Exhibit 99.1

 

OSISKO DEVELOPMENT CORP.

. . . . . . . . . . . . . . . . . .

Consolidated Financial Statements

For the three months ended

March 31, 2023

Osisko Development Corp.

Consolidated Statements of Financial Position

As at March 31, 2023 and December 31, 2022
(Unaudited)

(Expressed in thousands of Canadian dollars)

		March 31, 2023			December 31, 2022
	Notes	$			$
Assets
Current assets
Cash	3		122,165			105,944
Amounts receivable	4		2,924			11,046
Inventories	5		17,290			17,641
Other current assets			5,953			6,621
			148,332			141,252
Non-current assets
Investments in associates	6		8,720			8,833
Other investments	6		28,990			33,819
Mining interests	7		596,056			580,479
Property, plant and equipment	8		116,567			111,696
Exploration and evaluation	9		60,299			55,126
Other assets	24		39,787			36,994
			998,751			968,199
Liabilities
Current liabilities
Accounts payable and accrued liabilities	10		25,471			31,106
Lease liabilities	12		845			1,208
Contract liability	13		631			941
Current Portion of long-term debt	11		5,399			4,663
Environmental rehabilitation provision	14		3,122			9,738
Deferred Consideration and contingent payments			3,383			3,386
			38,851			51,042
Non-current liabilities
Long term debt	11		14,959			12,256
Lease liabilities	12		922			962
Contract liability	13		59,095			54,252
Environmental rehabilitation provision	14		74,745			66,032
Warrant liability	15		25,555			16,395
Deferred Consideration and contingent payments			13,484			13,252
Deferred income taxes			22,826			23,574
			250,437			237,765
Equity
Share capital	16		1,075,512			1,032,786
Warrants	16		11,859			1,573
Contributed surplus			15,052			12,857
Accumulated other comprehensive income			(2,281	)		7,166
Deficit			(351,828	)		(323,948	)
			748,314			730,434
			998,751			968,199

APPROVED ON BEHALF OF THE BOARD

(signed) Sean Roosen, Director (signed), Charles Page, Director

The notes are an integral part of these consolidated financial statements.

2 

Osisko Development Corp.

Consolidated Statements of Loss

For the three months ended March 31, 2023 and 2022

(Unaudited)

(Expressed in thousands of Canadian dollars, except per share amounts)

		2023			2022
	Notes	$			$
Revenues			3,451			9,167
Operating expenses
Cost of sales	18		(4,406	)		(9,167	)
Other operating cost	18		(10,553	)		(15,246	)
General and administrative	19		(9,996	)		(7,807	)
Exploration and evaluation, net of tax credits			(807	)		(120	)
Operating loss			(22,311	)		(23,173	)
Accretion expense			(1,284	)		(447	)
Share of loss of associates			(113	)		(331	)
Change in fair value of warrant liability	15		(9,174	)		-
Other income, net	20		8,816			1,588
Loss before income taxes			(24,066	)		(22,363	)
Income tax recovery (expense)			729			31
Net loss			(23,337	)		(22,332	)
Basic and diluted loss per share	21		(0.30	)		(0.49	)
Weighted average number of shares outstanding-basic and diluted			78,174,946			45,433,489

The notes are an integral part of these consolidated financial statements.

3 

Osisko Development Corp.

Consolidated Statements of Comprehensive Loss

For the three months ended March 31, 2023 and 2022

(Unaudited)

(Expressed in thousands of Canadian dollars)

	2023			2022
	$			$
Net loss		(23,337	)		(22,332	)
Other comprehensive income (loss), net of tax
Items that will not be reclassified to the consolidated statements of loss
Changes in fair value of financial assets at fair value through comprehensive income		(4,244	)		(361	)
Income tax effect		-			21
Items that may be reclassified to the consolidated statements of loss
Currency translation adjustments		(5,263	)		384
Other comprehensive income (loss), net of tax		(9,507	)		44
Comprehensive loss		(32,844	)		(22,288	)

The notes are an integral part of these consolidated financial statements.

4 

Osisko Development Corp.

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(Unaudited)

(Expressed in thousands of Canadian dollars)

		2023			2022
	Notes	$			$
Operating activities
Net loss			(23,337	)		(22,332	)
Adjustments for:
Share-based compensation			2,076			1,881
Depreciation	18,19		3,551			3,447
Finance costs			1,288			447
Share of loss of associates	6		113			331
Change in fair value of financial assets and liabilities at fair value through profit and loss	6		-			227
Change in fair value of warrant liability			9,174			-
Unrealized Foreign exchange loss (gain)			(6,475	)		(524	)
Deferred income tax expense (recovery)			(729	)		(31	)
Premium on flow-through shares			-			(341	)
Cumulative catch-up adjustment on contract liability	13		182			-
Proceeds from contract liability	13		(340	)		-
Environmental rehabilitation obligations			(1,493	)		-
Other			(477	)		(373	)
Net cash flows used in operating activities before changes in non-cash working capital items			(16,467	)		(17,268	)
Changes in non-cash working capital items	22		3,628			372
Net cash flows used in operating activities			(12,839	)		(16,896	)
Investing activities
Mining interests			(10,613	)		(9,661	)
Additions to Property, plant and equipment			(8,042	)		(3,373	)
Additions to Exploration and evaluation			(5,015	)		(5	)
Proceeds on disposals of investments	6		585			21,055
Acquisition of other investments			-			(4,438	)
Other			-			(264	)
Net cash flows used in investing activities			(23,085	)		3,314
Financing activities
Proceeds from equity financings	16		51,756			42,390
Other issuance of common shares			38			-
Share issue expense	16		(2,773	)		(2,130	)
Deferred Financing Fees			-			(1,396	)
Capital payments on lease liabilities	12		(409	)		(4,992	)
Long-term debt	11		4,720			3,870
Repayment of long-term debt	11		(1,278	)		(605	)
Net cash flows provided from (used in) financing activities			52,054			37,137
Increase (decrease) in cash before impact of exchange rate			16,130			23,555
Effects of exchange rate changes on cash			91			(161	)
Increase (decrease) in cash			16,221			23,394
Cash – Beginning of period			105,944			33,407
Cash – end of period			122,165			56,801

