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Osisko Reports Fourth Quarter and Year-End 2012 Results


Osisko Reports Fourth Quarter and Year-End 2012 Results

MONTREAL, QUEBEC -- (Marketwire) -- 02/21/13 -- Osisko Mining Corporation (the "Company" or "Osisko") (TSX:OSK)(FRANKFURT:EWX) is pleased to report that it has generated net earnings of $9.6 million ($0.02 per share) during the fourth quarter of 2012 versus net earnings of $37.8 million in the fourth quarter of 2011 ($0.10 per share).

For the year of 2012, its first full year of operations, the Company generated net earnings of $78.4 million ($0.20 per share) compared to net earnings of $18.0 million ($0.05 per share) in the previous year. The Canadian Malartic Mine, the Company's flagship asset, reached commercial production on May 19, 2011.

Earnings from mine operations for the fourth quarter amounted to $68.1 million compared to $39.5 million in the corresponding period of 2011. For the year, Canadian Malartic generated earnings from mine operations of $239.7 million compared to $79.5 million in 2011.

Sean Roosen, President and Chief Executive Officer, commenting on the results: "Despite the various challenges that we faced, we generated cash from mine operations(1) of $305.6 million, which clearly demonstrates the strength of Canadian Malartic. The past year had its challenges as we continued ramping up Canadian Malartic to its nameplate capacity. In the fourth quarter we were affected by delays in executing a major blast over old underground mine workings which reduced our operating flexibility and impacted our mining plan. We anticipate Canadian Malartic will generate improved and strong cash flow once the ramp up phase is completed later this year."

Highlights


 
--  Gold production of 101,544 ounces at an average cash cost1 of $903 per
    ounce for the quarter, 388,478 ounces at an average cash cost of $909
    per ounce for the year; 
    
--  Operating cash flow(2) of $77.7 million, 66.7% higher than in 2011 for
    the quarter and $273.7 million for the year; 
    
--  Free cash flow(3) of $15.0 million for the quarter; 
    
--  Write down of portfolio investments for $16.3 million for the quarter
    and $19.4 million for the year; 
    
--  Completion of the Queenston Mining Inc. acquisition; 
    
--  Receipt of modifications to the Canadian Malartic operating parameters. 
    
 
1) Reconciliation of non-IFRS measures is provided under Note Regarding     
Certain Non-IFRS Measures of Performance of this press release.             
                                                                            
2) Before change in non-cash working capital items.                         
                                                                            
3) Free cash flow is equivalent to the increase in cash and cash equivalents
on the consolidated statement of cash flows for the three months ended      
December 31, 2012.                                                          

Fourth quarter production was affected by changes to the mining plan caused by a delay of approximately 60 days in executing a 940,000-tonne blast over previously mined underground stopes, blasting constraints and access to the north pit wall. The delay restricted access to a number of areas and the mine was forced to lay-off contractors and reduced the utilization of the mining fleet. Lower grade material was processed from the available stockpile. Production was also affected by several mill shutdowns to modify crushing and conveying systems and the installation of the second pebble crusher.

The mine operating statement for the production period is as follows:


 
 --------------------------------------------------------------------------
                               Q4 2012  Q3 2012  Q2 2012  Q1 2012  Q4 2011 
                              ---------------------------------------------
 Gold sales (ounces)           111,104   95,424   95,675   92,400   75,100 
 Silver sales (ounces)          74,100   49,751   48,880   52,800   42,100 
 --------------------------------------------------------------------------
                                 ($000)   ($000)   ($000)   ($000)   ($000)
                              ---------------------------------------------
 Revenues                      191,080  158,503  157,134  158,658  128,100 
 --------------------------------------------------------------------------
                                                                           
 Production Costs             (101,239) (81,841) (98,837) (71,910) (74,841)
 Royalties                      (2,546)  (1,998)  (2,021)  (2,359)  (1,933)
 Depreciation                  (19,198) (14,605) (15,289) (13,877) (11,800)
                              ---------------------------------------------
 Total                        (122,983) (98,444)(116,147) (88,146) (88,574)
                                                                           
                              ---------------------------------------------
 Earnings from mine operations  68,097   60,059   40,987   70,512   39,526 
 --------------------------------------------------------------------------

Following the commencement of commercial production, steady improvements have been made despite some setbacks in the fourth quarter and the May 9th fire at the mill which affected production during a 10-day period. Improved productivity at the mine was noted throughout 2012 as the pit floor was further developed, mobile equipment efficiencies improved, and throughput at the mill increased. As the ramp up continues towards the 55,000 tonnes per day nameplate mill capacity, cash cost per ounce is expected to decrease.

