Osisko Development Corp. — Interim / Quarterly Report 2021

May 12, 2021

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OSISKO DEVELOPMENT CORP.

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

Unaudited Condensed Interim Consolidated Financial Statements

For the three months ended March 31, 2021

Osisko Development Corp. Consolidated Balance Sheets (Unaudited)

(tabular amounts expressed in thousands of Canadian dollars)

Notes Assets Current assets Cash 3 Amounts receivable Inventories 4 Other assets Non-current assets Investments in associates 5 Other investments 5 Mining interests 6 Property, plant and equipment 7 Exploration and evaluation 8 Other assets 4 Liabilities Current liabilities Accounts payable and accrued liabilities Deferred premium on flow-through shares 11 Lease liabilities 9 Contract liability 10 Environmental rehabilitation provision 12 Non-current liabilities Lease liabilities 9 Contract liability 10 Environmental rehabilitation provision 12 Deferred income and mining taxes Equity Share capital 13 Shares to be issued Contributed surplus Accumulated other comprehensive income Deficit	March 31, 2021 $ 200,980 9,023 18,386 3,287 231,676 12,057 86,469 407,086 35,225 41,977 24,083 838,573 34,752 7,415 1,453 1,929 2,854 48,403 1,843 18,183 31,220 12,908 112,557 716,589 - 1,468 32,782 (24,823) 726,016 838,573	December 31, 2020
		$ 197,427 6,977 10,025 4,049
		218,478 9,636 100,508 385,802 21,198 41,869 24,653
		802,144
		37,636 - 578 1,606 3,019
		42,839 1,457 12,401 31,582 14,299
		102,578
		613,127 73,945 69 15,018 (2,593)
		699,566
		802,144

APPROVED ON BEHALF OF THE BOARD

(signed) Sean Roosen , Director

(signed) Charles Page , Director

2

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

Osisko Development Corp. Consolidated Statements of Loss For the three months ended March 31, 2021 and 2020 (Unaudited)

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

Notes Operating expenses Compensation General and administrative Exploration and evaluation, net of tax credits Operating loss Interest income Accretion expense Foreign exchange loss Share of loss of associates 5 Other gains, net 11 Loss before income taxes Income tax (expense) recovery Net loss Basic and diluted loss per share Weighted average number of shares outstanding	2021 $ (1,787) (3,077) (337) (5,201) 312 (114) (1,065) (407) 1,592 (4,883) 1,182 (3,701) (0.03) 128,865,352	2020
		$ (597) (608) (42)
		(1,247) 30 (798) - (559) 2,424
		(150) - (175)
		(325) (0.00) 100,000,100

As further described in Note 2, the information for the period prior to November 25, 2020 is presented on a carve-out basis.

3

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

Osisko Development Corp. Consolidated Statements of Comprehensive Loss For the three months ended March 31, 2021 and 2020 (Unaudited)

(tabular amounts expressed in thousands of Canadian dollars)

Net loss Other comprehensive income (loss) 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 Income tax effect Share of other comprehensive income of associates Items that may be reclassified to the consolidated statements of loss Currency translation adjustments Other comprehensive loss Comprehensive loss	2021 $ (3,701) 1,703 (476) - (1,992) (765) (4,466)	2020
		$ (325) (17,385) 941 - -
		(16,444)
		(16,679)

As further described in Note 2, the information for the period prior to November 25, 2020 is presented on a carve-out basis.

4

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

Osisko Development Corp. Consolidated Statements of Cash Flows For the three months ended March 31, 2021 and 2020 (Unaudited)

(tabular amounts expressed in thousands of Canadian dollars)

