OSISKO RELEASES FIRST QUARTER 2010 RESULTS
MONTREAL, QUEBEC, May 05, 2010 Osisko Mining
Corporation (the "Company") (TSX: OSK)(FRANKFURT: EWX) is pleased to report its first quarter financial
results for the period ended March 31, 2010.
Highlights
-- Announced 42.8% increase in reserves
to 8.97 million ounces of gold (245.8 million tonnes @ 1.13 g/t Au) with the definition drilling of the
Barnat deposit and the extension of the Canadian Malartic Project.
-- Continued progress on the
construction and development of the Canadian Malartic Project with outlays of $99 million.
--
Announcement of friendly takeover bid on Brett Resources Inc., owner of the Hammond Reef gold
project.
-- On-going exploration activities on seven projects with more than 79,000 metres drilled in
the quarter, including commencement of drilling at the Duparquet Project.
-- Extension received for the
drawdown of the second tranche of $75 million under CPPIB credit facility.
-- Net income of $1.3
million.
During the first quarter of 2010, the Company's profit amounted to $1.3 million
($0.00/share) compared to a loss of $0.8 million ($0.00/share) in the corresponding period of 2009. The
profit is mainly attributable to the future income tax recovery of $2.9 million derived from the
renunciation of exploration expenses to subscribers of the $14.4 million flow-through share issues in
2009, and a $2.9 million gain on foreign exchange, partially offset by higher stock based compensation
expenses.
Canadian Malartic Project
The Canadian Malartic Project is progressing well with the
advancement rate reaching approximately 50% completion. Key milestones during the quarter included:
-- Completion of the detailed engineering;
-- Finalization of equipment and bulk material
purchases;
-- Awarding of electrical, mechanical and piping installation contracts valued at more than
$60 million;
-- Completion of the administrative/truck shop building;
-- Significant advance on the
concrete foundation and steel erection work at the process plant;
-- Initiation of mine pre-stripping
work;
-- Near completion of the relocation program with the delivery of the community centre and
initiation of the closure of the southern Malartic neighbourhood;
-- Advancement of the electrical
infrastructures for the 120kV power line.
Total direct investment during the quarter amounted to $99
million. To date, the Company's investment has reached $503 million, with additional commitments for
$224 million. Total outlays and commitments of $727 million represent 78% of budget. The construction of
the Project is expected to be completed in the second quarter of 2011.
Reserve/Resource Growth
The Company announced in early February, following the inclusion of the Barnat South deposit and
additional drilling at Canadian Malartic, that proven and probable reserves stood at 245.8 million
tonnes at an average grade of 1.13 g/t for 8.97 million ounces of gold. The reserves are based on 0.34
g/t cut grade and using $825 per ounce gold price (see February 10, 2010 press release).
The Company
is continuing to aggressively pursue the growth on its reserve/resource base with active drilling
campaigns on seven gold projects. Some 78,800 metres of drilling were completed during the first
quarter.
Friendly Takeover Bid - Brett Resources Inc.
Osisko formally launched a friendly
takeover bid of Brett Resources Inc., owner of the Hammond Reef Gold Project, by offering 0.34 common
share of Osisko and $ 0.0001 in cash for each common share of Brett. The offer is open until May 19,
2010.
A Preliminary Assessment Study (the "Study") was completed by Brett 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%.
In addition to the current resource, Hammond
Reef offers exciting exploration potential as recent drilling confirmed continuity of mineralization
along strike two kilometers northeast of the existing resource. Brett has also identified several
parallel structures in the project area that host mineralization similar to the main body.
Mr. Sean
Roosen, President and CEO, commented on the first quarter's activities: "We are pleased with the
on-going progress at the Canadian Malartic Project and with the response that we have received following
the announcement of our offer to acquire Brett Resources Inc. We are well on our way to building the
next leading intermediate gold producer."
Highlights from the Company's financial position are as
follows (in millions of dollars):
----------------------------------------------------------
March
31, 2010 December 31, 2009
----------------------------------------------------------
Cash Position(1)
670.6 790.2
Working Capital 638.0 760.4
Total Assets 1,357.4 1,338.8
Shareholders' Equity 1,117.4
1,112.3
----------------------------------------------------------
(1) Includes Cash and Cash
equivalents, Short-term investments, Restricted cash and Cash collateral.
The financial statements
and Management Discussion and Analysis for the period ended March 31, 2010, will be filed on SEDAR by
May 15, 2010.
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. The Company is
well-funded with approximately $670 million on hand.
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 (i) to put the Canadian Malartic Project into commercial production, or
(ii) to complete the acquisition of Brett Resources Inc., 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
416-363-8653
416-363-8653
Osisko Mining Corporation
Sylvie Prud'homme Investor
Relations
514-735-7131
514-735-7131
Toll Free: 1-888-674-7563
1-888-674-7563
www.osisko.com
|