Key operating results

(in thousands of Canadian dollars, unless otherwise noted)


 
--------------------------------------------------------------------------
                                   Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011
                                  ----------------------------------------
Gold Production (oz)               101,544 103,753  92,003  91,178  79,718
Gold Sales (oz)                    111,104  95,424  95,675  92,400  75,100
Average Sale Price (US$/oz)          1,709   1,659   1,605   1,698   1,655
Average Market Price (US$/oz)        1,722   1,652   1,609   1,691   1,688
Cash Costs per Ounce(4) (C$/oz)        903     864   1,015     860     936
Cash Costs per Ounce(4, 5)                                                
 (US$/oz)                              911     867   1,004     858     914
Cash Margin per Ounce(4) (US$/oz)      798     792     601     840     741
Revenues                           191,080 158,503 157,134 158,658 128,100
Earnings from Mine Operations       68,097  60,059  40,987  70,512  39,526
Net Earnings                         9,638  26,156  13,271  29,359  37,802
Net Earnings per Share                0.02    0.07    0.03    0.08    0.10
Operating Cash Flows(6)             77,725  68,010  50,521  77,437  46,633
--------------------------------------------------------------------------
                                                                          
4) Reconciliation of non-IFRS measures is provided under Note Regarding     
Certain Non-IFRS Measures of Performance of this press release.             
                                                                            
5) Using the average exchange rate for the period.                          
                                                                            
6) Before change in non-cash working capital items.                         

The production statistics are as follows:


 
--------------------------------------------------------------------------
                                   Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011
                                  ----------------------------------------
Tonnes Mined (000's)                                                      
- Ore                                3,553   4,853   3,234   4,037   3,549
- Waste                              7,847   9,215   9,545   8,458  10,590
- Overburden                           627   1,409   1,740   1,954   1,823
                                  ----------------------------------------
Total                               12,027  15,477  14,519  14,449  15,962
Tonnes Milled (000's)                4,088   3,757   3,236   2,965   2,935
Grade (g Au/t)                        0.87    0.97    0.99    1.05    0.96
Recovery (%)                          88.8    88.7    89.2    91.2    88.3
Gold production (oz)               101,544 103,753  92,003  91,178  79,718
--------------------------------------------------------------------------

Mill operating statistics continue to show progress in all categories.


 
---------------------------------------------------------------------------
              Total                                              Tonnes per
          Available   Operating             Tonnage  Tonnes per   Operating
              Hours       Hours    (%) Produced (t)        Hour         Day
---------------------------------------------------------------------------
Q2 2011       2,184       1,793     82    2,481,196       1,384      29,894
Q3 2011       2,208       1,890     86    3,086,324       1,633      36,742
Q4 2011       2,208       1,995     90    2,934,803       1,471      33,733
Q1 2012       2,184       1,890     87    2,965,456       1,569      35,728
Q2 2012       2,184       1,960     90    3,236,281       1,651      38,074
Q3 2012       2,208       2,071     94    3,756,768       1,814      43,181
Q4 2012       2,208       2,052     93    4,088,021       1,992      47,535
---------------------------------------------------------------------------

Ore Reserves - Canadian Malartic

The table below shows the reserve and resource statement for the Canadian Malartic mine as at January 1, 2013:

Reserve and resource estimates with a lower cut-off grade of 0.31 to 0.34 g/t Au


 
                                            Tonnes       Grade          Au
Category                                       (M)    (g/t Au)      (M oz)
                                                                          
--------------------------------------------------------------------------
                                                                          
Proven Reserves                               48.8        0.89         1.4
Probable Reserves                            261.8        1.04         8.7
                                      ------------------------------------
Proven & Probable Reserves                   310.6        1.01        10.1
Measured and Indicated Resources             347.3        1.05        11.7
Inferred Resources                            49.6        0.75         1.2

Compared to the reserves reported in January 2012, there is a reduction of tonnes in part due to the 2012 production, but there is an increase in grade from 0.99 g/t to 1.01 g/t Au.

Earnings

The fourth quarter had several non-cash items which adversely affected the earnings including:


 
--  i. Provision for impairment of marketable securities held in exploration
    companies of $10.9 million. The impairment was related to Ryan Gold
    Corp. in which the Company holds a 9.5% interest. Ryan Gold took an
    impairment charge on their main exploration property during 2012; 
    
--  ii. A reduction in value of $0.66 per share of Queenston Mining Inc.
    acquired from Agnico-Eagle Mines Limited on November 28, 2012. Under
    IFRS, the value has to be reduced to the value attributed at the closing
    of the transaction; 
    
--  iii. An increase in tax provision following the position taken by the
    tax authorities in the valuation of certain credits. In 2011, the tax
    recovery was related to a tax benefit recognized following the
    successful commencement of operations at Canadian Malartic. 