Notes Operating activities Net loss Adjustments for: Share-based compensation Depreciation Accretion and finance expense Share of loss of associates Net gain on acquisition of investments Change in fair value of financial assets at fair value through profit and loss Unrealized gain on dilution 5 Foreign exchange loss Deferred income tax expense (recovery) Other Contract liability proceeds 10 Net cash flows used in operating activities before changes in non-cash working capital items Changes in non-cash working capital items 15 Net cash flows used in operating activities Investing activities Mining interests Property, plant and equipment Exploration and evaluation expenses, net of tax credits Proceeds on disposals of investments Acquisition of investments Reclamation deposit Net cash flows used in investing activities Financing activities Private placements of common shares and warrants 13 Share issue expense 13 Capital payments on lease liabilities 9 Investments from parent company Net cash flows provided by financing activities Increase (decrease) in cash before effects of exchange rate changes on cash Effects of exchange rate changes on cash Increase (decrease) in cash Cash – Beginning of period Cash – end of period	2021 $ (3,701) 1,203 21 120 407 - 80 (1,391) 744 (1,182) 468 5,653 2,422 (12,126) (9,704) (28,532) (7,267) (135) 14,897 (671) - (21,708) 38,841 (2,581) (647) - 35,613 4,201 (648) 3,553 197,427 200,980	2020
		$ (325) 173 168 798 559 (2,951) 661 - - 175 - -
		(742) (1,194)
		(1,936)
		(14,835) - (116) - - (201)
		(15,152)
		- - - 11,882
		11,882
		(5,206)
		-
		(5,206) 8,006
		2,800

Additional information related to the consolidated statements of cash flows is presented in Note 15.

As further described in Note 2, the information for the period prior to November 25, 2020 is presented on a carve-out basis.

5

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

Osisko Development Corp.

Consolidated Statements of Changes in Equity For the three months ended March 31, 2021

(Unaudited)

(tabular amounts expressed in thousands of Canadian dollars)

Notes Balance - January 1, 2021	Number of common shares Outstanding 118,950,545 - - - - 10,862,195 3,390,242 - - - - 133,202,982	Accumulated other Retained Share Contributed comprehensive earnings capital surplus income(loss) (deficit) Total	Accumulated other Retained Share Contributed comprehensive earnings capital surplus income(loss) (deficit) Total
		($) ($) ($) ($) ($) 687,072 69 15,018 (2,593) 699,566 - - - (3,701) (3,701) - - (765) - (765)
Net loss Othercomprehensiveloss
Comprehensive loss		- - (765) (3,701) (4,466) - - 18,529 (18,529) - 6,157 - - - 6,157 25,257 - - - 25,257 (1,897) - - - (1,897) - 623 - - 623 - 541 - - 541 - 235 - - 235
Transfer of realized loss on financial assets at fair value through other comprehensive income, net of taxes Private placements – Non-brokered 13 Private placements – Flow-through 13 Issue costs on financings (net of income taxes) 13 Share options - Share-based compensation
Restricted share units from parent company - Share-based compensation
Deferred share units to be settled in common shares - Share-based compensation
Balance – March 31, 2021		716,589 1,468 32,782 (24,823)	726,016

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

6

Osisko Development Corp.

Consolidated Statements of Changes in Equity For the three months ended March 31, 2020

(Unaudited)

(tabular amounts expressed in thousands of Canadian dollars)

Notes Balance - January 1, 2020	Number of common shares Outstanding(i) 100,000,100 - - - - 100,000,100	Accumulated Net parent other company comprehensive investment income(loss) Total
		($) ($) 374,118 (19,104) 355,014 (325) - (325) - (16,444) (16,444)
Net earnings (loss) Othercomprehensiveincome
Comprehensive income (loss)		(325) (16,444) (16,769) 19,882 - 19,882
Net parent companyinvestment
Balance – March 31, 2020		393,675 (35,548) 358,127

(i) The shares issued to the parent upon the Reverse Take-Over transaction are deemed to have been issued and outstanding as at January 1, 2020 for purposes of these interim consolidated financial statements.

As further described in Note 2, the information for the period prior to November 25, 2020 is presented on a carve-out basis.

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

7

Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

1. Nature of operations

In November 2020, Osisko Gold Royalties Ltd (“Osisko Gold Royalties”) transferred mining properties and a portfolio of marketable securities to Barolo Ventures Corp. (“Barolo”), in exchange for common shares of Barolo, which resulted in a Reverse Take-Over of Barolo (the “RTO”) under the policies of the TSX Venture Exchange (“TSX-V”) and which, in connection with the RTO, Barolo changed its name to Osisko Development Corp. (“Osisko Development”).

