Osisko Mining Corp. (OSK), the Montreal-based gold producer, has received interest from “lots” of parties as it seeks an alternative to Goldcorp Inc. (G)’s C$2.71 billion ($2.41 billion) hostile offer.
“There are many different formulas that are out there and a significant amount of larger financial players that see value here as well,” Chief Executive Officer Sean Roosen said today in a phone interview. The company has signed confidentiality agreements with “lots” of interested parties for what is “a very robust process,” he said, declining to provide further details.
Goldcorp, which has held talks off and on with Osisko since 2008, announced a cash-and stock offer on Jan. 13. Osisko rejected the bid as too low and got additional time to consider its options after filing suit to stop the takeover.
Now is not the right time for a sale, Roosen said. Osisko can continue to operate as standalone company and Vancouver-based Goldcorp is trying to buy access to its Canadian Malartic gold mine without properly valuing it, Roosen said. The project started producing in 2011 and increased operating rates and output over the past two years, with a record 525,000 to 575,000 ounces forecast in 2014.
“Picking a day in time and putting a value on an asset that’s just in its infancy and a company that’s only seven or eight years old doesn’t work for me,” Roosen said.
Osisko published an updated mine plan today that outlines annual average production of 597,000 at so-called cash costs of $525 an ounce over a 14-year mine life.
The cost forecasts were better than expected, Anita Soni, a Toronto-based analyst at Credit Suisse Group AG, wrote in a note today. Osisko’s life-of-mine plan net present value is also higher than estimates, she said.
The companies announced a settlement on March 3 of Osisko’s lawsuit seeking to stop the bid. Under the agreement, Goldcorp will get access to its target’s information if Osisko announces another transaction or by April 1 at the latest. Goldcorp committed not to buy any Osisko shares under the offer until April 15.
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