The tax rate is unusually high during the quarter due to the non-deductible losses/adjustments described above.

Adjusted net earnings(7) including the above mentioned non-cash items would be:


 
--------------------------------------------------------------------------
                                         Q4 2012 Q4 2011     2012    2011 
                                        ----------------------------------
Net Earnings                               9,638  37,802   78,424  17,997 
Share-based Compensation                   2,017   2,999    9,629  10,779 
Write Down of Queenston Shares             5,145       -    5,145       - 
Other Non-Cash Gains/Losses               11,191  (1,788)  14,875  18,721 
Deferred Income and Mining Tax Expense                                    
 (Recovery)                               20,713  (9,976)  72,300  (7,000)
                                        ----------------------------------
Adjusted Net Earnings                     48,704  29,037  180,373  40,497 
--------------------------------------------------------------------------

The year-to-date results improved following the full year of operations at Canadian Malartic, which caused depreciation to be higher than the previous year. Finance costs were higher compared to 2011, as in 2011 such costs were capitalized up to commercial production reached on May 19, 2011.


 
7) Reconciliation of non-IFRS measures is provided under Note Regarding     
Certain Non-IFRS Measures of Performance of this press release.             

Investments

The Company invested $228.8 million in property, plant and equipment during 2012. These investments were mainly focused on the development of the pit and modification to the mill at Canadian Malartic and on the completion of definition drilling work at the Hammond Reef Project.

Queenston Acquisition

On December 28, 2012, Osisko completed the acquisition of Queenston Mining Inc. As part of the transaction, the Company acquired the Upper Beaver Project and a package of lands covering 230 km2 in the rich Kirkland Lake Gold Camp, which has produced over 40 million ounces in past years.

In addition to the $42.3 million spent to acquire the 9.2% interest in Queenston held by Agnico-Eagle Mines, Osisko issued 46,638,799 common shares in exchange for Queenston shares. The acquisition was booked at a fair value of $417.5 million.

A NI 43-101 technical report was issued by SRK Consulting on November 5, 2012 for the Upper Beaver deposit indicating a measured and indicated resources of 1.5 million ounces and 0.7 million ounces of inferred resources.


 
                  Tonnes          Au          Cu  Contained Au  Contained Cu
    Category     (000's)       (g/t)         (%)(000's ounces)(000's pounds)
----------------------------------------------------------------------------
Indicated          6,870        6.62        0.37         1,461        56,006
Inferred           4,570        4.85        0.32           712        32,218

Queenston had initiated work to gain access to the deposit via an exploration shaft to provide a better base to conduct exploration drilling. Osisko intends to continue the program complemented by deep holes from surface. Osisko will also pursue an intensive exploration program on previously identified deposits, which could provide mill feed to a regional mill and on new targets. Using an approach that was successful at Canadian Malartic, the Company intends to undertake a major compilation and analysis of the regional exploration and geological data.

Hammond Reef

The Company completed definition drilling work on the advanced stage Hammond Reef project. Osisko has completed over 629,000 metres at Hammond Reef, is finishing an EIA that will be filed in accordance with the accepted terms of reference and will table a feasibility study in the first half of 2013. The project is located approximately 20 kilometres from grid power, and is located 23 kilometres north of the town of Atikokan. Osisko signed a Resource Sharing Agreement with eight first nations groups in December 2010, as well as a Memorandum of Understanding with the Metis Nation of Ontario in April 2012. Osisko issued a resource estimate prepared by SGS on January 28, 2013, which is summarized as follows:

Hammond Reef Global Resource Estimates


 
-------------------------------------------------------------------------
                                                      Cut-off            
Category                  Grade (g/t)  Tonnes (M)       (g/t)      Oz (M)
-------------------------------------------------------------------------
Measured                         0.90       123.5         0.5        3.59
-------------------------------------------------------------------------
Indicated                        0.78        72.9         0.5        1.83
-------------------------------------------------------------------------
M+I                              0.86       196.4         0.5        5.43
-------------------------------------------------------------------------
Inferred                         0.72        75.7         0.5        1.75
-------------------------------------------------------------------------
-------------------------------------------------------------------------

G Mining Services Inc of Montreal, in collaboration with SGS, also estimated resources within a Whittle-optimized pit shell using a base case gold price of US$1,400 per ounce and pit limits that are unconstrained by lakeshores. The optimization yielded two distinct pits separated by approximately 200 metres with an average strip ratio of 1.01. The total in-pit M&I resource for the Hammond Reef gold deposit is 5.31 million ounces of gold at an average undiluted grade of 0.72 g/t Au, based on a derived lower cut-off grade of 0.31 g/t Au (west pit) and 0.33 g/t Au (east pit).