The common shares of Osisko Development began trading on the TSX Venture Exchange (the “TSX-V”) on December 2, 2020 under the symbol “ODV”. The Company’s registered and business address is 1100, avenue des Canadiens-deMontréal, suite 300, Montreal, Québec.

Osisko Development is focused on exploring and developing its mining assets, including the Cariboo and Bonanza Ledge II gold projects in British Columbia and the San Antonio gold project in Mexico.

2. Basis of presentation

These unaudited condensed interim consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34 Interim Financial Reporting . The condensed interim consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2020, which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies, methods of computation and presentation applied in these unaudited condensed interim consolidated financial statements are consistent with those of the previous financial year.

As further described in the Company’s last annual audited financial statements, the Company’s financial information for periods and dates prior to November 25, 2020, and thus the comparative financial information from January 1 to March 31, 2020 represents the carve-out financial information of the mining activities of Osisko Gold Royalties and reflect the activities, assets and liabilities of the Osisko Gold Royalties Contributed Assets on a “carve-out” basis, rather than representing the legal form applicable at the time.

The carve-out financial information has been derived from Osisko Gold Royalties historical accounting records and estimates that were established by Osisko Development’s management. The consolidated statements of loss and comprehensive loss include a pro rata of Osisko Gold Royalties income and expenses for assets attributable to the Company.

The Board of Directors approved the interim condensed consolidated financial statements on May 10, 2021.

Uncertainty due to COVID-19

The duration and full financial effect of the COVID-19 pandemic is unknown at this time, as are the measures taken by governments, companies and others to attempt to reduce the spread of COVID-19. Any estimate of the length and severity of these developments is therefore subject to significant uncertainty, and accordingly estimates of the extent to which the COVID-19 may materially and adversely affect the Company’s operations, financial results and condition in future periods are also subject to significant uncertainty, including potential restrictions on exploration and development sites access and supply chains disruptions that could delay the exploration and development plans of the main assets of the Company. In the current environment, the assumptions and judgements made by the Company are subject to greater variability than normal, which could in the future significantly affect judgments, estimates and assumptions made by management as they relate to potential impact of the COVID-19 and could lead to a material adjustment to the carrying value of the assets or liabilities affected. The impact of current uncertainty on judgments, estimates and assumptions extends, but is not limited to, the Company’s valuation of its long-term assets, including the assessment for impairment and impairment reversal. Actual results may differ materially from these estimates.

8

Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

3. Cash

As at March 31, 2021 and December 31, 2020, cash held in U.S. dollars amounted respectively to US$44.9 million ($56.5 million) and US$47.2 million ($60.1 million).

4. Inventories

	Three months ended Year ended March 31, December 31, 2021 2020	Three months ended Year ended March 31, December 31, 2021 2020	Three months ended Year ended March 31, December 31, 2021 2020
		$ $
	Current
	Ore in stockpiles	15,483	8,426 - 1,599
	Gold-in-circuit inventory	881
	Supplies	2,022
			10,025
	Total current inventories	18,386
	Non-current
	Ore in stockpiles(i)	16,598	17,279

(i) The non-current Ore in stockpiles is presented in the other assets line item on the consolidated balance sheets.

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. The cost of ore stockpiles is increased based on the related current cost of production for the period. Stockpiles are segregated between current and non-current based on the period of planned usage.

5. Investments in associates & other investments

Investments in associates

Three	months ended March 31, 2021 9,636	Year ended
		December 31,
		2020
		$
Balance – Beginning of period		14,284
Acquisitions	-	972
Exercise of warrants	1,437	36
Share of loss and comprehensive loss, net	(407)	(2,015)
Net gain on ownership dilution	1,391	-
Gain on deemed disposals(i)	-	5,357
Transfers to other investments (i)	-	(8,998)
Balance – End of period	12,057	9,636

(i) In 2020, the gain on deemed disposals is related to investments in certain associates that were transferred to other investments as the Company has considered that it has lost its significant influence over the investees.