The notes are an integral part of these consolidated financial statements.

5 

Osisko Development Corp.

Consolidated Statements of Changes in Equity

For the three months ended March 31, 2023

(Unaudited)

(Expressed in thousands of Canadian dollars except number of shares)

		Number of										Accumulated
		common										other
		shares		Share						Contributed		comprehensive
	Notes	Outstanding		capital			Warrants			surplus		income (loss)			Deficit			Total
				($)			($)			($)		($)			($)			($)
Balance – January 1, 2023	16		75,629,849		1,032,786			1,573			12,857		7,166			(323,948	)		730,434
Net loss			-		-			-			-		-			(23,337	)		(23,337	)
Other comprehensive loss, net			-		-			-			-		(9,507	)		-			(9,507	)
Comprehensive loss			-		-			-			-		(9,507	)		(23,337	)		(32,844	)
Transfer of realized loss on financial assets at fair value through other comprehensive income, net of taxes			-		-			-			-		60			(60	)		0
Bought deal financing	16		7,841,850		45,545			6,211			-		-			-			51,756
Shares issued to Williams Lake First Nation	16		10,000		75			-			-		-			-			75
Share issue expense	16		-		(2,991	)		(408	)		-		-			-			(3,399	)
Change in fair value related to warrant modification	16		-		-			4,483			-		-			(4,483	)		-
Share options - Share-based compensation			-		-			-			828		-			-			828
Equity-settled compensation plan			-		-			-			1,367		-			-			1,367
Shares issued - employee share purchase plan			16,939		97			-			-		-			-			97
Share issued from RSU/DSU Redemption			-		-			-			-		-			-			-
Balance – March 31, 2023			83,498,638		1,075,512			11,859			15,052		(2,281	)		(351,828	)		748,314

The notes are an integral part of these consolidated financial statements.

6 

Osisko Development Corp.

Consolidated Statements of Changes in Equity

For the three months ended March 31, 2022

(Unaudited)

(Expressed in thousands of Canadian dollars except number of shares)

		Number of										Accumulated
		common										other			Retained
		shares		Share						Contributed		comprehensive			earnings
	Notes	Outstanding		capital			Warrants			surplus		income (loss)			(deficit)			Total
				($)			($)			($)		($)			($)			($)
Balance – January 1, 2022			44,400,854		714,373			-			6,436		6,764			(143,371	)		584,202
Net loss			-		-			-			-		-			(22,332	)		(22,332	)
Other comprehensive loss			-		-			-			-		44			-			44
Comprehensive loss			-		-			-			-		44			(22,332	)		(22,288	)
Private placements – Brokered			3,175,283		41,723			667			-		-			-			42,390
Share-issue costs			-		(2,096	)		(34	)		-		-			-			(2,130	)
Share options - Share-based compensation			-		-			-			888		-			-			888
Equity-settled compensation plan			-		-			-			1,077		-			-			1,077
Shares issued - employee share purchase plan			11,741		185			-			-		-			-			185
Transfer of realized gain on financial assets at fair value through other comprehensive income, net of taxes			-		-			-			-		(11,970	)		11,970			-
Balance – March 31, 2022			47,587,878		754,185			633			8,401		(5,162	)		(153,733	)		604,324

(i) The common shares outstanding presented have been adjusted to reflect the effect of the 3:1 share consolidation that took place on May 4, 2022. Common share, warrants and per share amounts have been adjusted for the 3:1 share consolidation unless noted otherwise.

The notes are an integral part of these consolidated financial statements.

7 

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

1. Nature of operations and Liquidity

Osisko Development Corp. (“Osisko Development” or the “Company”) is a mineral exploration and development company focused on the acquisition, exploration and development of precious metals resource properties in North America. The common shares of Osisko Development began trading under the symbol ODV on the TSX Venture Exchange (“TSX-V”) on December 2, 2020 and on the New York Stock Exchange (“NYSE”) on May 27, 2022. Osisko Development is focused on exploring and developing its mining assets, including the Cariboo Gold Project in British Columbia, the San Antonio gold project in Mexico and the Trixie test mine in the USA.

The Company’s registered and business address is 1100, avenue des Canadiens-de-Montréal, suite 300, Montreal, Québec. The common shares outstanding presented have been retroactively adjusted to reflect the effect of the 3:1 share consolidation that took place on May 4, 2022. Common share warrants and per share amounts have been adjusted retroactively for the 3:1 share consolidation unless noted otherwise.