Hammond Reef Undiluted Resource Estimates within US$1,400 Whittle pit shell


 
---------------------------------------------------------------------------
                                                        Cut-off            
Category                    Grade (g/t)  Tonnes (M)       (g/t)      Oz (M)
---------------------------------------------------------------------------
Measured                           0.75       175.3        0.32        4.25
---------------------------------------------------------------------------
Indicated                          0.61        54.1        0.32        1.06
---------------------------------------------------------------------------
M+I                                0.72       229.5        0.32        5.31
---------------------------------------------------------------------------
Inferred                           0.65        13.3        0.32        0.28
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Exploration

The Company continues to pursue value creation through the discovery of new ore deposits. Osisko has several agreements and has staked properties in various gold camps within the Americas.

The Company has been active in the Guerrero District of Mexico where it has accumulated a large land package in an area with operating gold mines and advanced exploration projects.

Building on its flagship Canadian Malartic Mine, the Company hopes to discover and build new gold mines to ensure continued growth. These new projects will be developed only if they meet rate-of-return criteria and the Company has the financial capabilities to conduct such expansion.

Improved Financial Flexibility

During the second quarter, the Company amended its $150 million credit facility with CPPIB Credit Investments Inc. ("CPPIB"), a wholly-owned subsidiary of the CPP Investment Board, with CPPIB making available to the Company an additional $100 million delayed draw term loan. The key terms of the amendment are as follows:


 
--  The initial cash repayment schedule has been extended by one year to the
    third quarter of 2013. The reimbursements are based on 50% of free cash
    flow up to $60 million per annum. 
    
--  CPPIB will make available a delayed draw term loan of $100 million for
    working capital and general corporate purposes. Osisko may draw funds
    under this facility in $20 million increments, and any funds outstanding
    are reimbursable by December 31, 2013. No funds were drawn to date on
    this facility. There are no standby fees related to this tranche. 

As part of the agreement, Osisko has agreed to reduce the strike price of share purchase warrants to $10 per warrant for Tranche A (previously $10.75) and Tranche B (previously $19.25). Of the total 12.5 million of warrants, 5.5 million Tranche B warrants can be accelerated at Osisko's discretion if the share price trades at a 50% premium to the exercise price for a period of 15 days. Tranche A warrants expire on September 24, 2014 and Tranche B warrants are set to expire on December 31, 2015.

During the fourth quarter, the Company received from an equipment supplier a non-interest bearing advance of $14.7 million to fund the acquisition of major components as part of the rebuild program. The advance will be repaid over the next two years.

Outlook for 2013

Following the modifications and commissioning of the pre-crushing circuit and the second pebble crushing unit, it is anticipated that mill throughput should be stabilized in 2013. Gold production is estimated between 485,000 - 510,000 ounces for the year. As a result of gaining access to higher grade material in the second half of the year, it is anticipated that gold output will be higher in the second semester. Cash costs are estimated between $780 - $825 per ounce. This anticipates a 9 - 14% cost reduction from 2012.

Capital expenditures for 2013 are estimated at $220 million as follows:


 
---------------------------------------------------------
                                          ($Million)     
                                     --------------------
Canadian Malartic                             98         
Hammond Reef                                  10         
Upper Beaver                                  70         
Exploration                                   42         
                                     --------------------
                                                         
                                              220        
---------------------------------------------------------

The Company expects to release the Hammond Reef Feasibility Study in the first semester of the year.

Following the acquisition of Queenston Mining on December 28, 2012, the Company has assumed the leadership of the Upper Beaver advanced exploration program. It is also focused on integrating the Queenston Exploration group into Osisko. For 2013, focus will be on the initial development of the 1,300 meter exploration shaft, including engineering, design and fabrication of the head frame and hoisting facilities, initial collar excavation and preparation for shaft sinking.

The Company intends to invest $50 million in exploration on its projects in the Americas, including $42 million that will be capitalized.

Nominations

Mr. Charles E. Page was appointed to the Board of Directors on February 21, 2013. Mr. Page was previously a Director and Chief Executive Officer of Queenston Mining Inc. He has over 30 years of exploration experience and in-depth knowledge of the Kirkland Lake Gold Camp.