9

Osisko Development Corp.

Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

5. Investments in associates & other investments (continued)

Other investments

Three months ended Year ended March 31, 2021 December 31, 2020	Three months ended Year ended March 31, 2021 December 31, 2020	Three months ended Year ended March 31, 2021 December 31, 2020
Fair value through profit or loss (warrants)		$ $
	Balance – Beginning of period	1,892 529 - 769 (766) (7) (80) 601
	Acquisitions Exercises Change in fair value
		1,046 1,892
	Balance–End of period
Fair value through other comprehensive income (shares)
Balance – Beginning of period		98,616 43,544
Acquisitions Transfer from associates Change in fair value Disposals		- 12,047 - 8,998 1,704 34,027 (14,897) -
Balance–End of period		85,423 98,616
Total		86,469 100,508

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

6. Mining interests

Three months ended Year ended	Three months ended Year ended	Three months ended Year ended
		March 31, 2021 December 31, 2020
		$ $
Balance – Beginning of period Acquisition of the San Antonio gold project Additions Mining tax credit Asset retirement obligation Depreciation capitalized Share-based compensation capitalized Sale of a royalty(i) Other adjustments Currency translation adjustments Balance – End of period		385,802 263,938
		- 57,038
		24,764 71,006
		(1,728) (4,608)
		- 3,414
		684 4,019
		240 688
		- (13,000)
		(267) -
		(2,409) 3,307
		407,086 385,802

(i) In November 2020, Osisko Gold Royalties exercised its option to purchase an additional 1% NSR royalty on the Cariboo and the Bonanza Ledge Phase 2 gold projects for $13.0 million.

10

Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

6. Mining interests (continued)

Osisko Gold Royalties holds a 5% NSR royalty on the Cariboo and Bonanza Ledge properties and a 15% gold and silver stream on the San Antonio property (Note 10). The Cariboo and Bonanza Ledge properties 5% NSR royalty is perpetual and is secured by a debenture on all of Barkerville Gold Mines Ltd (“Barkerville”) movable and immovable assets, including Barkerville’s interest in the property and mineral rights, in an amount of not less than $150 million and a debenture on all of Williams Creek’s movable and immovable assets, including Williams Creek’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.

7. Property, plant and equipment

Three months ended Year ended March 31, 2021 December 31, 2020	Three months ended Year ended March 31, 2021 December 31, 2020	Three months ended Year ended March 31, 2021 December 31, 2020
	March 31, 2021
	$	$
Cost– Beginning of period	25,713	14,015
Acquisition of San Antonio gold project	-	1,330
Additions	14,924	10,749
Disposals	(23)	-
Write-off	(534)	(388)
Currency translationadjustments	(113)	7
Cost – End ofperiod	39,967	25,713
Accumulated depreciation – Beginning of period	4,515	245
Depreciation	752	4,270
Disposals	-	-
Write-off	(525)	-
	4,742	4,515
Accumulated depreciation – End of period
Net book value
Cost	39,967	25,713
Accumulated depreciation	(4,742)	(4,515)
	35,225	21,198
Net book value

Property, plant and equipment includes right-of-use assets of $4.4 million as at March 31, 2021 ($2.4 million as at December 31, 2020).

11

Osisko Development Corp.

Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

8. Exploration and evaluation

Three months ended Year ended (March 31, 2021 ) December 31, 2020)	Three months ended Year ended (March 31, 2021 ) December 31, 2020)	Three months ended Year ended (March 31, 2021 ) December 31, 2020)
Net book value – December 31, 2020	($ ) ($) 41,869 42,949
	41,869
Additions	108	201
Conversions to royalties(i)	-	(631)
Sale of royalties (ii)	-	(650)
Net book value – End ofperiod		41,869
	41,977
Balance – End of period
Cost	100,167	100,059
Accumulatedimpairment	(58,190)	(58,190)
Net book value – End of period		41,869
	41,977

(i) In 2016, Osisko Gold Royalties entered into earn-in agreements for properties in the James Bay area. In 2019 and 2020, the ownership of certain properties were transferred to the counterparty of the earn-in agreements, and the Company retained royalties on these properties. The earn-in agreements were terminated by the parties in 2020.

