A CIBC report provided the rationale for adding
this Canadian company to its covered stocks.
In a Sept. 5 research note, analyst Bryce Adams reported that CIBC
initiated coverage on Osisko Mining Inc. (OSK:TSX) with an Outperformer rating
and a price target of CA$2.50 per share. The company is currently trading at
around CA$2.34 per share.
Adams reviewed the company's high-quality merits. One, he said, is that
the miner's Windfall project offers "significant upside well beyond the
conservative preliminary economic assessment (PEA)" and CIBC's base case
using spot prices, which offers a NAV5% of CA$318 million.
Upside at Windfall could come in the form of grade and/or tonnage,
explained Adams, both of which are near-term catalysts. "Our NPV5% would
increase by roughly 80% in our upside scenario," Adams indicated.
The way the grade was estimated in the PEA "limited the area of
influence of mineralized intersections." Thus, the additional infill
drilling that now is underway could result in a roughly 15% higher resource
grade.
As for tonnage, the use of narrower, less than 3.5 meters wide stopes,
which were excluded from the PEA, could "nearly double the mineable
resource," Adams noted. Further, exploration drilling would also likely
increase its size.
Along with Windfall's "significant resource upside potential,"
Adams noted, its other "high-quality merits" are the moderate risk
associated with it and the company's strong management team and its chances
of being taken out, all of which "offer compelling investor
appeal."
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Disclosures from CIBC, Osisko Mining Inc., September 5, 2018
Analyst Certification:
Each CIBC World Markets Corp./Inc. research analyst named on the front page
of this research report, or at the beginning of any subsection hereof, hereby
certifies that (i) the recommendations and opinions expressed herein
accurately reflect such research analyst's personal views about the company
and securities that are the subject of this report and all other companies
and securities mentioned in this report that are covered by such research
analyst and (ii) no part of the research analyst's compensation was, is, or
will be, directly or indirectly, related to the specific recommendations or
views expressed by such research analyst in this report.
Analysts employed outside the U.S. are not registered as research
analysts with FINRA. These analysts may not be associated persons of CIBC
World Markets Corp. and therefore may not be subject to FINRA Rule 2241
restrictions on communications with a subject company, public appearances and
trading securities held by a research analyst account.
Potential Conflicts of Interest:
Equity research analysts employed by CIBC World Markets Corp./Inc. are
compensated from revenues generated by various CIBC World Markets Corp./Inc.
businesses, including the CIBC World Markets Investment Banking Department. Research
analysts do not receive compensation based upon revenues from specific
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prohibits any research analyst and any member of his or her household from
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member of a company that such analyst covers.
In addition to 1% ownership positions in covered companies that are
required to be specifically disclosed in this report, CIBC World Markets
Corp./Inc. may have a long position of less than 1% or a short position or
deal as principal in the securities discussed herein, related securities or
in options, futures or other derivative instruments based thereon.
Recipients of this report are advised that any or all of the foregoing
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Important Disclosure Footnotes for Osisko Mining Inc. (OSK)
· CIBC World Markets Inc. expects to receive or intends to seek
compensation for investment banking services from Osisko Mining Inc. in the
next 3 months.
This company is a client for which a CIBC World Markets company has
performed investment banking services in the past 12 months.
CIBC World Markets Inc. has managed or co-managed a public offering of
securities for this company in the past 12 months.
CIBC World Markets Inc. has received compensation for investment
banking services from this company in the past 12 months.
