the acquiror under the early warning requirements or Part 4 in respect of the reporting issuer’s securities.

Not applicable.

Item 8 – Exemption

If the acquiror relies on an exemption from requirements in securities legislation applicable to formal bids for the transaction, state the exemption being relied on and describe the facts supporting that reliance.

Not applicable.

Item 9 – Certification

The acquiror must certify that the information is true and complete in every respect. In the case of an agent, the certification is based on the agent’s best knowledge, information and belief but the acquiror is still responsible for ensuring that the information filed by the agent is true and complete.

This report must be signed by each person on whose behalf the report is filed or his authorized representative.

It is an offence to submit information that, in a material respect and at the time and in the light of the circumstances in which it is submitted, is misleading or untrue.

Certificate

I, as the President and Chief Executive Officer of Osisko, certify on behalf of Osisko, to the best of my knowledge, information and belief, that the statements made in this report are true and complete in every respect.

Date:                December 15, 2021

Signature:         (signed) “John F. Burzynski”
Chief Executive Officer, Osisko

Name/Title:      John F. Burzynski / Chief Executive Officer, Osisko