(ii) In 2020, Osisko Gold Royalties acquired a 3% NSR royalty on the exploration and evaluation properties owned by Osisko Development prior to the closing of the Arrangement for $0.7 million.

9. Lease liabilities

The movement of the lease liabilities for the three months ended March 31, 2021 is as follows:

Three months ended Year ended (March 31, 2021 ) December 31, 2020)	Three months ended Year ended (March 31, 2021 ) December 31, 2020)	Three months ended Year ended (March 31, 2021 ) December 31, 2020)
Balance – Beginning of period Additions	($ ) ($ ) 2,035 - 1,865 2,394
	2,035
	1,865
Repayment of liabilities	(604)	(359)
Balance – End ofperiod		2,035
	3,296
Current liabilities	1,453	578
Non-currentliabilities	1,843	1,457
		2,035
	3,296

The lease liabilities are related to mining equipment and vehicles.

12

Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

10. Contract liability

On November 20, 2020, Sapuchi Minera, S. de R.L. de C.V 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 paid 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%.

The movement of the contract liability is as follows:

Three months ended Year ended (March 31, 2021 ) December 31, 2020)	Three months ended Year ended (March 31, 2021 ) December 31, 2020)	Three months ended Year ended (March 31, 2021 ) December 31, 2020)
Balance – Beginning of period	($ ) ($ ) 14,007 -
	14,007
Deposits	5,653	13,824
Accretion on the contract liability’s financing component	1,178	350
Currency translationadjustment	(726)	(167)
Balance – End ofperiod		14,007
	20,112
Current liabilities		1,606
	1,929
Non-currentliabilities	18,183	12,401
		14,007
	20,112

Under IFRS 15, the stream agreement is 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.

11. Flow-through shares liability

Three months ended Year ended (March 31, 2021 ) December 31, 2020 )	Three months ended Year ended (March 31, 2021 ) December 31, 2020 )	Three months ended Year ended (March 31, 2021 ) December 31, 2020 )
Balance – Beginning of period		($ ) ($) - -
	Deferred premiumon flow-throughsharesissued,net ofshareissue	7,885 -
	costs (Note 13)
	Recognitionofdeferred premiumon flow-throughshares	(470) -
Balance – End of period		7,415 -

The Company is committed to spending the proceeds on exploration activities by December 31, 2022. As at March 31, 2021, the balance remaining to be spent totals $31.6 million.

13

Osisko Development Corp.

Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

12. Environmental rehabilitation provision

Three months ended Year ended (March 31 2021 ) December 31, 2020 )	Three months ended Year ended (March 31 2021 ) December 31, 2020 )	Three months ended Year ended (March 31 2021 ) December 31, 2020 )	Three months ended Year ended (March 31 2021 ) December 31, 2020 )
	($ ) ($ )
Balance – Beginning of period	34,601		20,527 9,301 4,176 (310) 820 (500) 587
Acquisition of San Antonio gold project	-
New liabilities	-
Revision of estimates	(379)
Accretion expense	272
Settlement of liabilities / payment of liabilities	(46)
Currency translationadjustment	(374)
Balance – End ofperiod		34,601
	34,074
		3,019 31,582
Current liabilities	2,854
Non-currentliabilities	31,220
		34,601
	34,074

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, 2021, the estimated inflation-adjusted undiscounted cash flows required to settle the environmental rehabilitation amounts to $39.6 million. The weighted average actualization rate used is 3.41% and the disbursements are expected to be made between 2021 and 2030 as per the current closure plans.

13. Share capital and warrants

Shares

Authorized

Unlimited number of common shares, without par value

Issued and fully paid 133,202,982 common shares

Non-brokered private placement

In January and February 2021, Osisko Development closed the first and final tranches respectively of a non-brokered private placement for 10,862,195 units of Osisko Development at a price of $7.50 per unit (or the Canadian dollar equivalent of US$5.75 per unit) for aggregate gross proceeds of approximately $79.8 million. Each unit consists of one common share of Osisko Development and one-half of one common share purchase warrant of Osisko Development, with each whole warrant entitling the holder thereof to acquire one common share of Osisko Development at a price of $10.00 per share (or the prevailing U.S. dollar equivalent at the time of exercise) on or prior to December 1, 2023. Share issue expenses related to this private placement amounted to $1.1 million ($0.8 million net of income taxes).