Mr. Denis Cimon was promoted to Vice President of Technical Services effective January 1, 2013. He will be responsible for the oversight of the technical studies undertaken by Osisko, and he will be focused on optimizing the Canadian Malartic processing plant. He will also coordinate all research projects within the organization.

Mr. Eric Tremblay was promoted to General Manager of Canadian Malartic Mine replacing Mr. Cimon. He will be responsible for all operating activities at Canadian Malartic, ensuring the operations are carried out in a safe manner, in compliance with our operating permits and respecting our commitments to our host community.

Q4 Conference Call Information

Osisko will host a conference call on Friday, February 22, 2013 at 8:00am EST, where senior management will discuss the financial results and provide an update of the Company's activities. Those interested in participating in the conference call should dial in at (416) 981-9000 (Toronto local and international), or 1-800-732-8470 (North American toll free). An operator will direct participants to the call.

The conference call replay will be available from 10:00 a.m. EST on February 22 until 11:59 p.m. EST on March 8 with the following dial in number: (416) 626-4100 or Toll-free 1-800-558-5253, access code 21647923.

Note Regarding Certain Non-IFRS Measures of Performance

This press release contains certain non-IFRS measures, including "cash cost per ounce", "cash margin per ounce", "cash generated from mine operations" and "adjusted net earnings". The Company believes that these measures, together with measures determined in accordance with IFRS, provides investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Cash cost per ounce

"Cash cost per ounce" is defined as the cost of production of one ounce of gold excluding non-cash costs for a certain period. "Cash cost per ounce" is obtained from "Production costs" and "Royalties" less non-cash "Share-based compensation" and "By-product credits (silver sales)", adjusted for "Production inventory variation" for the period, divided by the "Number of ounces of gold produced" for the period.


 
                                   Three months ended            Year ended 
                                         December 31,          December 31, 
                                      2012       2011       2012       2011 
                                                                            
                                --------------------------------------------
                                                                            
Gold ounces produced               101,544     79,718    388,478    180,633 
                                                                            
(in thousands of dollars,except                                             
 per ounce)                                                                 
                                                                            
Production costs                   101,239     74,841    353,827    158,886 
Royalties                            2,546      1,933      8,924      3,284 
Share-based compensation              (579)      (881)    (2,809)    (1,968)
By-product credit (silver sales)    (2,386)    (1,319)    (7,020)    (3,020)
Inventory variation                 (9,126)        14        109     14,829 
                                --------------------------------------------
                                                                            
Total cash cost for the period      91,694     74,588    353,031    172,011 
                                                                            
Cash cost per ounce                    903        936        909        952 

Cash margin per ounce (US$ per ounce)

"Cash margin per ounce" is defined as the "Average selling price of gold per ounce sold" in US$ less "Cash cost per ounce" in US$ for the period.


 
                                      Three months ended          Year ended
                                            December 31,        December 31,
                                          2012      2011      2012      2011
                                                                            
                                    ----------------------------------------
                                                                            
                                                                            
Average selling price of gold (per                                          
 ounce sold)                             1,709     1,655     1,669     1,667
                                                                            
Cash cost (per ounce sold)                 911       914       909       955
                                    ----------------------------------------
                                                                            
Cash margin per ounce                      798       741       760       712

Adjusted net earnings (loss) and adjusted net earnings (loss) per share

"Adjusted net earnings (loss)" is defined as "Net earnings (loss)" less certain non-cash items: "Write-off of property, plant and equipment", "Share-based compensation", "Unrealized gain (loss) on investments", "Impairment on available-for-sale assets", "Gain on premium of flow-through shares" and "Deferred income and mining tax expense (recovery)".

"Adjusted net earnings (loss) per share" is obtained from the "Adjusted net earnings (loss)" divided by the "Weighted average number of common shares outstanding" for the period.


 
                                    Three months ended           Year ended 
                                          December 31,         December 31, 
                                        2012      2011       2012      2011 
                                                                            
                                  ------------------------------------------
(in thousands of dollars,                                                   
except per share)                                                           
                                                                            
Net Earnings for the period            9,638    37,802     78,424    17,997 
                                                                            
Adjustments:                                                                
Write-off of property, plant and                                            
 equipment                                 -       175        617    16,451 
Share-based compensation               2,017     2,999      9,629    10,779 
Unrealized loss on investments         5,424     1,604      6,969    10,119 
Impairment on available-for-sale                                            
 assets                               10,912         -     12,434         - 
Gain on premium of flow-through                                             
 shares                                    -    (3,567)         -    (7,849)
Deferred income and mining tax                                              
 expense (recovery)                   20,713    (9,976)    72,300    (7,000)
                                  ------------------------------------------
                                                                            
Adjusted net earnings                 48,704    29,037    180,373    40,497 
                                                                            
Weighted average number of common                                           
 shares outstanding (000)            391,538   385,427    388,577   383,372 
                                  ------------------------------------------
                                                                            
Adjusted net earnings per share         0.12      0.08       0.46      0.11 

Cash generated from mine operations

"Cash generated from mine operations" is defined as "Revenues" for a certain period less "Production costs" (excluding non-cash "Share-based compensation") and "Royalties". "Cash generated from mine operations" less "Depreciation" and "Share-based compensation" results in "Earnings from mine operations".