On March 31, 2023, the former parent Company, Osisko Gold Royalties (OGR) held an interest of 44.1% (compared to 44.1% as at December 31, 2022) in Osisko Development Corp. Effective September 30, 2022, following certain changes made to OGR’s investment agreement with Osisko Development, it was determined that OGR no longer controlled Osisko Development.

The principal subsidiaries of the Company and their geographic locations at March 31, 2023 were as follows:

Entity	Jurisdiction	% ownership
Barkerville Gold Mines Ltd. (“Barkerville”)	British Columbia		100	%
Sapuchi Minera, S. de R.L. de C.V. (“Sapuchi”)	Mexico		100	%
Tintic Consolidated Metals LLC (“Tintic”)	USA		100	%

As at March 31, 2023, the Company’s working capital was $109.5 million, which included cash of $122.2 million. The Company incurred a loss of $23.2 million for the three months ended on March 31, 2023. With the financings completed in March 2023 (note 16), management believes that the Company will have sufficient funds to meet its obligations and planned expenditures for the ensuing twelve months as they fall due. In assessing whether the going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. In order to execute on its planned activities, the Company will be required to secure additional financing in the future, which may be completed in several ways including, but not limited to, a combination of selling additional investments from its portfolio, project debt finance, offtake or royalty financing and other capital market alternatives. Failure to secure future financings may impact and/or curtail the planned activities for the Company, which may include, but are not limited to, the suspension of certain development activities and the disposal of certain investments to generate liquidity.

2. Basis of presentation and Statement of compliance

These condensed interim consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”) (“IFRS”) and as applicable to the preparation of interim financial statements, including IAS 34 Interim Financial Reporting. Accordingly, certain disclosures included in the annual financial statements prepared in accordance with IFRS have been condensed or omitted and these condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022. The accounting policies, methods of computation and presentation applied in the preparation of these condensed interim consolidated financial statements are consistent with those of the previous financial year, unless otherwise noted.

New accounting standards and amendments

The following pronouncements to existing accounting standards were effective on January 1, 2023:

· Amendment to IAS 12 Income taxes to require companies to recognize deferred tax on particular transactions that, on initial recognition,give rise to equal amounts of taxable and deductible temporary differences.

· Narrow scope amendment to IAS 1 Presentation of Financial Statements to improve accounting policy disclosures.

8

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

2. Basis of presentation and Statement of compliance (continued)

· Narrow scope amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to distinguidh changes in accounting estimates from changes in accounting policies.

No material impact was identified in connection with the adoption of these amendments.

The Board of Directors approved these condensed interim consolidated financial statements on May 9, 2023

3. Cash

As at March 31, 2023 and 2022, the consolidated cash position was as follows:

	March 31, 2023		December 31, 2022
	$		$
Cash held in Canadian dollars		68,228		32,444
Cash held in U.S. dollars		39,831		54,242
Cash held in U.S. dollars (Canadian equivalent)		53,904		73,465
Cash held in Mexican Pesos		454		565
Cash held in Mexican Pesos (Canadian equivalent)		33		35
Total cash		122,165		105,944

4. Amounts receivable

	March 31, 2023		December 31, 2022
	$		$
Trade receivables		474		1,777
Exploration tax credits		1,792		8,360
Sales taxes		439		889
Other		219		20
		2,924		11,046

9

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

5. Inventories

	March 31, 2023		December 31, 2022
	$		$
Ore in stockpiles		6,760		5,943
Tailings		2,497		2,616
Gold-in-circuit inventory		2,028		4,451
Refined precious metals		2,147		37
Supplies and other		3,858		4,594
Total  inventories		17,290		17,641

Refined precious metals, gold-in-circuit and ore in stockpiles are measured at the lower of weighted average production cost and net realizable value. Net realizable value is calculated as the difference between the estimated selling price and estimated costs to complete processing into a saleable form plus variable selling expenses. Production costs include the cost of materials, labour, mine site production overheads and depreciation to the applicable stage of processing.

6. Investments in associates & other investments

Investments in associates

	March 31, 2023			December 31, 2022
	$			$
Balance – Beginning of period		8,833			12,964
Transfer to Other investments		-			(15,344	)
Share of loss and comprehensive loss, net		(113	)		(641	)
Gain on deemed disposal(i)		-			11,854
Balance – End of period		8,720			8,833

(i) In 2022, the gain on deemed disposal is related to an investment in an associate that was transferred to other assets as the Company has considered that it has lost its significant influence over the investee.

10

Osisko Development Corp.

Notes to the Consolidated Financial Statements  

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

6. Investments in associates & other investments (continued)

Other investments

	March 31, 2023			December 31, 2022
	$			$
Fair value through profit or loss (warrants & convertible loan)
Balance – Beginning of period		18			6,952
Acquisitions		-			4,438
Exercises		-			(117	)
Acquisition of Tintic		-			(10,827	)
Change in fair value		-			(480	)
Foreign exchange		-			52
Balance – End of period		18			18
Fair value through other comprehensive income (shares)
Balance – Beginning of period		33,801			42,564
Acquisitions		-			329
Disposals		(585	)		(22,585	)
Change in fair value		(4,244	)		(1,849	)
Transfer from associates		-			15,342
Balance – End of period		28,972			33,801
Total		28,990			33,819

Other investments comprise of common shares and warrants, almost exclusively from Canadian publicly traded companies.