14

Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

13. Share capital and warrants (continued)

S hares (continued)

Flow-Through and Charity Flow-Through financing

In March 2021, the Company closed a bought deal private placement of: (i) 2,055,742 flow-through shares (“FT Shares”) of the Company at a price of $9.05 per FT Shares; and (ii) 1,334,500 charity flow-through shares of the Company (“Charity FT Shares”) at a price of $11.24 per Charity FT Share, for aggregate gross proceeds of $33.6 million. The carrying value of the FT shares and the Charity FT shares is presented net of the liability related to the premium on FT shares of $7.9 million, which was recorded at the date of the issuance of the FT shares and the Charity FT shares. Share issue expenses related to this private placement amounted to $1.5 million ($1.1 million net of income taxes).

Warrants

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

	Three months ended March 31, 2021 Year ended December 31, 2020	Three months ended March 31, 2021 Year ended December 31, 2020	Three months ended March 31, 2021 Year ended December 31, 2020
	Weighted	Weighted
	Number of Warrants average exercise price Number of Warrants average exercise price
	$		$
Balance – Beginning of period Issued – bought-deal private placement(i) Issued – brokered private placement(i) Issued– non-brokered private placement(i)	9,358,525 10.00 -		- 10.00 10.00 -
	- -	6,675,000
	- -	2,683,525
	5,431,098 10.00	-
Balance – End of period(i)	14,789,623 10.00 9,358,525		10.00

(i) The warrants have a maturity date of December 1, 2023.

15

Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

14. Share-based compensation

Share options

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

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

		Three months ended March 31, 2021	Three months ended March 31, 2021	Year ended December 31, 2020
		Number of options 1,199,100 31,600 (66,900) 1,163,800 -	Weighted average exercise price	Weighted Number of average options exercise price
Balance – Beginning of period Granted			$ 7.62 8.10 7.62 7.63 -	$ - - 1,199,100 7.62
Forfeited				- -
Balance – End of period Options exercisable – End of period				1,199,100 7.62
				- -

The following table summarizes the share options outstanding as at March 31, 2021:

Grant date December 23, 2020 February 4, 2021	Options outstanding
	Number Exercise price Weighted average remaining contractual life(years)
	$ $ 1,132,200 7.62 3.73 31,600 8.10 3.85
	1,163,800 7.63 3.74

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:

	Three months ended	Year ended
	March 31, 2021	December 31, 2020
Dividend per share	-	-
Expected volatility	63%	63%
Risk-free interest rate	0.4%	0.4%
Expected life	48 months	48 months
Share price	$8.10	$7.62
Fair value of options granted	$3.96	$3.64

The expected volatility was estimated by benchmarking with companies having businesses similar to Osisko Development.

16

Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

14. Share-based compensation (continued)

Share options (continued)

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, 2021, the total share-based compensation related to share options granted under the Company’s plan on the consolidated statements of loss amounted to $0.4 million (nil for the three months ended March 31, 2020), including $0.2 million capitalized to mining assets (nil for the three months ended March 31, 2020).

Deferred and restricted share units

The Company offers a Deferred Share Unit (“DSU”) plan and a Restricted Share Unit (“RSU”) plan, which allow DSU and RSU to be granted to directors, officers and employees as part of their long-term compensation package. Under the plans, payments may be settled in the form of common shares, cash or a combination of common shares and cash, at the sole discretion of the Company. No RSU were granted in the three months period ended March 31, 2021.

No DSU were granted during the three months period ended March 31, 2021. The number of DSU outstanding as at March 31, 2021 is 170,620 and their weighted average value is $7.62 per DSU.

The share-based compensation costs related to the DSU for the period ended March 31, 2020 was $0.2 million (nil in 2020).

