Osisko Releases First Quarter 2011 Results
MONTREAL, QUEBEC -- (Marketwire) -- 05/13/11 -- Osisko Mining Corporation (the 'Company' or 'Osisko')(TSX: OSK)(FRANKFURT: EWX) is pleased to report its review of activities and financial results for the quarter ended March 31, 2011.
Highlights
-- First gold poured following initiation of plant commissioning in March
2011;
-- 19.3% increase in Canadian Malartic ore reserves;
-- Receipt of notice for a 90-day pre-environmental assessment planning for
Hammond Reef Project;
-- Completion of construction at Canadian Malartic;
-- Net loss of $5.3 million.
During the first quarter of 2011, the Company incurred a loss of $5.3 million ($0.01 per share) compared to a loss of $0.6 million ($0.00 per share) in the corresponding period of 2010. The higher loss incurred is mainly due to higher administrative costs reflecting the growth in the Company's activities, higher non-cash charges from the issuance of stock options in the third quarter of 2010 and lower foreign exchange gain.
The results were compiled in accordance with International Financial Reporting Standards.
Sean Roosen, President and CEO, commenting on the first quarter activities: 'We are pleased to report that we continue to achieve key milestones as we transition from a development stage company to an intermediate gold producer. We have successfully completed construction at Canadian Malartic, and are progressing through the plant commissioning phase. We achieved first gold pour on April 13, 2011, a huge accomplishment for our team, considering this was all achieved within just six years from the first exploration drill hole we put into Canadian Malartic in March 2005.'
The Canadian Malartic Project is expected to be one of Canada's largest gold mining operations. Mr. Roosen further noted: 'Our achievements to date result from the outstanding support and contribution that we have received from all of our stakeholders, including employees, contractors, suppliers, the Malartic community, government authorities, lenders and shareholders. We are grateful to all'.
Canadian Malartic Project
Investment in construction and development activities amounted to $80.9 million, bringing the total spent to date on the project to $968.8 million.
Plant commissioning is ongoing. During April, approximately 465,000 tonnes were processed (15,500 tonnes per day) yielding some 3,500 ounces of gold. The Company expects to reach commercial production (60% of plant capacity throughput over a 30-day period) in the second quarter.
The Company also announced a 19.3% increase in proven and probable reserves at Canadian Malartic to 10.71 million ounces. Since the issuance of the original feasibility study in November 2008, the gold reserves have increased by 70% (of which 13% is related to the increase in the gold price used and 57% relates to the increase in resources), whereas the mine life has been extended to 16 years. Significant value has been created by an intensive drilling campaign at Canadian Malartic.
The Company's technical team has initiated several studies to enhance shareholder value through expansion and optimization of the processing plant.
Osisko resumed mining activities at night in April and has implemented several mitigating measures to reduce the noise impact on the Malartic community, one of which is to initiate a new relocation program which will increase the buffer zone. Furthermore, the Quebec Government has issued a modified decree for Canadian Malartic, which increases the noise parameters under which the mine can operate.
Hammond Reef Project
An intensive drilling program continues at the Hammond Reef Gold Project acquired in May 2010, with 56,417 metres of drilling completed in the quarter. An updated resource statement is expected later in 2011.
The Company is continuing its stakeholder engagement program with emphasis on the communities surrounding the project.
On April 28, 2011, the Company was advised by the Canadian Environmental Assessment Agency that it was commencing its 90-day pre-environmental assessment planning to determine if a comprehensive study should be commenced. This represents a key milestone in the permitting phase of the project.
Highlights from the Company's financial position are as follows (in millions of dollars):
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March 31, 2011 December 31, 2010(1)
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Cash Position(2) 254.4 397.9
Working Capital 180.7 282.9
Total Assets 1,932.7 1,958.9
Total Debt 288.3 287.9
Shareholders' Equity 1,594.0 1,594.0
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(1) Revised under IFRS
(2) Includes Cash and Cash equivalents, Short-term investments, Restricted
cash and Cash collateral.
The consolidated financial statements and Management Discussion and Analysis for the period ended March 31, 2011 will be filed on SEDAR on May 16, 2011.
Osisko Mining Corporation is currently commissioning the Canadian Malartic gold mine, evaluating adjacent areas for a large-scale open pit, bulk-tonnage mining operation and pursuing exploration of the Hammond Reef Project. The Company is well-funded with approximately $250 million on hand.
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.
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 to put the Canadian Malartic Project into commercial production, 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
www.osisko.com
Osisko Mining Corporation
Sylvie Prud'homme
Investor Relations
(514) 735-7131
Toll Free: 1-888-674-7563