11

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

7. Mining interests

	March 31, 2023			December 31, 2022
	$			$
Cost – Beginning of period		583,669			475,621
Acquisition of Tintic		-			169,175
Additions		9,637			49,297
Mining tax credit		(62	)		(6,404	)
Asset retirement obligation		2,048			9,248
Depreciation capitalized		1,048			1,141
Share-based compensation capitalized		76			530
Transfers		-			-
Impairment		-			(140,000	)
Other adjustments		1,990			5,579
Currency translation adjustments		1,626			19,482
Cost – End of period		600,032			583,669
Accumulated depreciation – Beginning of period		3,190			-
Depreciation		472			2,964
Currency translation adjustments		314			226
Accumulated depreciation – End of period		3,976			3,190
Cost		600,032			583,669
Accumulated depreciation		(3,976	)		(3,190	)
Net book value		596,056			580,479

Osisko Gold Royalties Ltd (former parent) holds a 5% NSR royalty on the Cariboo and Bonanza Ledge properties, owned by Barkerville, and a 15% gold and silver stream on the San Antonio and Tintic properties. The Cariboo and Bonanza Ledge properties 5% NSR royalty is perpetual and is secured by a debenture on all of Barkerville movable and immovable assets, including Barkerville’s interest in the property and mineral rights, in an amount of not less than $150 million. The security shall be first ranking, subject to permitted encumbrances.

12

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

8. Property, plant and equipment

	Land and Buildings		Machinery and Equipment			Construction- in-progress			March 31, 2023			December 31, 2022
	$		$			$			$			$
Cost– Beginning of period		27,980		80,208			23,721			131,909			93,241
Acquisition of Tintic		-		-			-			-			13,054
Additions		542		5,019			2,229			7,790			29,409
Disposals		-		(88	)		(102	)		(190	)		(1,351	)
Write-off		-		-			-			-			(5,455	)
Other adjustments		-		(532	)		-			(532	)		(896	)
Transfers		571		123			(694	)		-			-
Currency translation adjustments		160		1,281			783			2,224			3,907
Cost – End of period		29,253		86,011			25,937			141,201			131,909
Accumulated depreciation – Beginning of period		4,468		15,745			-			20,213			9,529
Depreciation		723		3,573			-			4,296			12,869
Disposal		-		(7	)		-			(7	)		(192	)
Write-off		-		(434	)		-			(434	)		(2,687	)
Currency translation adjustments		55		511			-			566			694
Accumulated depreciation – End of period		5 ,246		19,388			-			24,634			20,213
Net book value		24,007		66,623			25,937			116,567			111,696

Property, plant and equipment includes right-of-use assets with a net carrying value of $3.6 million as at March 31, 2023 ($3.8 million as at December 31, 2022).

13

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

9. Exploration and evaluation

	March 31, 2023			December 31, 2022
	$			$
Net book value - Beginning of period		55,126			3,635
Acquisition of Tintic		-			38,508
Additions		5,020			10,786
Depreciation capitalized		193			80
Other adjustments		-			(460	)
Currency translation adjustments		(40	)		2,577
Net book value – End of period		60,299			55,126
Cost		160,506			155,333
Accumulated impairment		(100,207	)		(100,207	)
Net book value – End of period		60,299			55,126

10. Accounts payable and accrued liabilities

	March 31, 2023		December 31, 2022
	$		$
Trade payables		14,340		18,057
Other payables		2,470		5,005
Income taxes payable		-		716
Accrued liabilities		8,661		7,328
		25,471		31,106

14

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

11. Long-term debt

	March 31, 2023			December 31, 2022
	$			$
Balance – Beginning of period		16,919			3,764
Additions- mining equipment financing		4,720			17,772
Repayment of liabilities		(1,278	)		(4,860	)
Currency translation adjustments		(3	)		243
Balance – End of period		20,358			16,919
Current long-term debt		5,399			4,663
Non-current long-term debt		14,959			12,256
		20,358			16,919

12. Lease liabilities

	March 31, 2023			December 31, 2022
	$			$
Balance – Beginning of period		2,170			9,866
Acquisition of Tintic		-			325
Additions		-			1,328
Repayment of liabilities		(409	)		(6,945	)
Lease modifications and extinguishment		-			(2,418	)
Currency translation adjustments		6			14
Balance – End of period		1,767			2,170
Current liabilities		845			1,208
Non-current liabilities		922			962
		1,767			2,170

15

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

13. Contract liability

On November 20, 2020, the Company’s wholly owned subsidiary Sapuchi completed a gold and silver stream agreement with Osisko Bermuda Ltd, a subsidiary of Osisko Gold Royalties for US$15.0 million ($19.1 million). An amount of US$10.5 million was contributed in November 2020 and the remaining US$4.5 million was paid in February 2021.

Under the terms of the stream agreement, Osisko Bermuda Ltd will purchase 15% of the payable gold and silver from the San Antonio gold project at a price equal to 15% of the daily per ounce gold and silver market price. The initial term of the stream agreement is for 40 years and can be renewed for successive 10-year periods. The stream is also secured with (i) a

first priority lien in all of the collateral now owned or hereafter acquired; (ii) a pledge by Osisko Development of its shares of Sapuchi Minera Holdings Two B.V. and (iii) a guarantee by Osisko Development. The interest rate used to calculate the accretion on the contract liability’s financing component is 24%.

