MONTREAL, QUEBEC, Nov 06 (MARKET WIRE) --
Osisko Mining Corporation (the "Company")(TSX: OSK)(FRANKFURT: EWX) is
pleased to report its third quarter financial results for the period
ended September 30, 2009.
Highlights
- Receipt of Quebec Government authorizations to proceed with the
Canadian Malartic Project (the "Project");
- Commencement of construction of the Canadian Malartic Mine on August
27, 2009;
- Approaching completion of the Malartic relocation program;
- Completion of a $149.5 million equity financing; and
- Successful negotiation of two major debt financing agreements totalling
$225 million.
During the third quarter of 2009, the Company incurred a loss of $5.7
million ($0.02 per share) compared to a loss of $0.1 million ($0.00 per
share) in the corresponding period of 2008. For the first nine months of
2009, the Company has incurred a loss of $12.4 million ($0.05 per share)
compared to a net income of $3.5 million ($0.02 per share) generated in
the corresponding period of 2008.
Higher costs were incurred both in the quarter and the nine-month period
as a result of a significant increase in pre-mining construction
activities as the Company moves from an exploration company towards
becoming an intermediate gold development and operating company. The 2008
nine-month period results included an income tax recovery of $4.5 million
following renunciation of the tax attributes to the subscribers of the
$25 million flow-through financing of July 2007. The recovery in 2009 was
lower at $2.0 million as a result of a lower flow-through financing of
$12.25 million in 2008.
Following the receipt of the Conseil des ministres du Quebec order in
council authorizing the completion of the Canadian Malartic gold mine
project and the necessary permits, Osisko commenced construction of the
Project on August 27, 2009.
The Company mobilized several contractors to complement its own workforce
to initiate work at site. The successful mobilization has resulted in a
very good start to the Project with the following milestones having been
achieved:
1. Initiation of the foundation work on the mill and ancillary buildings.
Some 14,000 m3 of concrete were poured, highlighted by a continuous 2,760
m3 pour for the three ball mill foundations on September 29, 2009;
2. Initiation of the excavation work for the crusher;
3. Commencement of the construction of the polishing pond dams necessary
to allow for the dewatering of the existing East Malartic tailings area;
4. Start of the steel erection at the truck shop/administration building.
Some 200 contractors were on site by the end of the third quarter.
Significant progress has been achieved in the relocation program,
including the following milestones:
- Completion of the home relocation program with some 135
single/multi-unit residences being relocated to the new subdivision;
- Completion of the primary school, adult learning centre and day care
facility. Exchange of ownerships of new and old facilities have been
completed;
- Significant advancement on the three additional institutions with
expected completion of the subsidized housing unit and the community
centre in the fourth quarter of 2009, and the health facility in second
quarter of 2010;
- Transfer of ownership of the new town subdivision to the Town of
Malartic. Financial guarantees have been placed to secure completion of
work obligation to be done in the spring of 2010;
- Initiation of closure activities of the southern neighbourhood.
The Company also entered into several financing agreements during the
period to complete the funding requirements for the development of the
Project, including:
i. $149.5 million equity financing with a syndicate of underwriters
through the sale of 21.4 million shares at $7.00 per share completed on
September 1, 2009;
ii. An agreement with Societe generale de financement du Quebec ("SGF")
for a $75 million senior non-guaranteed debenture, convertible at the
discretion of the SGF into Osisko shares at a price of $9.18 per share,
carrying an interest rate of 7.5%. The initial capital is to be
reimbursed five years after the drawdown.
iii. A $150 million financing agreement with CPPIB Credit Investment Inc.
("CPPIB"), a wholly-owned subsidiary of the CPP Investment Board. Under
the terms of the agreement, the Company will have the ability to draw the
loan in two tranches:
1)Tranche A - An initial amount of $75 million to be drawn in November
2009. The Company has issued 7 million warrants exercisable before
September 24, 2014 at a price of $10.75 per share, representing a 30%
premium to the 15-day volume weighted average price ("VWAP") prior to
issuance. Proceeds are to be used for the development of the Project.
2)Tranche B - An amount of $75 million may be drawn at the discretion of
Osisko on March 31, 2010, for general corporate purposes. If the amount
is drawn, the Company will issue 5.5 million five-year warrants to
purchase common shares at a price of average 15-day VWAP prior to
drawdown, plus a 30% premium.
The CPPIB loan carries a 7.5% interest rate, is secured by assets of the
Company and is repayable from 50% of net cash flows (operating cash flows
less approved capital) from the Canadian Malartic Project. The SGF and
CPPIB transactions are expected to be completed in November 2009.
Mr. Sean Roosen, President and CEO, commented: "We have again achieved
significant milestones during this past quarter, on our road towards
building Osisko into what we believe will soon become the next premier
intermediate gold producer. Our focus now is on executing the
construction phase of this $1 billion dollar project on time and on
budget. Exploration on the other known zones on the main property is
continuing at full pace, and our experienced team is also working
diligently to identify new opportunities for the future growth of our
company."
Highlights from the Company's financial position are as follows (in
millions of dollars):
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September 30, 2009 December 31, 2008
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Cash Position(1) 454.1 95.7
Working Capital 427.5 92.7
Total Assets 878.8 318.2
Shareholders' Equity 809.7 267.3
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(1) Includes Cash and cash equivalents, Short-term investments,
Restricted cash and Cash collateral investments.
The financial statements and Management Discussion and Analysis for the
period ended September 30, 2009, will be filed on SEDAR by November 13,
2009.
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.
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
to put the Canadian Malartic Project into commercial production, 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
Contacts:
Osisko Mining Corporation
John Burzynski
Vice-President Corporate Development
514-735-7131
Osisko Mining Corporation
Sylvie Prud'homme
Investor Relations
514-735-7131
Toll Free: 1-888-674-7563
www.osisko.com
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