Osisko Releases First Quarter 2010 Results

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MONTREAL, QUEBEC--(Marketwire - May 5, 2010) - Osisko Mining Corporation (the "Company") (TSX:OSK)(FRANKFURT:EWX) is pleased to report its first quarter financial results for the period ended March 31, 2010.

Highlights

  • Announced 42.8% increase in reserves to 8.97 million ounces of gold (245.8 million tonnes @ 1.13 g/t Au) with the definition drilling of the Barnat deposit and the extension of the Canadian Malartic Project.
  • Continued progress on the construction and development of the Canadian Malartic Project with outlays of $99 million.
  • Announcement of friendly takeover bid on Brett Resources Inc., owner of the Hammond Reef gold project.
  • On-going exploration activities on seven projects with more than 79,000 metres drilled in the quarter, including commencement of drilling at the Duparquet Project.
  • Extension received for the drawdown of the second tranche of $75 million under CPPIB credit facility.
  • Net income of $1.3 million.

During the first quarter of 2010, the Company's profit amounted to $1.3 million ($0.00/share) compared to a loss of $0.8 million ($0.00/share) in the corresponding period of 2009. The profit is mainly attributable to the future income tax recovery of $2.9 million derived from the renunciation of exploration expenses to subscribers of the $14.4 million flow-through share issues in 2009, and a $2.9 million gain on foreign exchange, partially offset by higher stock based compensation expenses.

Canadian Malartic Project

The Canadian Malartic Project is progressing well with the advancement rate reaching approximately 50% completion. Key milestones during the quarter included:

  • Completion of the detailed engineering;
  • Finalization of equipment and bulk material purchases;
  • Awarding of electrical, mechanical and piping installation contracts valued at more than $60 million;
  • Completion of the administrative/truck shop building;
  • Significant advance on the concrete foundation and steel erection work at the process plant;
  • Initiation of mine pre-stripping work;
  • Near completion of the relocation program with the delivery of the community centre and initiation of the closure of the southern Malartic neighbourhood;
  • Advancement of the electrical infrastructures for the 120kV power line.

Total direct investment during the quarter amounted to $99 million. To date, the Company's investment has reached $503 million, with additional commitments for $224 million. Total outlays and commitments of $727 million represent 78% of budget. The construction of the Project is expected to be completed in the second quarter of 2011.

Reserve/Resource Growth

The Company announced in early February, following the inclusion of the Barnat South deposit and additional drilling at Canadian Malartic, that proven and probable reserves stood at 245.8 million tonnes at an average grade of 1.13 g/t for 8.97 million ounces of gold. The reserves are based on 0.34 g/t cut grade and using $825 per ounce gold price (see February 10, 2010 press release).

The Company is continuing to aggressively pursue the growth on its reserve/resource base with active drilling campaigns on seven gold projects. Some 78,800 metres of drilling were completed during the first quarter.

Friendly Takeover Bid – Brett Resources Inc.

Osisko formally launched a friendly takeover bid of Brett Resources Inc., owner of the Hammond Reef Gold Project, by offering 0.34 common share of Osisko and $ 0.0001 in cash for each common share of Brett. The offer is open until May 19, 2010.

A Preliminary Assessment Study (the "Study") was completed by Brett in November 2009 outlining an initial 14-year mine life operating at 50,000 tonnes per day. Over the first six years, on average, Hammond Reef is expected to produce 463,000 ounces of gold per year at cash costs of US$382 per ounce (including royalties, net of silver credits). Over the life of mine, Hammond Reef is expected to produce a total of 5.13 million ounces of gold at an average rate of 369,000 ounces per year and average cash costs of US$442 per ounce (including royalties, net of silver credits). Using a gold price of US$990 per ounce the Study shows that Hammond Reef has an after-tax net present value of US$811 million (using a 5% discount rate) and an internal rate of return of 22.9%.

In addition to the current resource, Hammond Reef offers exciting exploration potential as recent drilling confirmed continuity of mineralization along strike two kilometers northeast of the existing resource. Brett has also identified several parallel structures in the project area that host mineralization similar to the main body.

Mr. Sean Roosen, President and CEO, commented on the first quarter's activities: "We are pleased with the on-going progress at the Canadian Malartic Project and with the response that we have received following the announcement of our offer to acquire Brett Resources Inc. We are well on our way to building the next leading intermediate gold producer."

Highlights from the Company's financial position are as follows (in millions of dollars):

  March 31, 2010 December 31, 2009
Cash Position(1) 670.6 790.2
Working Capital 638.0 760.4
Total Assets 1,357.4 1,338.8
Shareholders' Equity 1,117.4 1,112.3

(1) Includes Cash and Cash equivalents, Short-term investments, Restricted cash and Cash collateral.

The financial statements and Management Discussion and Analysis for the period ended March 31, 2010, will be filed on SEDAR by May 15, 2010.

Osisko Mining Corporation is currently developing the Canadian Malartic gold deposit and evaluating adjacent areas for a large-scale open pit, bulk-tonnage mining operation. The Company is well-funded with approximately $670 million on hand.

Forward Looking Statements

Certain statements contained in this Press Release, may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Corporation expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, including, without limitation that all technical, economical and financial conditions will be met in order (i) to put the Canadian Malartic Project into commercial production, or (ii) to complete the acquisition of Brett Resources Inc., such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include gold prices, access to skilled mining development and mill production personnel, results of exploration and development activities, the Corporation's limited experience with production and development stage mining operations, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations market prices, continued availability of capital and financing and general economic, market or business conditions. These factors are discussed in greater detail in the Corporation's most recent Annual Information Form filed on SEDAR, which also provides additional general assumptions in connection with these statements. The Corporation cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the Corporation's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct



Osisko Mining Corporation
John Burzynski
Vice-President Corporate Development
416-363-8653
or
Osisko Mining Corporation
Sylvie Prud'homme
Investor Relations
514-735-7131
Toll Free: 1-888-674-7563
www.osisko.com