On September 26, 2022, Tintic completed a metals stream agreement with Osisko Bermuda Ltd, for US$20 million ($26.1 million).

Under the terms of the stream agreement, Osisko Bermuda Ltd will receive 2.5% of the refined metal production from Tintic until 27,150 ounces of refined gold have been delivered, and thereafter Osisko Bermuda Ltd will receive 2.0% of the refined metal production from Tintic. Osisko Bermuda Ltd will make ongoing cash payments to Tintic equal to 25% of the applicable spot metal price on the business day immediately preceding the date of delivery for each ounce of refined metal delivered pursuant to the stream agreement. The interest rate used to calculate the accretion on the contract liability’s financing component is 5%.

The movement of the contract liability is as follows:

	March 31, 2023			December 31, 2022
	$			$
Balance – Beginning of period		55,193			24,820
Deposits		-			26,112
Proceeds from contract liability		(340	)		(2,792	)
Accretion on the contract liability’s financing component		2,315			7,377
Cumulative catch-up adjustment		182			(4,362	)
Currency translation adjustment		2,376			4,038
Balance – End of period		59,726			55,193
Current liabilities		631			941
Non-current liabilities		59,095			54,252
		59,726			55,193

Under IFRS 15, the stream agreements are considered to have a significant financing component. The Company therefore records notional non-cash interest, which is subject to capitalization into Mining interests, as borrowing costs.

16

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

14. Environmental rehabilitation provision

	March 31, 2023			December 31, 2022
	$			$
Balance – Beginning of period		75,770			53,236
Acquisition of Tintic		-			4,599
New liabilities		487			22,353
Revision of estimates		573			(5,637	)
Accretion expense		735			3,223
Settlement of liabilities / payment of liabilities		(505	)		(3,409	)
Currency translation adjustment		807			1,405
Balance – End of period		77,867			75,770
Current liabilities		3,122			9,738
Non-current liabilities		74,745			66,032
		77,867			75,770

The environmental rehabilitation provision represents the legal and contractual obligations associated with the eventual closure of the Company’s mining interests, property, plant and equipment and exploration and evaluation assets. As at March 31, 2023, the estimated inflation-adjusted undiscounted cash flows required to settle the environmental rehabilitation amounts to $89.5 million. The weighted average actualization rate used is 3.77% and the disbursements are expected to be made between 2023 and 2030 as per the current closure plans.

15. Warrant Liability

The Company completed a non-brokered private placement, issuing non-brokered subscription receipts on May 27, 2022, each non-brokered subscription receipt holder received one unit comprised of one common share and one common share purchase warrant, upon the listing of Osisko Development’s common shares on the NYSE. Each warrant entitling the holder to purchase one additional common share at a price of USD$18.00 per common share for a period of 5 years from the date of issue. On March 17, 2023, the Company received the required approvals to reduce the exercise price of the common share purchase warrants issued in 2022 under the non-brokered private placements from US$18.00 to US$10.70.

These warrants include an embedded derivative as they are exercisable in U.S. dollars and, therefore, fail the “fixed for fixed” requirements prescribed in IAS 32 Financial Instruments: presentation. As a result, they are classified as a liability and measured at fair value. The liability is revalued at its estimated fair value using the Black-Scholes model at the end of each reporting period, and the variation in the fair value is recognized on the consolidated statements of loss under other gains (losses), net.

17

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

15. Warrant Liability (continued)

	March 31, 2023			December 31, 2022
	$			$
Fair value through profit or loss (warrants)
Balance – Beginning of period		16,395			-
Additions		-			39,841
Change in fair value		9,174			(25,008	)
Foreign exchange		(14	)		1,562
Balance – End of period		25,555			16,395

For the period ended March 31, 2023, the Company recognized an unrealized loss of $9.2 million on the fair value adjustment of the warrant liability.

In absence of quoted market prices, the valuation of the warrants exercisable in USD, when granted and re-measured at fair value is determined by the Black-Scholes option pricing model based on the following range of assumptions:

	March 31, 2023			December 31, 2022
Dividend per share		-			-
Expected volatility		65.6	%		69.0	%
Risk-free interest rate		3.58	%		4.00	%
Expected life		4.2 years			4.4 years
Exercise price (USD)	$	10.70		$	18.00
Share price (USD)	$	4.90		$	4.30

16. Share capital and warrants

Shares

Authorized: unlimited number of common shares, without par value

Issued and fully paid: 83,498,638 common shares

Employee Share Purchase Plan

The Company offers an employee share purchase plan to its employees. Under the terms of the plan, the Company contributes an amount equal to 60% of the eligible employee’s contribution towards the acquisition of common shares from treasury on a quarterly basis. Under this plan, no employee shall acquire common shares which exceed 10% of the issued and outstanding common shares of the issuer at the time of the purchase of the common shares.

2023 Bought Deal Financing

On March 2, 2023, the Company completed a public offering on a bought deal basis issuing 7,841,850 units at a price of $6.60 per unit for aggregate gross proceeds of $51.8 million (the “Bought Deal Financing”). Each unit is comprised of one common share and one warrant, with each warrant entitling the holder to purchase one additional common share at a price of $8.55 per common share for a period of 3 years following the closing date of the Bought Deal Financing. The fair value of the warrants issued was evaluated using the residual method and were valued at $6.2 million. Share issue expense related to the Bought Deal Financing amounted to $3.4 million of which $2.8 million was paid during the three months ended March 31, 2023 and have been allocated against the common shares and warrants issued.

