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TORONTO – The chief executive of Osisko Mining Corp. thinks the hostile bid for his company is not only bad for his shareholders, but negative for other investors in the gold mining space.
Speaking at the TD Securities Mining Conference in Toronto, Sean Roosen said if offers as low as Goldcorp Inc.’s $2.6-billion hostile bid become acceptable in the sector, then it is hard to see how portfolio managers can make money investing in emerging growth stories like Osisko.
“Losing access to a very entrepreneurial mid-tier [miner] that’s been a top performer in the space and the management team that built it, most [fund managers] feel that’s not helping their investment model,” he told reporters.
“And I think from an overall standpoint of investors, if you’re going to invest in growth assets and they’re going to trade at a zero premium at the end of the day, that doesn’t really make a business model for portfolio managers.”
Montreal-based Osisko has rejected Vancouver-based Goldcorp’s offer, saying it is opportunistic and much too low. Mr. Roosen now has to convince his investors to agree with him. He also has to demonstrate that the company’s Canadian Malartic mine in Quebec is worth far more within a single-mine company like Osisko than a huge company like Goldcorp.
Those were his main talking points on Tuesday. He said that many long-term shareholders are “very disappointed” by the Goldcorp bid, having stuck with Osisko for many years while the company brought Canadian Malartic into production.
Mr. Roosen said he himself was offended by the offer. He pointed out that this is not a typical example of a senior gold miner taking over a smaller player, since Osisko has a strong balance sheet, does not need to raise capital and is generating plenty of cash at its mine.
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