VANCOUVER – Goldcorp has announced its intention to take over Osisko Mining Corp., offering C$2.6 billion in cash and shares for the Quebec-based miner. Goldcorp is offering Osisko shareholders 0.146 of a Goldcorp common share plus C$2.26 in cash for each Osisko common share. Based on Goldcorp's TSX closing price on Jan. 10, the offer represents C$5.95 per Osisko share, or a premium of 28% over Osisko's 20-day volume weighted average price for the period ending Jan. 10.
Osisko's chief asset is its Canadian Malartic gold mine at Malartic, QC, and its 10-million-oz of gold contained in reserves. Total proven and probable mineral reserves the beginning of 2013 were estimated at 310.6 million tonnes averaging 1.01 g/t Au for 10.1 million oz. The company had a 2013 production target of 485,000 oz, and as of Q3 cash costs per ounce were US$754.
Also in Osisko's portfolio is a long list of exploration projects. Those that have reached the advanced stage are Malartic CFL in Quebec and the Hammond Reef and Upper Beaver projects in Ontario. Less advanced projects are scatted from Nova Scotia to Manitoba, as well as in Mexico, Argentina and the United States.
Goldcorp says the merger will boost per share metrics in key areas of cash flows, asset value, gold production and reserves. The cash generated by the Canadian Malartic mine will also help fund Goldcorp's growth projects at Cerro Negro in Argentina, Éléonore in Quebec, and Cochenour in Ontario.
"This combination offers excellent strategic value as Canadian Malartic and its talented operating team will benefit from Goldcorp's strong financial position, technical expertise and commitments to safety and sustainability," said Goldcorp president and CEO Chuck Jeannes. "Our clear preference remains to engage with Osisko, as we strongly believe in the compelling strategic and financial merits of this transaction to the mutual benefit of both companies' shareholders."
As for Osisko's response, the company said in a news release that its board of directors "will consider this announcement as well as any formal offer actually made. Until the corporation completes its review, it will not comment further or speculate as to any future course of action it might take."
Information for shareholders will be available on either company's website, Goldcorop.com and OsiskoMining.com.
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