18

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

16. Share Capital and warrants (continued)

Participation Agreement with Williams Lake First Nation

On March 2, 2023, the Company issued 10,000 common shares of the Company in accordance with the terms of a participation agreement dated June 10, 2022 with the Williams Lake First Nation relating to the Company’s Cariboo Gold Project. The fair value of the common shares issued is calculated with reference to the share price of the Company’s common shares.

Warrants

The following table summarizes the Company’s movements for the warrants outstanding:

	March 31, 2023				December 31, 2022
	Number of Warrants		Weighted average exercise price		Number of Warrants(iii)		Weighted average exercise price
			$				$
Balance – Beginning of period		24,046,640		17.86		4,929,791		30.00
Issued – Brokered private placement		-		-		7,752,917		22.80
Issued – Non-brokered private placement(i)		-		-		11,363,932		13.53
Issued – Bought deal financing(ii)		7,841,850		8,55
Balance – End of period		31,888,490		15.57		24,046,640		17.86

The warrants have a maturity date of Dec 1, 2023, March 2, 2026 and March 2, 2027

(i) Exercise price of warrants issued in non-brokered private placement is in USD.

(ii) On March 17, 2023, the Company received the required approvals to reduce the exercise price of the common share purchase warrants issued in 2022 under the brokered and non-brokered private placements. The exercise price to purchase one additional common share was reduced from $22.80 to $14.75 for the brokered private placement and from US$18.00 to US$10.70 for the non-brokered private placements.

The increase in fair value of the amended share purchase warrants classified as equity instruments was estimated to $4.5 million and recorded directly in the Deficit, considering the fair value of the original warrants left at the date of the modification, using the Black-Scholes option pricing model based on the following assumptions:

Dividend per share	-
Expected volatility		66	%
Risk-free interest rate		2.9	%
Expected life		4 years
Share price	$	6.20

(iii) The number of options presented for 2022 have been adjusted to reflect the effect of the 3:1 share consolidation that took place on May 4, 2022

19

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

17. Share-based compensation

Share options

The Company offers a share option plan to directors, officers, management, employees and consultants.

The following table summarizes information about the movement of the share options outstanding under the Company’s plan:

	March 31, 2023					December 31, 2022
				Weighted					Weighted
	Number of			average		Number of			average
	options			exercise price		options(i)			exercise price
				$					$
Balance – Beginning of period		1,812,450			11.52		697,841			21.21
Granted		-			-		1,245,400			6.43
Forfeited		(63,187	)		9.18		(130,791	)		14.74
Balance – End of period		1,749,263			11.61		1,812,450			11.52
Options exercisable – End of period		204,362			21.42		205,229			21.32

(i) The number of options presented for 2022 have been adjusted to reflect the effect of the 3:1 share consolidation that took place on May 4, 2022.

The following table summarizes the share options outstanding as at March 31, 2023:

Options outstanding
Grant date	Number(i)		Exercise price		Weighted average remaining contractual life (years)
	$
December 22, 2020		336,131		22.86		2.73
February 5, 2021		10,533		24.30		2.85
June 23, 2021		165,129		21.30		3.23
August 16, 2021		39,955		16.89		3.38
November 12, 2021		48,015		16.20		3.62
June 30, 2022		837,400		6.49		4.25
November 18, 2022		312,100		6.28		4.64
		1,749,263		11.61		3.88

(i) The number of options granted prior to May 4, 2023 have been adjusted to reflect the effect of the 3:1 share consolidation that took place on May 4, 2022.

20

Osisko Development Corp.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023 and 2022
(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

17. Share-based compensation (continued)

The options, when granted, are accounted for at their fair value determined by the Black-Scholes option pricing model based on the vesting period and on the following weighted average assumptions:

	March 31, 2023			December 31, 2022
Dividend per share		-			-
Expected volatility		64	%		64	%
Risk-free interest rate		3.3	%		3.3	%
Expected life		47 months			47 months
Weighted average share price	$	6.43		$	6.43
Weighted average fair value of options granted	$	3.27		$	3.27

The expected volatility is estimated by benchmarking with companies having businesses similar to Osisko Development. The historical volatility of the common share price of these companies was used for benchmarking back from the date of grant and for a period corresponding to the expected life of the options.  

The fair value of the share options is recognized as compensation expense over the vesting period. During the three months ended March 31, 2023, there was no grant.The total share-based compensation related to share options granted under the Osisko Development’s plan was $0.8 million ($0.9 million for the period ended March 31, 2022).

Deferred and restricted share units (“DSU” and “RSU”)

The following table summarizes information about the DSU and RSU movements:

	March 31, 2023					December 31, 2022
	DSU		RSU			DSU(i)			RSU
Balance – Beginning  of  period		206,426		1,054,194			79,781			345,377
Granted		-		-			137,528			794,500
Settled		-		-			(10,883	)		(49,118	)
Forfeited		-		(21,664	)		-			(36,565	)
Balance – End of period(iii)		206,426		1,032,530			206,426			1,054,194
Balance – Vested		68,898		-			68,898			-

(i) The number of DSU/RSU presented for 2022 have been adjusted to reflect the effect of the 3:1 share consolidation that took place on May 4, 2022.

