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MONTREAL, QUEBEC--(Marketwire - Feb. 28, 2011) - Osisko
Mining Corporation (the "Company" or "Osisko") (TSX:OSK)(FRANKFURT:EWX)
is pleased to report its review of activities and financial results for
the year ended December 31, 2010.
Highlights
-- Continued progress on the construction of the Canadian Malartic Project ("Project") with outlays of $484.1 million in 2010 for a total project cost to date of $888.0 million; -- Completed the acquisition of Brett Resources Inc. and the Hammond Reef Project; -- Continued aggressive exploration and infill drilling with 409,200 metres drilled during the year; -- Incurred a net loss of $19.5 million in 2010 compared to $20.8 million in 2009; -- Completed a $17.2 million flow-through financing; -- Secured additional financing though the drawdown of the second tranche of $75 million under the CPPIB Credit Investments Inc. Credit Facility; -- Completed the relocation program at the Canadian Malartic Project; -- Implemented a Shareholder Rights Plan; -- Signed a Resource Sharing Agreement with the First Nations for the Hammond Reef gold property.
During the fourth quarter of
2010, the Company incurred a loss of $1.2 million ($0.00 per share)
compared to a loss of $8.4 million ($0.03 per share) in the
corresponding period of 2009. For the year-to-date, the loss amounted
to $19.5 million ($0.05 per share) compared to $20.8 million ($0.08 per
share) in 2009. Higher administrative costs reflecting the growth in
the Company's activities and higher non-cash charges from the issuance
of stock options in the third quarter of 2010 were more than offset by foreign
exchange gains on mainly the US dollar denominated capital lease
obligations following the strengthening of the Canadian dollar against
the US currency, higher interest income and higher unrealized gains on
held-for-trading financial assets.
Sean Roosen, President and CEO commenting on
the 2010 activities noted: "We are pleased with the progress we
have achieved in 2010 towards our goal to become a leading intermediate
gold producer. Construction has advanced significantly at the Canadian Malartic Project and we look forward to commencing
operations in May in a very strong gold price environment".
Canadian Malartic Project
The Canadian Malartic Project is reaching
completion, with construction approximately 90% complete at the end of
December 2010. Major accomplishments during the quarter include:
-- Advancement of mechanical, electrical and piping installations in the mill to a 90% completion rate; -- Commissioning of all mobile mining equipment as per the original mine plan; -- Completion of the relocation program; -- Completion of the "green wall" to mitigate the impact of the mining activities on the community; -- Recruitment and training of the workforce for the operational phase; -- Ramp-up of mining pre-stripping activities.
At year-end, $888.0 million
had been directly spent on the Project, with an additional $30.3
million committed.
The Project is scheduled for commencement of operations in May 2011,
with capital estimates for the Project under the one billion dollar
mark.
Acquisition of Brett Resources
On May 19, 2010, the Company acquired 77% of Brett Resources Inc.
("Brett") following a friendly takeover offer announced on
March 22, 2010. Under the terms of the offer, Osisko
issued 0.34 shares of Osisko and $0.0001 in
cash in return for each share of Brett. On August 11, 2010, 94% of
Brett shareholders approved a Plan of Arrangement to combine with Osisko, thereby allowing Brett to become a
wholly-owned subsidiary of Osisko. The
subsidiary modified its name to Osisko
Hammond Reef Gold Ltd. effective October 6, 2010.
The acquisition of the Hammond Reef deposit enhances Osisko's reserve and resource base and provides the
opportunity to see Osisko become a one
million ounce per year gold producer by 2015-2016.
The Hammond Reef gold project is located near Atikokan,
Ontario. A Preliminary Assessment Study (the "Study") was
completed in November 2009 outlining an initial 14 year mine life
operating at 50,000 tonnes per day. Over the
first six years, on average, Hammond Reef is expected to produce
463,000 ounces of gold per year at cash costs of US$382 per ounce
(including royalties, net of silver credits). Over the life of mine,
Hammond Reef is expected to produce a total of 5.13 million ounces of
gold at an average rate of 369,000 ounces per year and average cash
costs of US$442 per ounce (including royalties, net of silver credits).
Using a gold price of US$990 per ounce the Study shows that Hammond
Reef has an after-tax net present value of US$811 million (using a 5%
discount rate) and an internal rate of return of 22.9%. The study is
available on SEDAR.
In addition to the current resource, Hammond Reef offers exciting
exploration potential as recent drilling has confirmed continuity of
mineralization down-dip from the existing resource.
In December 2010, the Company signed the Hammond Reef Resource Sharing
Agreement with eight First Nations communities. The original terms of
the agreement were negotiated with Brett Resources and Osisko concluded the transaction.
Other Highlights
The Company has continued to pursue its efforts to build on its current
reserve/resource base. Approximately 409,200 metres
have been drilled in 2010, including 78,600 metres
drilled during the fourth quarter. The focus has been the Hammond Reef
Project with some 176,300 metres being
completed and the Duparquet Joint Venture
with approximately 123,000 metres being
completed.
The Company is continuing its dialogue with the municipal and
provincial authorities with respect to the deviation of Highway 117 to
allow for the mining of the Barnat deposit. Osisko is working in partnership with the town of Malartic, Quebec Ministry of Transportation and
Ministry of Natural Resources and Wildlife.
In the fourth quarter of 2010, the Company completed a flow-through
financing by issuing 982,827 shares for gross proceeds of $17.2 million
to help fund its exploration program.
Highlights from the Company's financial position are as follows (in
millions of dollars):
-------------------------------------------------- 2010 2009 -------------------------------------------------- Cash Position(1) 397.9 790.2 Working Capital 283.1 760.4 Total Assets 2,064.3 1,338.8 Total Debt 287.9 180.1 Shareholders' Equity 1,588.3 1,112.3 Net Loss (19.5) (20.8) Net Loss per Share (0.05) (0.08) --------------------------------------------------
(1) Includes Cash and Cash equivalents,
Short-term investments, Restricted cash and Cash collateral.
The consolidated financial statements and Management Discussion and
Analysis for the year ended December 31, 2010 will be filed on SEDAR
prior to March 31, 2011.
Osisko Mining Corporation is currently
developing the Canadian Malartic gold
deposit, evaluating adjacent areas for a large-scale open pit,
bulk-tonnage mining operation and pursuing exploration of the Hammond
Reef Project. The Company is well-funded with approximately $400
million on hand.
Cautionary Notes Concerning Estimates of Mineral Resources
This news release uses the terms measured,
indicated and inferred resources as a relative measure of the level of
confidence in the resource estimate. Readers are cautioned that mineral
resources are not economic mineral reserves and that the economic
viability of resources that are not mineral reserves has not been
demonstrated. In addition, inferred resources are considered too
geologically speculative to have any economic considerations applied to
them. It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the basis
of feasibility or pre-feasibility studies or economic studies except
for Preliminary Assessment as defined under NI 43-101. Readers are
cautioned not to assume that that further work will lead to mineral
reserves that can be mined economically.
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.
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