Heat Treat Industry News

March 25, 2010

Osisko to buy Brett Resources in US$365m deal

Publishing Date22 Mar 2010 11:52am GMTAuthorMining JournalOsisko Mining Corp has announced a friendly C$372 million (US$365 million) takeover bid for Brett Resources Inc.

The all paper deal would see Osisko add a second gold asset to its pipeline, the Hammond Reef project in Ontario, owned by Brett.

Osisko, which owns the Canadian Malartic project in Quebec, has offered Brett shareholders 0.34 of a share for each common share in Brett held. At the time of the announcement the offer represented a 52.5% premium to the 20-day average price of the two companies’s shares.

The Hammond Reef deposit has an inferred mineral resource of 259.4Mt at 0.8g/t Au, containing 6.7Moz. Over 97% of this resource is within 300 m of surface.

Sean Roosen, Osisko’s chief executive officer said the addition of Hammond Reef could push the combined company’s gold production to over 1Moz by 2015.

“Internal cash flow from operations anticipated to begin at Canadian Malartic in Q2 next year will allow the eventual project capex to be funded internally, further removing market risk to bringing Hammond Reef into production,” said Mr Roosen.

A preliminary assessment study on Hammond Reef completed in November last year, shows production potential of 369,000oz/year over a 14-year mine life at average cash costs of US$442/oz.

The US$789 million, Canadian Malartic mine is expected to produce 688,000oz in 2012, its first full year of production. Cash costs are anticipated to average US$319/oz.

Source: Mining Journal

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