 
(in $000's)                                   Year ended December 31, 2012
                                                                          
                                             -----------------------------
                                                                          
Revenues                                                           665,375
Mine operating costs                                                      
Production costs(1)                                              (350,844)
Royalties                                                          (8,924)
                                             -----------------------------
Cash generated from mine operations                                305,607
Depreciation                                                      (62,969)
Share-based compensation                                           (2,983)
                                             -----------------------------
Earnings from mine operations                                      239,655
                                                                          
(1) Production costs net of non-cash share-based compensation presented     
separately.                                                                 

About Osisko Mining Corporation

Osisko Mining Corporation operates the Canadian Malartic Gold Mine in Malartic, Quebec and is carrying out aggressive exploration and project development elsewhere in Canada and Latin America.

Mr. Luc Lessard, Eng., Senior Vice-President and Chief Operating Officer of Osisko, is the Qualified Person who has reviewed this news release and is responsible for the technical information reported herein, including verification of the data disclosed.

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.

For further information in relation to the Hammond Reef project, please refer to the "Technical Report on the Hammond Reef Gold Property Atikokan area, Ontario" dated December 20, 2011. For further information in relation to the Canadian Malartic project, please refer to the "Feasibility Study - Canadian Malartic Project (Malartic, Quebec)", dated December 2008. Both of these reports are available under the Osisko profile at www.sedar.com.

For further information in relation to the Upper Beaver project, please refer to the "Technical Report on the Upper-Beaver Gold-Copper Project, Ontario, Canada" dated November 9, 2012, which is available under the Queenston profile at www.sedar.com.

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 Osisko 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", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, timely completion of the ramp-up phase towards throughput design capacity of 55,000 tonnes per day, improvement of mine productivity, access to higher grade material, reduction of cost, positive outcome of any exploration work conducted around the Canadian Malartic infrastructure, at the Hammond Reef and Upper Beaver projects or at other Osisko's properties, and further development of its Hammond Reef project including timely completion of the project feasibility study.

Although Osisko 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 achieve such events qualified by the foregoing cautionary note regarding forward looking statements, 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 consultants, mining development and construction personnel, results of exploration and development activities, Osisko's limited experience with production and mining operations, uninsured risks, regulatory framework and changes, defects in title, availability of personnel, 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 Osisko's most recent Annual Information Form and in the most recent Management Discussion and Analysis filed on SEDAR, which also provide additional general assumptions in connection with these statements. Osisko cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Osisko 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 and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.


 
Osisko Mining Corporation                                                   
Consolidated Statements of Income                                           
For the three months and the years ended December 31, 2012 and 2011         
----------------------------------------------------------------------------
(tabular amounts expressed in thousands of Canadian dollars, except per     
share amounts)                                                              
                                                                            
                                 Three months ended             Years ended 
                                           December                December 
                                                31,                     31, 
                            ------------------------------------------------
                                   2012        2011        2012        2011 
                            ------------------------------------------------
                                    ($)         ($)         ($)         ($) 
                                                                            
Revenues                        191,080     128,100     665,375     263,408 
                                                                            
Mine operating costs                                                        
  Production costs             (101,239)    (74,841)   (353,827)   (158,886)
  Royalties                      (2,546)     (1,933)     (8,924)     (3,284)
  Depreciation                  (19,198)    (11,800)    (62,969)    (21,786)
                            ------------------------------------------------
                                                                            
Earnings from mine                                                          
 operations                      68,097      39,526     239,655      79,452 
                                                                            
  General and administrative                                                
   expenses                      (8,411)     (6,144)    (29,361)    (30,707)
  Exploration and corporate                                                 
   development expenses          (3,345)     (2,651)    (11,450)    (23,585)
  Other expenses                      -           -           -        (485)
                            ------------------------------------------------
                                                                            