21

Osisko Development Corp. 

Notes to the Consolidated Financial Statements 

For the three months ended March 31, 2023 and 2022 

(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

17. Share-based compensation (continued)

(ii) Unless otherwise decided by the board of directors of the Company, the DSU vest the day prior to the next annual general meeting and are payable in common shares, cash or a combination of common shares and cash, at the sole discretion of the Company, to each director when he or she leaves the board or is not re-elected. The value of the payout is determined by multiplying the number of DSU expected to be vested at the payout date by the closing price of the Company’s shares on the day prior to the grant date. The fair value is recognized over the vesting period. On the settlement date, one common share will be issued for each DSU, after deducting any income taxes payable on the benefit earned by the director that must be remitted by the Company to the tax authorities.

(iii) Following the launch of Osisko Development, Osisko Gold Royalties and Osisko Development mutually agreed that a pro-rata portion of the outstanding long-term equity incentive compensation awarded by Osisko Gold Royalties to their employees that transferred to Osisko Development would be exchanged for restricted shares units of Osisko Development (“Replacement RSU”) and the related Osisko Gold Royalties RSUs would be cancelled. Accordingly, on June 1, 2021, 458,450 Replacement RSU were granted to officers and employees who held Osisko Gold Royalties RSUs that were cancelled. The maturity date is the same as the maturity date of the corresponding Osisko Gold Royalties RSUs cancelled. Replacement RSUs are payable in common shares, cash or a combination of common shares and cash, at the sole discretion of the Company. The remaining RSUs granted vest and are payable in common shares, cash or a combination of common shares and cash, at the sole discretion of the Company, three years after the grant date, one half of which depends on the achievement of certain performance measures.

The total share-based compensation expense related to the Osisko Development’s DSU and RSU plans for the three months ended March 31, 2023 was $Nil ( $.6 million for the period ended March 31, 2022).

Based on the closing price of the common shares at March 31, 2023 ($6.59), and considering a marginal income tax rate of 53.3%, the estimated amount that Osisko Development is expected to transfer to the tax authorities to settle the employees’ tax obligations related to the vested RSU and DSU to be settled in equity amounts to $ .02 million ($.02 million as at December 31, 2022) and to $4.3 million based on all RSU and DSU outstanding ($3.9 million based on all RSUand DSU outstanding.

22

Osisko Development Corp. 

Notes to the Consolidated Financial Statements 

For the three months ended March 31, 2023 and 2022 

(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

18. Cost of sales and other operating costs

	March 31, 2023		March 31, 2022
	$		$
Salaries and benefits		1,656		2,882
Share-based compensation		82		125
Royalties		305		458
Contract Services		3,363		8,956
Raw materials and consumables		3,150		3,903
Operational overhead and write-downs		2,930		4,682
Depreciation		3,473		3,407
		14,959		24,413

19. General and administrative expenses

	March 31, 2023		March 31, 2022
	$		$
Salaries and benefits		3,580		1,368
Share-based compensation		1,992		1,756
Insurance		1,436		642
Depreciation		78		40
Legal and other consulting fees		1,655		3,762
Other administrative expenses		1,255		239
		9,996		7,807

23

Osisko Development Corp. 

Notes to the Consolidated Financial Statements 

For the three months ended March 31, 2023 and 2022 

(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

20. Other income, net

	March 31, 2023		March 31, 2022
	$		$
Interest income		1,257		83
Foreign exchange gain (loss)		6,556		369
Premium on flow-through shares		-		341
Other		1,003		795
		8,816		1,588

21. Loss per share

	March 31, 2023			March 31, 2022
	$			$
Net loss attributable to shareholders of the Company		(23,337	)		(22,332	)
Basic and diluted weighted average number of common shares outstanding		78,174,946			45,433,489
Net loss per share, basic and diluted		(0.30	)		(0.49	)

The weighted average basic and diluted shares outstanding for 2022 presented have been adjusted to reflect the effect of the 3:1 share consolidation that took place on May 4, 2022.

Excluded from the calculation of the diluted loss per share are all common share purchase warrants and stock options, as their effect would be anti-dilutive.

24

Osisko Development Corp. 

Notes to the Consolidated Financial Statements 

For the three months ended March 31, 2023 and 2022 

(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

22. Supplementary cash flows information

	March 31, 2023			March 31, 2022
	$			$
Changes in non-cash working capital items
Decrease (increase) in amounts receivable		7,599			214
Decrease (Increase) in inventory		693			(6,417	)
Decrease (increase) in other current assets		975			(1,005	)
Increase (decrease) Accounts payable and accrued liabilities		(5,639	)		7,580
		3,628			372

23. Fair value of financial instruments

The following table provides information about financial assets and liabilities measured at fair value in the consolidated statements of financial position and categorized by level according to the significance of the inputs used in making the measurements.

Level 1– Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2– Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

Level 3–Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

	March 31, 2023
	Level 1		Level 2		Level 3		Total
	$		$		$		$
Recurring measurements
Financial assets at fair value through profit or loss
Convertible loan receivable		-		-		-		-
Warrants on equity securities
Publicly traded mining exploration and development companies
Precious metals		-		-		18		18
Other minerals		-		-		-		-
Financial assets at fair value through other comprehensive loss
Equity securities
Publicly traded mining exploration and development companies
Precious metals		9,564		-		-		9,564
Other minerals		19,408		-		-		19,408
		28,972		-		18		28,990

25

Osisko Development Corp. 

