UPDATE 1-Osisko to buy Brett Resources for $367 million

* Osisko says deal is accretive to long-term cash flow

* Brett agrees to pay termination fee equal to C$17.5 mln (Adds deal details)

March 22 (Reuters) - Canada's Osisko Mining Corp OSK.TO said it will buy Brett Resources Inc BBR.V for about C$372 million ($367 million) in an all stock deal which establishes the company as a diversified gold producer.

Osisko said it will offer to buy each of Brett’s common shares in exchange for 0.34 of its shares. The offer values Brett at C$2.92 a share, a 40 percent premium to Brett’s last traded price of C$2.09.

Shares of Osisko closed at C$8.59 Friday on Toronto Stock Exchange.

The number of Osisko shares to be issued will be approximately 36.4 million, the Montreal, Quebec-based company said in a statement.

Osisko said the deal is accretive to its long-term cash flow and production. It expects initial average production of 463,000 ounces of gold per year.

Brett has agreed to pay Osisko a termination fee equal to $17.5 million. ($1=1.015 Canadian Dollar) (Reporting by Anuradha Ramanathan in Bangalore; Editing by Lincoln Feast) ((; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800: Reuters Messaging: