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TORONTO – As Sean Roosen sees it, Canadian Malartic is the second most valuable gold mine fully owned by a North American producer.
The chief executive of Osisko Mining Corp. said Thursday that his shares should be worth $10 to $12 each on the value of this asset alone, or as much as 58% above the current level. He spent all day in Toronto to try to get that point across to shareholders and convince them not to tender to Goldcorp Inc.’s hostile bid.
“There’s a lot of value left on the table here that we’ve been able to highlight,” he said in an interview. Mr. Roosen’s claims are based on Osisko’s updated mine plan for Canadian Malartic, which it released on Thursday. Based on that plan, Osisko estimates that the Quebec-based mine has a net present value of about $3.1-billion. And after accounting for the relative trading multiples of other gold miners, the company figures it should be valued at about $4.4-billion.
That is far above the $2.9-billion in cash and stock that Goldcorp currently has on the table. Goldcorp will almost certainly boost its offer in the weeks ahead, so the pressure is on Mr. Roosen to show this transaction is a bad idea.
“Fundamental shareholders don’t see the need for a transaction,” he said. “Canadian Malartic just came out of the chute. It’s a brand new mine, it’s in Quebec, it’s on grid power, and it has produced a million ounces. Everything else you look at is more complex.”
Montreal-based Osisko ranked many of the world’s biggest gold mines in terms of net present value, and it identified only one that it believes is worth more to a single company than Canadian Malartic: Barrick Gold Corp.’s Cortez mine in Nevada.
Osisko has its data room open to potential rival bidders, and Mr. Roosen said the activity has gotten “bigger, not smaller” in recent weeks. Most analysts think a rival bid for Osisko is possible, but unlikely given that so many gold miners are struggling to cut costs and regain investor confidence.
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