Notes to the Consolidated Financial Statements 

For the three months ended March 31, 2023 and 2022 

(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

23. Fair value of financial instruments (continued)

	December 31, 2022
	Level 1		Level 2		Level 3		Total
	$		$		$		$
Recurring measurements
Financial assets at fair value through profit or loss
Convertible loan receivable		-		-		-		-
Warrants on equity securities
Publicly traded mining exploration and development companies
Precious metals		-		-		18		18
Other minerals		-		-		-		-
Financial assets at fair value through other comprehensive loss
Equity securities
Publicly traded mining exploration and development companies
Precious metals		9,537		-		-		9,537
Other minerals		24,264		-		-		24,264
		33,801		-		18		33,819

During the period ended March 31, 2023 and 2022 there were no transfers among Level 1, Level 2 and Level 3.

The following table presents the changes in the Level 3 investments (warrants and convertible loan) for the three months ended March 31, 2023 and the year ended December 31, 2022:

	March 31, 2023		December 31, 2022
	$		$
Balance – Beginning of period		18		6,952
Acquisitions		-		4,438
Warrants exercised		-		(117	)
Acquisition of Tintic		-		(10,827	)
Change in fair value – warrants exercised (i)		-		49
Change in fair value – expired (i)		-		(287	)
Change in fair value – held at the end of the year (i)		-		(241	)
Foreign exchange		-		51
Balance – End of period		18		18

(i)  Recognized in the consolidated statements of loss under other income, net.

The fair value of the financial instruments classified as Level 3 depends on the nature of the financial instruments.

26

Osisko Development Corp. 

Notes to the Consolidated Financial Statements 

For the three months ended March 31, 2023 and 2022 

(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

23. Fair value of financial instruments (continued)

The fair value of the warrants on equity securities of publicly traded mining exploration and development companies and the convertible debentures, classified as Level 3, is determined using the Black-Scholes option pricing model or discounted cash flows. The main non-observable input used in the model is the expected volatility. An increase/decrease in the expected volatility used in the models of 10% would lead to an insignificant variation in the fair value of the warrants as at March 31, 2023 and December 31, 2022.

Financial instruments not measured at fair value on the consolidated statements of financial position

Financial instruments that are not measured at fair value on the consolidated statement of financial position are represented by cash, trade receivables, amounts receivable from associates and other receivables, notes receivable, accounts payable and accrued liabilities and long-term debt. The fair values of cash, trade receivables, amounts receivable from associates and other receivables, accounts payable and accrued liabilities and short-term debt approximate their carrying values due to their short-term nature. The carrying value of the long-term debt approximates its fair value given that its interest rates are similar to the rates the Company would obtain under similar conditions at the reporting date.

24. Segmented information

The chief operating decision-maker organizes and manages the business under geographic segments, being the acquisition, exploration and development of mineral properties.

The assets related to the exploration, evaluation and development of mining projects are located in Canada, in Mexico, and in the USA and are detailed as follows as at March 31, 2023 and December 31, 2022:

	March 31, 2023
	Canada		Mexico		USA		Total
	$		$		$		$
Other assets (non-current)		16,631		19,338		3,818		39,787
Mining interest		379,155		20,920		195,981		596,056
Property, plant and equipment		62,211		22,115		32,241		116,567
Exploration and evaluation assets		3,653		-		56,646		60,299
Total non-current assets (Excluding investments)		461,650		62,373		288,686		812,709

27

Osisko Development Corp. 

Notes to the Consolidated Financial Statements 

For the three months ended March 31, 2023 and 2022 

(Unaudited)

(Tabular amounts expressed in thousands of Canadian dollars, except per share amounts)

24. Segmented information (continued)

	December 31, 2022
	Canada		Mexico		USA		Total
	$		$		$		$
Other assets (non-current)		16,252		17,485		3,257		36,994
Mining interest		372,061		16,822		191,596		580,479
Property, plant and equipment		63,655		21,688		26,353		111,696
Exploration and evaluation assets		3,653		-		51,473		55,126
Total non-current assets (Excluding investments)		455,621		55,995		272,679		784,295

	Canada			Mexico			USA			Total
	$			$			$			$
For the period ended March 31, 2023
Revenues		674			2,689			88			3,451
Cost of sales		(674	)		(2,520	)		(1,212	)		(4,406	)
Other operating costs		(7,475	)		(2,805	)		(273	)		(10,553	)
General and administrative expenses		(7,850	)		(726	)		(1,420	)		(9,996	)
Exploration and evaluation		(740	)		(67	)		-			(807	)
Segment operating loss		(16,065	)		(3,429	)		(2,817	)		(22,311	)

	Canada			Mexico			USA		Total
	$			$			$		$
For the period ended March 31, 2022
Revenues		9,167			-			-		9,167
Cost of sales		(9,167	)		-			-		(9,167	)
Other operating costs		(7,372	)		(7,874	)		-		(15,246	)
General and administrative expenses		(6,657	)		(1,150	)		-		(7,807	)
Exploration and evaluation		(120	)		-			-		(120	)
Segment operating loss		(14,149	)		(9,024	)		-		(23,173	)

28