Parent Company’s share based compensation

Prior to the RTO transaction, the Parent Company, which refers to Osisko Gold Royalties, offered a share option plan and a RSU plan for the benefit of the Company’s senior management and directors. The fair value of the share options and RSU is recognized as compensation expense over the vesting period (carve-out basis). As at March 31, 2021, the total sharebased compensation related to share options and DSU granted under the Parent Company’s plan on the consolidated statements of loss was $0.8 million (insignificant in 2020).

15. Additional information on the consolidated statements of cash flows

	2021 2020
Changes in non-cash working capital items Increase in amounts receivable Decrease (increase) in inventory Decrease in other assets Decrease in accounts payable and accrued liabilities	($) ($) (717) (622) (8,691) 120 358 705 (3,076) (1,397)
	(12,126) (1,194)

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Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

16. Fair value of financial instruments

The following table provides information about financial assets and liabilities measured at fair value in the consolidated balance sheets 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, 2021	March 31, 2021	March 31, 2021
	Level 1 Level 2 Level 3 Total
	$ $ $ $ **Recurring measurements **
	Financial assets at fair value through profit or loss(i) Warrants on equity securities Publicly traded mining exploration and development companies Precious metals - - 701 701 Other minerals - - 345 345 Financial assets at fair value through other comprehensive loss(i) Equity securities Publicly traded mining exploration and development companies Precious metals 70,005 - - 70,005 Other minerals 15,418 - - 15,418
	Warrants on equity securities
	Publicly traded mining exploration and development companies Precious metals Other minerals
	Financial assets at fair value through other
	comprehensive loss(i)
	Equity securities
	Publicly traded mining exploration and development companies Precious metals Other minerals
		70,005 - - 15,418 - -
		85,423 - 1,046	86,469

	December 31, 2020	December 31, 2020	December 31, 2020
	Level 1 Level 2 Level 3 Total
	$ $ $ $ **Recurring measurements **
	Financial assets at fair value through profit or loss(i) Warrants on equity securities Publicly traded mining exploration and development companies Precious metals - - 1,162 1,162 Other minerals - - 730 730 Financial assets at fair value through other comprehensive loss(i) Equity securities Publicly traded mining exploration and development companies Precious metals 82,423 - - 82,423 Other minerals 16,193 - - 16,193
	Warrants on equity securities
	Publicly traded mining exploration and development companies Precious metals Other minerals
	Financial assets at fair value through other
	comprehensive loss(i)
	Equity securities
	Publicly traded mining exploration and development companies Precious metals Other minerals
		82,423 - -
		16,193 - -
			100,508
		98,616 - 1,892

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Osisko Development Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Unaudited)

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

16. Fair value of financial instruments (continued)

During the three months periods ended March 31, 2021 and 2020, there were no transfers among Level 1, Level 2 and Level 3.

The following table presents the changes in the Level 3 investments (warrants) for the three month period ended March 31, 2021 and the year ended December 31, 2020:

	2021 2020	2021 2020
	$ $ 1,892 529 - 769 (766) (7) 258 17 - (48) (338) 632
Balance – Beginning of period
Acquisitions Warrants exercised Change in fair value – warrants exercised(i) Change in fair value – deemed disposed(i) Change in fair value–held at the end of the period(i)
	258
	-
	(338)
		1,892
Balance – End ofperiod	1,046

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

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

The fair value of the warrants on equity securities of publicly traded mining exploration and development companies, classified as Level 3, is determined using the Black-Scholes option pricing model. 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, 2021 and December 31, 2020.

17. Segmented information

The chief operating decision-maker organizes and manages the business under a single operating segment, 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 and in Mexico, and are detailed as follows as at March 31, 2021:

Other assets (non-current) Mining interest Property, plant and equipment Exploration and evaluation assets Total assets	March 31, 2021 Canada Mexico Total	March 31, 2021 Canada Mexico Total
	$ $	$
	621 23,462 345,549 61,537 28,634 6,591 40,680 1,297	24,083 407,086 35,225 41,977
	415,484 92,887	508,371

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