Earnings from operations         56,341      30,731     198,844      24,675 
                                                                            
  Interest income                   402         354       1,547       2,318 
  Finance costs                  (8,006)     (6,910)    (30,831)    (17,676)
  Foreign exchange gain                                                     
   (loss)                        (1,237)      1,669       1,923      (1,148)
  Share of earnings (loss)                                                  
   of associates                    (85)         20        (713)       (460)
  Other gains (losses)          (17,064)      1,962     (20,046)      3,288 
                            ------------------------------------------------
                                                                            
Earnings before income and                                                  
 mining taxes                    30,351      27,826     150,724      10,997 
                                                                            
  Income and mining tax                                                     
   recovery (expense)           (20,713)      9,976     (72,300)      7,000 
                            ------------------------------------------------
Net earnings                      9,638      37,802      78,424      17,997 
                            ------------------------------------------------
                            ------------------------------------------------
                                                                            
Net earnings per share                                                      
                                                                            
  Basic                            0.02        0.10        0.20        0.05 
  Diluted                          0.02        0.10        0.20        0.05 
                                                                            
Weighted average number of                                                  
 common shares outstanding                                                  
 (in thousands)                                                             
                                                                            
  Basic                         391,538     385,427     388,577     383,372 
  Diluted                       392,719     389,994     390,874     389,933 
                                                                            
                                                                            
                                                                            
Osisko Mining Corporation                                                   
Consolidated Statements of Cash Flows                                       
For the three months and the years ended December 31, 2012 and 2011         
----------------------------------------------------------------------------
(tabular amounts expressed in thousands of Canadian dollars)                
                                                                            
                                 Three months ended             Years ended 
                                           December                December 
                                                31,                     31, 
                            ------------------------------------------------
                                   2012        2011        2012        2011 
                            ------------------------------------------------
                                    ($)         ($)         ($)         ($) 
Operating activities                                                        
                                                                            
Net earnings                      9,638      37,802      78,424      17,997 
Adjustments for:                                                            
    Interest income                (402)       (354)     (1,547)     (2,318)
    Share-based compensation      2,017       2,999       9,629      10,779 
    Depreciation                 19,355      11,973      63,603      22,277 
    Finance costs                 8,006       6,910      30,831      17,675 
    Write-off of property,                                                  
     plant and equipment              -         175         617      16,451 
    Gain on disposal of                                                     
     property, plant and                                                    
     equipment                      520           -         303           - 
    Unrealized foreign                                                      
     exchange loss (gain)         1,106      (1,738)     (2,363)      1,657 
    Share of loss (earnings)                                                
     of associates                   85         (20)        713         460 
    Net loss (gain) on sale                                                 
     of available-for-sale                                                  
     financial assets             5,034           -       4,432      (5,041)
    Net loss on financial                                                   
     assets at fair value                                                   
    through profit and loss         279       1,604       1,824      10,119 
    Impairment on available-                                                
     for-sale financial                                                     
     assets                      10,912           -      12,434           - 
    Deferred gain - premium                                                 
     on flow-through shares           -      (3,567)          -      (7,849)
    Provisions and other                                                    
     liabilities                    462         825       2,341       1,220 
    Income and mining tax                                                   
     expense (recovery)          20,713      (9,976)     72,300      (7,000)
    Other non-cash loss                                                     
     (gain)                           -           -         152        (639)
                            ------------------------------------------------
                                 77,725      46,633     273,693      75,788 
  Change in non-cash working                                                
   capital items                (20,710)     (6,973)    (26,911)      9,912 
                            ------------------------------------------------
Net cash flows from                                                         
 operating activities            57,015      39,660     246,782      85,700 
                            ------------------------------------------------
                                                                            
Investing activities                                                        
                                                                            
  Net decrease in short-term                                                
   investments                        -           -           -      17,068 
  Net decrease (increase) in                                                
   restricted cash               (4,301)    (20,629)        448     (18,985)
  Acquisition of investments    (42,329)     (1,500)    (53,279)    (13,783)
  Proceeds on disposal of                                                   
   investments                        -           -       1,838      12,038 
  Property, plant and                                                       
   equipment, net of                                                        
   government credits           (39,336)    (59,533)   (228,840)   (356,787)
  Proceeds on disposal of                                                   
   property, plant and                                                      
   equipment                        324           -         324           - 
  Cash received from the                                                    
   acquisition of assets         40,513           -      40,513           - 
  Interest received                 366         356       1,393       2,525 
                            ------------------------------------------------
Net cash flows from                                                         
 investing activities           (44,763)    (81,306)   (237,603)   (357,924)
                            ------------------------------------------------
                                                                            
Financing activities                                                        
                                                                            
  Long-term debt                 14,651           -      14,651           - 
  Long-term debt transaction                                                
   costs                           (146)         (5)       (262)       (640)
  Long-term debt repayments      (1,250)     (1,250)     (5,000)     (3,333)
  Finance lease payments         (6,088)     (4,596)    (22,790)     (8,419)
  Issuance of common shares,                                                
   net of expenses                1,199         701      19,095      39,477 
  Interest paid                  (5,649)     (5,293)    (22,314)    (12,684)
                            ------------------------------------------------
Net cash flows from                                                         
 financing activities             2,717     (10,443)    (16,620)     14,401 
                            ------------------------------------------------
Increase (decrease) in cash                                                 
 and cash equivalents            14,969     (52,089)     (7,441)   (257,823)
Cash and cash equivalents -                                                 
 beginning of period             78,260     152,759     100,670     358,493 
                            ------------------------------------------------
Cash and cash equivalents -                                                 
 end of period                   93,229     100,670      93,229     100,670 
                            ------------------------------------------------
                            ------------------------------------------------
    Interest paid, including                                                
     interest expensed and                                                  
     capitalized                  5,649       5,293      22,314      17,456 
                                                                            
                                                                            
                                                                            
Osisko Mining Corporation                                                   
Consolidated Balance Sheets                                                 
As at December 31, 2012 and 2011                                            
----------------------------------------------------------------------------
(tabular amounts expressed in thousands of Canadian dollars)                
 

 
                                                 December 31,   December 31,
                                                         2012           2011
----------------------------------------------------------------------------
                                                          ($)            ($)
----------------------------------------------------------------------------
ASSETS                                                                      
                                              ------------------------------
Current assets                                                              
                                              ------------------------------
  Cash and cash equivalents                            93,229        100,670
----------------------------------------------------------------------------
  Short-term investments                               19,357              -
----------------------------------------------------------------------------
  Restricted cash                                       4,563         14,485
----------------------------------------------------------------------------
  Accounts receivable                                  32,266         39,419
----------------------------------------------------------------------------
  Note receivable                                      30,000              -
----------------------------------------------------------------------------
  Inventories                                          73,795         47,552
----------------------------------------------------------------------------
  Prepaid expenses and other assets                    21,274          7,174
----------------------------------------------------------------------------
                                                      274,484        209,300
----------------------------------------------------------------------------
Non-current assets                                                          
                                              ------------------------------
  Restricted cash                                      38,362         26,878
----------------------------------------------------------------------------
  Investments in associates                             8,933          1,698
----------------------------------------------------------------------------
  Other investments                                    16,894         16,041
----------------------------------------------------------------------------
  Property, plant and equipment                     2,329,773      1,801,325
----------------------------------------------------------------------------
  Deferred income and mining taxes                          -         14,000
----------------------------------------------------------------------------
                                                    2,668,446      2,069,242
----------------------------------------------==============================
Liabilities                                                                 
                                              ------------------------------
Current Liabilities                                                         
                                              ------------------------------
  Accounts payable and accrued liabilities            100,931         74,562
----------------------------------------------------------------------------
  Current portion of long-term debt                    76,883         86,485
----------------------------------------------------------------------------
  Provisions and other liabilities                      1,405            824
----------------------------------------------------------------------------
                                                      179,219        161,871
----------------------------------------------------------------------------
Non-current liabilities                                                     
                                              ------------------------------
  Long-term debt                                      260,529        245,139
----------------------------------------------------------------------------
  Provisions and other liabilities                     18,618          6,038
----------------------------------------------------------------------------
  Deferred income and mining taxes                     60,426          2,126
----------------------------------------------------------------------------
                                                      518,792        415,174
----------------------------------------------------------------------------
Equity attributable to Osisko Mining                                        
 Corporation shareholders                                                   
                                              ------------------------------
  Share capital                                     2,048,843      1,656,034
----------------------------------------------------------------------------
  Warrants                                             19,311         13,166
----------------------------------------------------------------------------
  Contributed surplus                                  65,868         55,909
----------------------------------------------------------------------------
  Equity component of convertible debenture             8,005          8,005
----------------------------------------------------------------------------
  Accumulated other comprehensive income              (1,148)        (9,397)
----------------------------------------------------------------------------
  Retained earnings (deficit)                           8,775       (69,649)
----------------------------------------------------------------------------
                                                    2,149,654      1,654,068
----------------------------------------------------------------------------
                                                    2,668,446      2,069,242
----------------------------------------------==============================
                                                                            
----------------------------------------------------------------------------

Contacts: John Burzynski Vice-President Corporate Development (416) 363-8653 www.osisko.com

Sylvie Prud'homme Director of Investor Relations (514) 735-7131 Toll Free: 1-888-674-7563

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